James Maida, president and co-founder of Gaming Laboratories International, offers insight into the impact of new technology in the gaming industry.

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How has the view of server-based gaming changed in the last year?

Maida: I have the added benefit of having seen the WMS product, the Bally product, the Aristocrat product, the IGT product. I’ve seen the second, third iterations of these products…We’re ready to approve that technology today. The question is if the player doesn’t know it’s server-based gaming, if the player doesn’t get it, if the player’s not getting any value, then why are you selling it? Server-based gaming is a delivery method. It’s a backbone system so you can provide more value, so they have to put this backbone down, and then they’re going to figure out what do they want to put on it. And I think that’s what you’re hearing now. The backbone’s done; server-based is done, so now we’re sort of moving into the middle innings. Now, we’ve got to figure out what to put on it to make it work.

Are operators going to want to see something similar to a cool Internet application like YouTube before they’re convinced to put server-based gaming in?

Maida: I think what you can say is we’re going to see it [server-based gaming] right here in Las Vegas. [As new properties come online,] you’re going to see something just like what happened with ticket-in, ticket-out. When the new properties started up in 2000, they were going in ticket-in, ticket-out, so other properties started to add it. So, if a guy next door has it, you’re going to get it.

How big of a concern are the IT challenges of server-based gaming for regulators?

Maida: At GLI, we work with these regulators. We’re helping them with the IT challenges. We’re telling them what they’re going to need. The regulators really understand it’s a new ballgame, and they really want to get in there with both hands and do it. I think it’ll be slow migration with the IT and with the regulators, but I think all the regulators are fully up for it.

The entire industry is probably going to have to beef up IT departments.

Maida: You’re going to have to have back ups, and back ups upon back ups. What happens if your server fails? Does the whole floor go dark, and you tell everybody to leave and go down to another casino? Figure that if half the floor goes down, that’s $300 a day per machine until you get it back up. So, I think it’s about just having a better, bulletproof IT system.

What is your take on skill gaming going forward?

Maida:I played that pinball game [from Cyberview Technology]. I played those games in London. It’s a very new and novel concept. I think it’s something that’s certainly worth looking at. Is that the game that’s going to be the Holy Grail of new games? I don’t know. But at least it’s starting the process where we’re starting to look at something other than just lining up symbols.

Players going forward won’t want to play those older games?

Maida: I think some players will like them, and some players will want something new. Maybe you can do Atari games. Maybe you have a bank of games where you all play against each other, and the guy who wins gets X and the others get the minimum.

So there’s a way the regulators can require that skill games give back a certain amount?

Maida: Yeah, I think there’s a way. I think skill-based and time-based and Guaranteed Play-based kinds of games-new ways of paying for playing games-I think that’s coming.

What about the security of server-based gaming and regulator concerns about that?

Maida: Security is something that GLI is focused on – We have our partnership with McAfee/Foundstone. Security is something that will be critical, and we’re going to have to work with the regulators, and we’re going to have to offer them services, and we’re going to have to make sure that server-based gaming is highly fire walled and highly protected. But again, I think GLI has a place to work with each regulator to make sure we can do a system assessment to make sure they’re comfortable with what’s happening.

It’s going to be complicated, but the benefits are very high. You just have to make sure you do it right.

Any other issues with server-based gaming that regulators are concerned with?

Maida: Validation of games, the whole process of redoing your internal controls, redoing your internal minimum mix because, right now, you get it on an EPROM, and you put it in the board, and you see all the board. Now, you’re going to put it in the server, and more people are going to need to be backgrounded.

There will be fewer slot techs, but there will be network people or more technical people. So, I don’t think you’ll lose jobs, but there will be different types of jobs, higher skilled jobs.

You’re still going to have to have people working on the terminals, but the data you’re going to get in knowing your player…Right now the average casino doesn’t really know its players. They don’t know what they like. They don’t know how much they like to spend. They don’t know what games they like to play. You’re going to be able to do so much more with the data you get from each player.

Right now, we create games in the industry, but we don’t know if players like them or not. We just throw them on the casino floor and see if people like them. Now, you’re going to be able to actually test market [games via the network].