A step closer to going mobile
By Howard Stutz
LAS VEGAS, Nevada -- Some 20 months after Nevada casino regulators approved rules governing wagering on wireless hand-held gambling devices, mobile gaming remains an uncharted mystery.
But some of the questions may start finding answers in November.
Cantor G&W, an affiliate of New York-based financial services firm Cantor Fitzgerald, hopes to begin testing a wireless gambling device on a small scale at The Venetian. The company is asking the Gaming Control Board to allow customers frequenting the semiprivate lounge inside The Venetian's high-end slot parlor to wager on a device no larger than a personal digital assistant.
At the very least, Cantor G&W executives plan to allow attendees to the upcoming Global Gaming Expo who visit The Venetian play the mobile gaming devices for free to show their capabilities. The G2E in mid-November is the casino industry's largest trade show.
"We're trailblazing here," said Lee Amaitis, president of Cantor Fitzgerald's gaming division in London. He is also overseeing Cantor's efforts in Nevada. "We have basically done more than is required for testing this technology and we want to make sure everybody is comfortable with (the concept). People want to see the living, breathing thing. Once it gets into action, I'm optimistic it will be well-received."
Conceivably, mobile gaming would allow casino patrons to wager on blackjack, bet on the spin of a roulette wheel and play slots machine from public areas away from the traditional casino, such as poolsides, buffet lines or outside convention areas. Gamblers would set up accounts with casinos for mobile gaming. Firewalls would shut down the devices and prohibit gamblers from wagering outside of a resort's public area, including hotel rooms or away from the property line.
Cantor spent more than $400 million to develop technology used for wireless interactive bond trading on Wall Street. The company then led the initial charge to transfer that same technology into the casino environment. Cantor officials lobbied state lawmakers in 2005 to approve mobile gambling and offered comments when regulators wrote the standards.
The company became Nevada's first licensee approved to manufacture and distribute hand-held gaming devices in May 2006, two months after the regulations were approved. However, it's taken more than a year to get its products through the Gaming Control board's testing laboratory.
In addition to Cantor, slot machine giant International Game Technology and Fortunet have also been granted manufacturer and distributor licenses. Only Fortunet, however, has a mobile gaming device in the control board's laboratory along with Cantor.
IGT spokesman Ed Rogich said the slot machine manufacturer, which was approved for mobile gaming in August 2006, is concentrating most of its efforts on developing server-based slot machines, which industry analysts believe will be the next wave in retooling casino slot floors. Server-based gaming potentially would allow slot machine players to pick and chose which games to play from a menu. Casinos would also be able to customize their slot floor.
Rogich said IGT might unveil some mobile technology during G2E.
"We've showed some of the technology privately," Rogich said. "We see the mobile gaming applications fitting into the whole suite of products that will be part of our server-based gaming initiative. Right now, we don't see a huge demand for mobile gaming."
Stifel Nicolaus Capital Markets gaming analyst Steven Wieczynski said server-based gaming will dominate G2E.
"Many investors are still trying to get their hands around this technology and we believe the focus for most manufacturers will be where they are in terms of deployment and pricing," Wieczynski said.
Mark Clayton, the control board member overseeing the implementation of mobile gaming, agreed mobile gaming is a server-based gaming system. He said the behind-the-scenes technology for the devices needed initial approval from the laboratory before the devices could be tested. He said concepts have been presented where mobile gaming devices could also be used for casino promotions or to advertise restaurants.
"There has been some concerns about the speed of bringing the gaming product to market, but the newness of the technology has driven the process," Clayton said. "Right now, we are just looking at the gaming aspect."
Amaitis hasn't been too concerned with the time element. In the past year the company signed a deal with Las Vegas Sands Corp. to place the mobile gaming devices at The Venetian and the soon-to-open Palazzo. Also, the company signed gaming content deals with several slot machine makers and gaming equipment providers.
"Because this is brand-new, the regulators need to get comfortable with the idea," Amaitis said.
Cantor's mobile gaming device has nine different casino games; blackjack, roulette and baccarat, three types of video poker and three different slot machine games. The slot machine and video poker games have 5 cent, 10 cent and 25 cent denominations. Cantor Chief Technology Officer Ron Rushin said low denominations are being used during the testing period to stay under Internal Revenue Service reporting guidelines.
When Cantor is approved to conduct a 90-day test of the mobile devices at The Venetian, the company will restrict wireless gambling to the casino's high-end slot area. If the device were taken outside the room, it would shut down.
Amaitis said additional games, such as Texas Hold'em Bonus Poker and Carribean Stud, will be added in the second phase.
"Right now, this is pretty vanilla," Amaitis said. "It's both educational and gimmicky. The next stage will have a different type of experience."
HOW IT WORKS
Customers set up an account and are given a wristband with an imbedded microchip and a password. Both are needed to log onto the device. Every 20 minutes or so, the gambler has to logon onto the device anew, but doesn't lose credits doing so. During the test, the device will log off if a customer leaves the high-limit slot area.
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