STRATEGIC PARTNERS
They may not offer the same kind of kick as slot machines, but ATMs are an increasingly popular fixture in casinos. by Kevin Gibson, contributing writer
June 21, 1999
No one seemed to be using the Quick Cash machine, perhaps because the ATMs on board the Caesars Glory of Rome riverboat casino were a little lighter on the surcharges. Perhaps it was because the ATMs dispensed money directly, while credit card advances were paid off at cashiers' windows or "cages." But money was changing hands, that's for sure. As I stood behind my companion, who found some luck on a "Blazing Sevens" slot machine, I overheard a man talking to a woman at the next machine. "I've got $9,000 in the bank, but I can't get to it," he said. Apparently he already had withdrawn his maximum for the day. Or maybe he was just lying. In any case, the woman handed the man her card and told him her PIN. "No more than $1,000," she said, sounding like a mother limiting her child to two cookies before bedtime. In the lobby, a cashier bearing a nametag that read "Linda" confirmed that, despite the lack of users that day, people do access money from their credit cards for gambling. Usually, it's only $100 or so, but the total can run as high as $5,000, in her experience. How often do people use the cash advance machines, she was asked. "Aaallllll the time," was the response. But, she added, "it's easier to use the ATM." Presumably, it's also a little cheaper. An ATM at this particular Caesars, located in Harrison County, Ind., carried a $1.95 surcharge, plus 1.5 percent of the transaction, PLUS whatever fee the user's bank charged for the transaction. On the other hand, to access money using Quick Cash, a user pays a percentage of the advance. For a daring soul who needs $5,000, the fee is $109.99. For $25 (the minimum allowed), the fee is $7.99. The higher the advance, the higher the fee -- but the percentage is lower. TomAYto, tomAHto. Either way, the ATM industry perhaps has found the goldmine of all ATM locations. Perhaps.
No more middleman Jeff Rubin is senior vice-president and general manager of gaming for innoVisions, a developer of cash-access solutions. He said the old ways of getting money at a gaming site -- classic ATM transactions, cash advances and, in some cases, check cashing -- are changing. One way is through ATM point-of-sale (POS) or debit transactions, which allow users to access more funds specifically for gambling. The transaction goes through the same networks, Rubin said, "it's just that we have spent time and money to do it a different way." His company lobbied EFT networks to allow such transactions, and innoVisions, which is jointly owned by Cash America and the wholesale bank of Wells Fargo & Co., developed the software that enables ATMs to handle the transactions. Perhaps the most interesting development on the horizon is a new way of cashing a check. In most casinos, including Caesars in Indiana, checks must be cashed by a casino employee in a booth or cage. innoVisions has introduced ATMs that automate the process by communicating with computers and call centers in Ft. Worth, Texas and Sacramento, Calif. When a customer walks up to one of the new innoVisions Atreva machines, which stand nine feet tall and have two video screens, he or she can, using a touch-screen, enter the images of both sides of the check. If it is approved, the ATM will dispense the cash, eliminating the casino as the traditional middleman. Face time But what about security? Is there a fingerprint kit attached to the ATM? Or perhaps a robot to check your ID with the state police? "You don't need an ID card," said Rubin. "You need your face. We use a technology called facial biometrics, which is basically a sophisticated camera that maps portions of your face. People are doing retinal scans, fingerprinting ... but the facial (method) is less obtrusive." The facial recognition system is based on identification technology developed by the U.S. Dept. of Defense. "We archive the image," Rubin said, "then you walk up to a machine and say, 'I'm Bob Smith, I want to cash this check.' If the computer says you're not Bob Smith, you don't get the money." The system can use the customer's Social Security number for an added level of security. According to Rubin, the check-cashing process becomes easier and less time consuming after the first transaction, which includes an enrollment procedure. "The first check might take you five or six minutes to get the cash," he explained. "By the time you're on your third or fourth check, our computer can determine if you are who you say you are. When you get into the fully-automated system, it takes maybe a minute and a half to clear." Transactions fees are between one and three percent. The company, not the casino or the customer, bears the risk of fraud. The machines also cash money orders and third party checks, including payroll checks, and can make credit card cash advances. Safe bet Greenlink Technologies has created a concept that will simplify accessing payoffs -- by not dispensing money at all. Lyle Elias, president of Hurst, Texas-based Greenlink, said the concept will provide extra security for gamblers playing electronic poker. Traditionally, video poker machines paid out not in money but in scrip. Customers would then take the scrip to a casino employee and get cash. With Greenlink's new software, which was unveiled in February at a trade convention in South Carolina, the poker machine actually interfaces with an ATM. Currently the software acts as a "cashier assist system" in which players take the receipts to cashiers, who then access the winnings at an ATM. Eventually players may take their receipts directly to an ATM, where the machine will recognize the amount of the payoff from the receipt and dispense the proper amount. Either way, it becomes a lot safer to walk through a casino after a large payoff. "It's a means of keeping better track of money," Elias said, "and, from a security standpoint, not having people walking around with a lot of money and running the risk of armed robbery and that sort of thing." The software, which was developed by Greenlink for Drews Distributing, a provider of video poker machines, is still being tested. Elias said that possible applications for the software are numerous, and that it could even lead to gaming machines and ATMs being wrapped up into one. "What we see is a big market developing, hopefully globally, as more countries have some form of legal gambling," Elias said. "The majority of that growth is in electronic games." Image problem All this new technology means exciting advances in the ATM industry and banking in general. Right? Not necessarily. A recent story in American Banker magazine reported that many banks are leery about going into the gambling business. Since gambling is illegal in most U.S. states, gambling Web sites use banks and computer servers in other countries -- a loophole, to be sure. As Donna Embry, senior vice president of Vital Processing Services in Tempe, Ariz., told American Banker: "Most banks wouldn't touch a gaming establishment. Add it to the Internet, and you have double jeopardy." There's also the tricky question of whether cash can be TOO accessible at casinos and other gambling sites. Rubin, of innoVisions, said cautionary signs or stickers are often posted near or on ATMs where wagering is available. His company's machines post on-screen warnings about problem gambling. "You want to be responsible, but you also don't want to be Big Brother," Rubin said. "The best we can hope for is to notify people this problem exists; if you think you have a problem, pick up the phone ... or if you know they have a problem, don't give them money." Eventually smart cards could allow users to designate themselves as habitual gamblers. Then ATMs would deny certain transactions, whether cash advances, debit or check requests. "Within reason, if it's a way to blow off steam and enjoy yourself, there's nothing wrong with it (gambling). If it's beyond that, it's not good for you; it's like beer or fast cars," Rubin said. "When someone blows his brains out because he blew the family fortune, the governor stands up and says we have to outlaw gambling. You understand why he does that, but how typical is this guy's experience?" Hush hush Legal blocks and social criticism may deter many U.S. banks from embracing the rising cash-access markets in casinos and at race tracks -- or it may at least keep them from discussing it publicly. Likewise, the competition may keep some suppliers from sharing their secrets in this up-and-coming niche of the ATM industry. Game Financial Corp., a 9-year-old company based in Minneapolis, created GameCash, a line of gambling-site cash-access products that include credit card cash advance systems and ATMs. GameCash is a respected player in the industry with a strong presence in Native American gaming markets and a history of strong marketing and promoting. A description of GameCash and its systems can be found at the company's Web site, but spokesman Louis Dachis declined to comment for this story because he didn't want to share the company's strategies and insights with competitors. Representatives of Global Cash Access -- which recently unveiled a new line of cash advance terminals and POS terminals -- North American Cash Systems and ATM of Nevada either didn't return messages or could not be reached before deadline. According to a company press release, the new Global Cash Access machines are designed to reduce gamblers' reliance on cage operators by offering a "debit on a check" feature similar to that of innoVisions. Bally's Atlantic City and Claridge Casino Hotel in Atlantic City were the first sites to unveil the new terminals. Surely, the niche is growing, but Rubin is still waiting to see how profitable these new endeavors will be in the competitive ATM industry. "Increasingly these ATM deals have to make money, when in the past they didn't have to," he said. "I think we'll get some margins, but I won't delude myself into thinking we'll get a huge return. I don't think this is Microsoft."
