Casino chips with chips offer security, tracking - Sunday 12th of June 2005

Big Brother is coming to a casino near you.

It is a miniature high-tech spy - a chip within a chip. This microprocessor is embedded in regular gambling chips to protect casinos from cheaters, counterfeiters and sticky-fingered employees.

In addition to its security features, it is a nifty little tracking device that allows the casino industry to keep tabs on the betting habits and preferences of gamblers.

Already used at casinos in Las Vegas and abroad, radio frequency identification computer chips could soon be introduced at the gaming tables in Atlantic City - if the chip supplier can find some buyers.

"We remain convinced that this is the right technology for all of the applications that we have in mind for the casinos," said Gerard P. Charlier, president and chief executive officer of Gaming Partners International Corp.

GPI already has a temporary New Jersey gaming license in its hunt for new business, company officials said. Assuming it lands contracts with Atlantic City's casinos, it will have to win regulatory approval for its chip technology from the state Division of Gaming Enforcement and Casino Control Commission.

GPI's expansion plans for the Atlantic City market would add to its portfolio of about 30 casinos in the United States, Europe, Asia and South Africa. Casino mogul Steve Wynn's newly opened $2.7 billion megaresort on the Las Vegas Strip is the company's most notable U.S. client.

In what was termed the chip's East Coast debut, GPI executives showed off the technology Thursday to the media. It is based on the radio frequency identification technology, or RFID, which is used by factories, warehouses and retailers to track their inventory. GPI has adapted it for casino chips.

About the size of a quarter, the computer chip is wafer-thin and virtually weightless. It is implanted in a gambling chip in a way that is imperceptible to casino patrons.

The price of RFID chips has declined in recent years, making them far more affordable for widespread commercial use. The cost of a single chip was $6.25 three years ago, but has dropped to about $2 now, compared to about 80 cents for a regular gambling chip without a microprocessor, Charlier said.

In the old days, many casinos were little more than smoky gambling dens filled with primitive, one-armed bandits. As casinos have modernized, so too has the gaming technology.

Slot machines have evolved into high-tech devices featuring sophisticated animation, 3-D imagery and streaming video. Bar-coded ticket technology allows casinos to closely monitor the betting habits of their slot players.

Gaming tables are nowhere near as efficient as modern slot machines. But Charlier predicted that RFID chips will help close the technology gap between the tables and the slots, benefiting casinos and gamblers alike.

"The two worlds are coming together," he said.

Smart chip technology is the next step in the development of player-tracking systems. With RFID, casinos can follow just about every move of their customers - from knowing what types of games they play to how much they bet on each hand of cards or every roll of the dice.

A gambler's betting habits are tied to the number of free hotel rooms and other complimentary services that casinos give to their best players. RFID chips will eliminate the guesswork in establishing whether a table-games customer is a big-time bettor or simply a low roller.

Equally important to casinos is the way RFID chips will help cut down on cheating, counterfeiting and theft. Charlier said casinos have huge stocks of gambling chips worth millions and millions of dollars. Keeping track of them all is quite daunting.

"Controlling the large amount of currency represented by the gaming chips at the casinos is a crucial and difficult task," he said. "We look at the casino as a little country. In a country, you talk about the money supply, all of the coins and banknotes. The same thing with a casino."

The casino industry is replete with stories about chip theft and counterfeiting. One ploy is for counterfeiters to take phony chips in large denominations and exchange them for genuine chips in smaller amounts - like having a bank cash a fake $20 bill for two good $10s.

Counterfeiters also will artfully alter genuine chips of a small value to resemble chips of a much larger denomination and then cash them in.

"I think the counterfeiters out there are definitely getting more sophisticated," said Justin Woodard, GPI's area sales manager.

GPI's chips are embedded with unique serial numbers to thwart counterfeiting. Electronic readers, scanners and antennas located at the gaming tables and throughout the casino keep track of the chips as they are played or moved around the property.

"It's like you're copying someone else's license plate. The system will say, 'Wait a minute, we already have this one,'" Charlier said of the anti-counterfeiting measures.

Detection systems recognize authentic chips and weed out the phony ones. If, for instance, a counterfeiter takes a genuine small-value chip and alters it to appear like a more expensive chip, RFID can tell the difference.

The technology also guards against internal fraud, GPI officials said. Chips stolen from a casino vault by corrupt employees are flagged if there is an attempt to redeem them. RFID also knows when chips are removed from the property.

"As long as the proper procedures are followed, this can't happen. It stops it cold," Ian Kostman, GPI's systems programmer, explained of the high-tech theft blockers.

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