In the wake of the current coronavirus pandemic, both commercial and tribal casinos have temporarily closed and chances are, when they become operational one again, they will need to implement social distancing measures within their properties.
Fortunately, a number of gaming-oriented companies are offering their services to help casino operators navigate through this uncharted operational model. One such concern is nQube, which, in collaboration with partners at the University of Manitoba Data Science NEXUS, is offering operators insight into how they can both protect customers and maximize business opportunities while maintaining social distancing practices.
GETTING TO KNOW YOU
By way of background, nQube specializes in artificial intelligence (AI) solutions to challenging data-related problems in the casino industry. Its flagship product is Reel AI—a powerful AI-drive optimization platform designed to find the best possible mix of slot machines to place on the slot floor, by analyzing the preferences and behaviors of players, as determined directly from player tracking data. In short, Reel AI tells operators which machines to buy, which ones to retire and where to put them on the slot floor.
“A key difference between nQube and other companies is that we create a holistic, non-linear model of the entire slot floor, using a casino’s own data to predict how every change will impact the performance of every other machine on the floor,” said Jason Fiege Ph.D., CEO of nQube Data Science.
“When we optimize a slot floor, we aim to maximize the revenue of the entire floor. We search through millions of alternative slot floor configurations, allowing us to find opportunities to increase the revenue of the floor as a whole.”
In addition to Reel AI, the company also offers solutions for AI-optimized segmentation of casino players and slot machines, Monte Carlo simulation of casino players for testing out new slot floor configurations and renovations, and other custom AI projects for casinos.
nQube is an industrial partner of the Data Science NEXUS at the University of Manitoba, where it explores casino problems that are of interest to both academics and the casino industry. Its not-for-profit COVID-19 risk mitigation solution is a collaborative effort with the Data Science NEXUS. This effort between nQube and the University of Manitoba Data Science NEXUS allows for the needed research that is helping to train several highly-qualified graduate students in statistics and computer science, and these students will then in turn be able to help the casino industry during these challenging times.
The company is currently working with both commercial and tribal casinos in the U.S., from small properties (150 machines) to large (1,000 or more machines), and with casinos in Canada which are run commercially and by provincial governments. “They typically use our flagship Reel AI product, but after the COVID-19 crisis hit, we are providing them with AI-driven risk mitigation solutions for COVID-19,” said Fiege.
The key to this effort involves the company’s Reel AI product, a flexible system that is easily modified to handle any optimization objectives, and any constraints from an operator on the number of machines and their locations.
“When the COVID-19 crisis hit, we heard of some initial work in casinos to implement social distancing by turning off every other slot machine,” said Fiege. “We realized that a slight modification to Reel AI would allow us to help casinos to reduce their revenue losses, while also respecting the constraints required by social distancing. Unfortunately, the spread of the pandemic accelerated, and about a week later, it was clear that casinos around the world would inevitably close in order to keep customers safe. This was a good decision that we support without reservation.”
However, COVID-19 will eventually recede and casinos will start to reopen. During the early days of the recovery, social distancing strategies will still be of critical importance, and nQube is hoping to use its technology to help casinos with their economic recovery and keeping their customers safe.
nQube plans to continue to offer its Reel AI slot floor optimization system once the pandemic is over. In the meantime, it will focus on using AI to make recommendations strictly on which machines to remove or turn off during the COVID-19 crisis, while also minimizing the economic losses due to a reduced operation. “We anticipate that during the recovery, many casinos will need to turn off some of their slot machines and also limit the number of players allowed on premises,” said Fiege. “We calculate how limiting the number of slot machines and the maximum allowed casino occupancy will affect slot revenues, and we determine which machines should be left on to maximize revenues. If an operator is careful about these choices, much of their pre-COVID-19 revenue can be preserved even while operating in a reduced capacity.
“This isn’t as simple as removing the worst-performing slot machines from the floor, or just turning off every second machine, or groups of machines,” Fiege explained. He believes AI is able to analyze the complex relationships between players and machines, and appropriately choose removals to minimize the financial impact to the casino, while maintaining sought after spacing between players that adheres to social distancing guidelines.
A NEW FUTURE FOR CASINOS
Although Fiege is confident regarding the long-term health of the casino industry, he believes it will be a while before things get back to pre-COVID-19 levels. “Coronavirus will be a part of our lives for quite some time, and chances are businesses will begin to cautiously reopen before the virus is gone,” he said. “We know that in this industry there are loyal customers who will return to the casino as soon as it opens, but we are also aware that many of these players are in older age groups that are at higher risk to COVID-19. It is imperative to the health of the customers and the health of the industry to do what we can to protect customers once casinos start to reopen.”
Fiege believes slot floors can survive—and even prosper—in this restrictive business environment. Indeed, prior to the coronavirus crisis, Through Reel AI, Fiege and his team found that many casinos have slot capacity that greatly exceeds the average number of slot players on the premises, and this excess capacity is only utilized during peak times. Moreover, some of this excess capacity is often in slot segments regarded as ‘distractors’—popular machines with good occupancy but below-average performance. Somewhat counterintuitively, it is often the case that removing such distractors can result in increased slot revenue, by shifting players to more productive areas of the slot floor. Such removals require a sophisticated understanding of player segments and their preferred games, slot segments and a holistic model of the entire slot floor that can estimate how revenue will be redistributed among the remaining machines.
“There is a certain degree of hope in these observations—many casinos can continue to do very well even with a substantially reduced slot floor and limitations on the number of players present at any given time.” Fiege said. “We are hoping that by providing casino operators with our recommendations and projections, they’ll be able to approach reopening with optimism along with caution.”