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Coinless Slots Tested at Las Vegas' Fiesta: Technology is Not New, but the Software is Tricky

Marcus Prater of Alliance Gaming Corp. acknowledges that several informal surveys conducted by slot-oriented magazines indicate a vast majority of players don't want to see coins removed from slots.

"There's going to be some resistance, certainly," Prater said. "But the convenience factor for the player is dramatic."

The machines that are being tested at a locals casino in Las Vegas called Fiesta use International Game Technology's "EZ Play" coinless system. Anchor Gaming, a partner company of IGT, is also expected to launch its own version of coinless gaming soon, and Alliance is working on its own system as well.

Like similar systems in the past, customers receive payment through a printed ticket, which can be redeemed at the cashier's cage. These systems have been used with success in slots at bars and convenience stores, and at some local casinos, including Arizona Charlie's.

Unlike past systems, however, the ticket works just like cash at another coinless machine -- insert the ticket into the bill validator, and the machine rings up credits. The machine can also be adjusted to pay off small wins, such as 10 coins, in coin, while larger payouts are paid with tickets.

The Fiesta will be the first casino to give this technology a field test.

"Once you get it into an application, that's the real acid test of the system," said Ed Rogich, IGT's vice president of marketing. "I'm sure (customers) will want to get their hands on it. They've all indicated they want similar tests themselves."

The technology for such systems has existed for some time. Bill validators made by JCM America Inc. -- which makes the vast majority of bill validators now used on slot machines -- have been technically capable of reading printed tickets for several years.

The real issue is a matter of software, not hardware. When a validator accepts a coupon, it must not only be capable of reading the barcode, but also must determine whether the ticket is authentic. It also must make sure a ticket can't be used more than once.

To accomplish those tasks, the machine must contact the casino's slot accounting software system, ensure the ticket's validity, then send the appropriate number of credits to the machine. The trick lies in getting the slot machine to communicate with that software system.

Part of that process includes bringing together various patented technologies. There are at least three different patents associated with coinless technology, Rogich said. All cover different elements of a coinless system, and all are held by separate companies.

"There's an effort to figure out how to get these groups together and bundle these," Rogich said. "It's still being defined."

This fight has been taken to court several times already. Last September, IGT and Alliance Gaming settled patent claims against one another over their separate cashless gaming patents, and agreed to license the technologies to one another in a cooperative effort to bring coinless gaming to the market.

A second case, brought before a federal court just weeks ago by IGT rival WMS Gaming Inc., accuses IGT of blocking WMS' efforts to license the coinless technology from IGT joint venture partner Anchor Gaming.

In its lawsuit, WMS accused IGT of blocking its efforts to license cashless gaming software from Anchor Gaming by leveraging its joint partnership with Anchor. WMS also claims IGT demanding a fee of $1,200 per machine for access to IGT's latest slot accounting software, which is used by most casinos throughout Nevada. Without access to this software, WMS wouldn't be able to produce a coinless system that would work at most casinos.

WMS branded this effort "nothing less than a naked attempt to monopolize cashless gaming and to secure IGT's existing monopoly in the market for casino gaming machines."

IGT has called WMS' charges groundless, and is pursuing its own claim against WMS for infringement of a patent IGT says covers all use of touch-screen technology in slot machines. The lawsuits are still pending.

The fight is particularly bitter because slot manufacturers believe the technology represents the future of the slot machine industry. Andrew Hatherly of Las Vegas Investment Advisors agrees, though that future may still be some time away.

"The local slot player tends to be ... a good deal more sophisticated in terms of knowing the slot world," Hatherly said. "That sophistication carries over to their acceptance of coinless.

"The locals will be the first to adopt this technology. The visitors will have a longer learning curve."

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