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Best of Howard Stutz

Gaming Guru

Howard Stutz

Gambling: Give Yourself a Hand

28 November 2005

After investing millions of research dollars into developing a wireless hand-held device for bond and securities traders, executives from Cantor Fitzgerald LP, a New York-based financial services company, realized the technology could be applied to other businesses.

Nevada casino customers may soon be using the device to gamble outside of traditional gaming areas.

Through lobbying efforts this past summer, Cantor Fitzgerald pushed Nevada to become the first state to approve the use of wireless, hand-held gaming devices.

Conceivably, state lawmakers paved the way for blackjack, roulette, poker and slot machine customers to wager in public areas beyond the casino, such as restaurants, lounges, retail areas, convention and meeting rooms, and swimming pools.

The Nevada Gaming Control Board is writing the regulations that would make wireless hand-held gaming a reality. But the board is also debating how popular it will be to gamble while lounging poolside during 100-degree summer days.

Joe Asher, who oversees Cantor G&W, a Nevada-based affiliate of Cantor Fitzgerald that plans to provide the central server system and hand-held gaming devices to casinos, believes that a generation of people used to personal digital assistants and text messaging is ready for wireless gaming.

"We've really focused a lot of resources on this for quite some time," Asher said. "People have gotten very comfortable with mobile technology. Why should gaming be restricted to the casino floor? Mobile technology allows customers more options to play at a casino property."

Palms Casino owner George Maloof said he is fascinated by the idea of hand-held gaming, but wonders how interested customers will be in the devices. Wireless gaming, he said, should appeal to the Palms' target customer, a younger, hipper consumer that considers wireless phones and other gadgets as essential fashion accessories.

He said the Palms has a "soft agreement" with Diamond I Technologies, a Baton Rouge, La., wireless provider, to outfit the casino with the hand-held devices once regulators allow wireless gaming.

"I've been following this for a couple of years, and I think it's made for our type of customer," Maloof said. "Maybe the technology will bring about some sort of cost savings, but I just don't know right now. It's an interesting enough concept and if it brings video poker to the pool area, then I think it's pretty cool."

Asher said Cantor Fitzgerald introduced wireless gaming on hand-held devices to casinos in Great Britain in 2003. Bringing wireless gaming successfully to Nevada would open doors for other American gaming jurisdictions, he said.

Once the wireless gaming regulations are approved, most likely by January, Cantor G&W plans to submit a hand-held gaming device -- similar in size to a PDA -- for regulatory approval.

"Our role is to offer a complete end-to-end solution for the casinos," Asher said.

"We'll offer the devices, the game software and we'll make sure they operate securely. We believe the devices will be out there for customers next year."

Diamond I Technologies was formed to capitalize on the move into hand-held gaming, company President David Loflin said. Secure wireless networks will enable the new systems, he added.

"The hard part is waiting for the rules and regulations to come out," Loflin said. "A lot of the products right now are theoretical because we don't want to tip off our competitors, but I think something workable can come out rather quickly."

With wireless gaming, a customer could put money on account with a particular casino and receive a hand-held device to use at the property. The customer can collect his winnings -- or be held accountable for losses -- when he returns the device.

Because of Nevada gaming laws that require wagering to take place in the open, customers will not be allowed to use the hand-held devices in hotel rooms.

The hand-held gambling devices will be disabled outside the wireless network that governs them.

Individual casinos could establish their own secure perimeters for using the gadgets. Casinos could, for example, decide to prohibit use of the hand-held devices in high-end restaurants.

Gaming regulations will demand the devices be shut off in areas such as children's arcades.

Product manufacturers said they will secure their systems so that only the customer who signs out for a device can use it. In addition, the devices will not be able to log onto the Internet.

"(Cantor Fitzgerald) has the most experience in real time secure financial transactions," Asher said. "Fundamentally, bond trading is the same business as gaming. A $100 million bond transaction is just as easy handled as a $10 bet on a hand of blackjack or a $100 wager on the New England Patriots."

In addition, Asher said Cantor G&W is exploring enabling the gaming devices to perform other tasks within a particular hotel-casino, such as ordering drinks from poolside or for buying show tickets.

Despite Asher's optimism, Gaming Control Board member Mark Clayton said it would be at least 12 months before a wireless system could be deployed. Technical and security standards for the system will take time to test and install.

Particularly important, he said, is security to ensure underage gamblers cannot use the devices.

"This is a whole new communication protocol that is wireless and a whole new technology that is being deployed into the casino," Clayton said. "It's not as if (a manufacturer) is just dropping off a new slot machine. We're going to move as fast as prudently possible."

Clayton said gaming control staff will have to test a particular system at each casino.

Although Cantor Fitzgerald primarily drove the legislation and Diamond I is getting aboard early, other Nevada-based gaming equipment manufacturers are also jumping into the picture.

During the Global Gaming Expo in September, Progressive Gaming International Corp. displayed a video poker game that can be played on a tablet personal computer. Shuffle Master and International Game Technology are also developing wireless hand-held gaming devices.

"This has the potential to be a huge growth vehicle for the manufacturers," Jefferies & Co. gaming analyst Amiee Marcel said.

"Once the gaming regulations are in place, the big equipment companies are going to get out in front with their products."

Gambling: Give Yourself a Hand is republished from