Chip and a chair
Macau embraces smart gaming table technology
by Ben Blaschke Tue 30 Apr 2024 at 15:50
www.asgam.com/index.php/2024/04/30/chip-and-a-chair/Smart gaming tables have become the talk of the town in Macau, with all six concessionaires having either already installed the technology or confirmed they are in the process of doing so. IAG takes a look at this innovative combination of RFID and AI and explores the many reasons why these tables are set to revolutionize the casino industry.
It was during a recent appearance at a JP Morgan forum in Las Vegas that MGM Resorts International CEO and President Bill Hornbuckle said aloud what everyone had been thinking quietly for some time: Macau’s foreigner-only gaming zones concept hadn’t worked.
MGM Resorts CEO and President Bill Hornbuckle
The foreigner-only concept was first mooted by the Macau government in late 2022 as a way to track foreign play, part of its efforts to boost international visitation to at least 10% of total visitor arrivals in the coming years. To encourage concessionaires to follow, the government dangled a possible tax break of up to 5% on any gaming revenues generated by foreign players.
However, as Hornbuckle noted, “That means everyone from Thailand has to go over to a little room and gamble [and] the customers didn’t like it.” But MGM had a ready-made solution, courtesy of the RFID technology – “chip in chip” as Hornbuckle called it – that the company had first implemented at MGM Cotai some six years earlier.
MGM Cotai was the first Macau property to install smart table technology
“The one thing the ‘chip in chip’ enabled us to do was let people go anywhere they want in the casino, because we can track their every move and their every play,” he explained. “Mr Jones can go anywhere and we can track his every play, which is a huge advantage because customers do not want to be isolated.”
MGM Cotai was the first Macau property to install smart table technology
It is this potential solution to the tracking of foreign players that has sparked the interest of industry analysts and media alike in recent months, making RFID, or “smart”, gaming tables the flavor of the month.
But there is much more to it than that. From the benefits of gaming chip attribution and player ratings to fraud detection, game speed, game complexity and even table game layouts, the introduction of this technology promises to be so transformative as to completely reshape how casino floors are run within the next decade.
In Macau, it hasn’t taken too long for the penny to drop, and while MGM has undoubtedly stolen a jump on the competition, all five of its rival concessionaires – Galaxy Entertainment Group, Melco Resorts & Entertainment, Sands China, SJM Resorts and Wynn Macau – are currently in the process of installing smart table technology.
IAG understands that four of those are using technology from Walker Digital Table Systems (WDTS) – the same company utilized by MGM – while Sands China began installing Angel’s hybrid smart table system comprising both RFID and AI Capture (artificial intelligence applied to table mounted camera images) onto their tables in 2019 and expects to have all baccarat tables at Sands’ Macau properties online as smart tables over the next few quarters. Angel also supplies its hybrid smart tables to Singapore’s Marina Bay Sands and the properties of Australia’s Star Entertainment Group, among others.
Walker Digital Table Systems will soon have its technology installed in the properties of five Macau concessionaires
In Melco’s 4Q23 earnings call in March, Chairman and CEO Lawrence Ho revealed the company was receiving its first RFID tables in April and would continue to roll out more in the months ahead.
“We’re getting them for the first time and there’s going to be a learning curve, but we’re excited to see and to make use of the full potential of these RFID tables,” he told analysts.
Just as keen to see smart table technology installed throughout the city’s casinos is the Macau government, which has, according to reports, made it known that such an investment by the six concessionaires would be looked upon favorably.
While the enormous amount of data the government can expect to gain access to may well be its main appeal, Stephen Moore, the founder and CEO of WDTS, adds, “Gaming regulators usually want a fair game. They want to make sure that they have the least amount of player complaints as possible, so that means if you run a perfect game and a fair game, then nobody’s going to be calling your hotline and complaining that the casino cheated them somehow or made mistakes.
“Regulatory bodies are also really out to collect their taxes,so any improvements that you can make to the bottom line of the casino improves the bottom line of the government as well.I would think that there’s probably equal motivation to make sure that they also get their fair taxes and the correct amount goes to government.”
So, what exactly is smart table technology? The WDTS system utilizes radio frequency identification (RFID), with an RFID chip located inside each individual gaming chip and a network of fixed antennas built into the table to detect and identify these chips as they are moved about the layout. Smart floats with built-in RFID readers provide similar visibility around chip inventory.
Artificial intelligence is also critical to the technology’s accuracy, although how this is incorporated differs significantly from supplier to supplier.
In the case of WDTS, AI is primarily utilized for the purpose of data analysis, with the company having developed a series of AI-driven apps focused on features such as fraud detection, forecasting, player evaluation and the identification of advantage play. WDTS also utilizes an AI camera for non-baccarat games to detect card and dice outcomes, and for player-recognition in markets where this is approved.
The Angel system considers a “hybrid“ approach as its preferred solution by adopting an AI camera system with two cameras installed on each side of the gaming table to automatically obtain the position, quantity and type of chips in all stacks, capture player actions and ensure that the number of RFID chips in any betting spot matches the total number of chips it sees. This is particularly useful in identifying players’ actual bets (including multiple players per box) so they are rated on their actual betting to give a truer indication of player worth and status. The AI Capture technology, working together with RFID, not only detects fraudulent chips but, once betting action is complete, will confirm that no chips are removed or additional chips added to the layout in the form of “chip pinching” and “past post betting”.
“The Angel smart table (known as Angel Eye Complete) is designed to capture and recognize all of the chip movements at a table, alert the casino in real time when and where errors arise, and include usable data into a database integrated to casino management and other systems used by various departments, such as Surveillance and Marketing,” explains Asuka Kurahashi, President of Angel Macau Ltd.
Angel’s Asuka Kurahashi
“In other words, with a smart table, the casino can know how much is bet where and by whom, and based on the result – Player win, Banker win (on baccarat) – it can also capture how much the dealer pays out and how much inventory there is after each game.”
Kurahashi adds that the company developed a hybrid solution “because we believe RFID is best for inventory while AI and cameras are important for betting applications and provide a flexible platform for enhancement, such as if a casino wishes to add additional side bets. The hybrid solution also provides a basis for development of additional game types such as Sic Bo, Roulette and Blackjack.”
Both Angel and WDTS tell IAG that instances of players using counterfeit chips have vanished entirely on gaming floors that have their RFID technology installed.
Ironically, while the use cases for smart table technology are wide and varied, the earliest iterations were primarily envisioned as a marketing tool – allowing operators to offer complicated side bets and dynamic odds backed by a system that could help dealers payout accurately without having to make complicated calculations themselves.
Early trials were challenging – Moore describes the RFID in those days as “unreliable” – but by the time WDTS rolled out its first 88 tables at Genting Highlands for an initial 60-day test of the company’s “Elite Baccarat” game concept (which allowed players to place bets after first cards were dealt and with dynamic odds), it proved so popular that this two-month test period turned into a 517-day residency.
Grant Bowie, the former CEO of MGM China
“The players that enjoyed those bets absolutely loved it, and every time they tried to move the tables or turn them off, the players complained,” Moore recalls. “They were hand-built tables, they were very hard to keep working back in the day, but we learned a lot about those wagers and those bets.”
But there was much more to come.
“We took [the product] to G2E in Las Vegas and put it in a friend’s gaming booth and just started showing people – gaming operators and suppliers on the strip – and every one of them would stop and say, ‘Wait, you can read how much the player wagered?’
“We’d say, ‘Yeah, we need to do that to tell the dealer how much to pay and to make sure the dealer pays it out correctly.’
“And that’s all they really cared about, so we figured we would just work on that aspect because that’s what the customers wanted. We accidentally just happened to perfectly track wagers, so we pivoted from away from the bet and went for the platform.”
It was 2016 when MGM China – the Macau subsidiary of MGM Resorts – entered the fray. Looking to gain a competitive edge for its US$3.4 billion MGM Cotai integrated resort development, which was still two years from opening, MGM China’s then CEO Grant Bowie had developed a concept that would later become known as “chip attribution” as a means of combatting some of the frustrations his team faced as an operator in the world’s biggest gaming market.
“We were becoming more and more aware of security and control issues,” recounts Bowie, “and if you remember at that point in time there had been a whole series of incidents at many of the casinos with counterfeit chips, with casino hosts fabricating ratings and doing all sorts of things. So, from my perspective, [RFID] was less a marketing tool and more a transformational tool.
“I also saw this limitation and frustration on a gaming table around how much time the dealer spends on buy-ins and color change and all of that stuff, so the whole notion as I saw it was how to get chip transactions, other than actual play, off the table.
“We used to have this problem where you would get a run-on and you could spend 15 minutes having to work out whose bets were on and whose bets were off, so to me it was about a productivity issue. And certainly, as casino operators, the fundamental notion was the more decisions you get and the faster the game, the closer we get to theoretical. So that’s where it started, this notion of chip attribution – taking all the chips and all the cash transactions so there would be no cash [at the tables], no buying in, no drop boxes, no count anymore. Let’s just do all of that at the cage.”
To Moore, the ability to attribute chips to a specific place or person represents a watershed moment for the industry.
“Knowing the exact location of the chip and where it’s supposed to be, so you know when it goes somewhere that it’s not supposed to be,” is key, he explains when asked why attribution is so significant.
“I’ve seen in casinos where a dealer will flip a chip off the chip tray and onto the floor, then pick it up later with their foot. With RFID, because that chip is attributed to that chip tray and that table on that day, as soon as it comes out of the tray for any reason other than a valid transaction like making change or payout of a wager, it’s basically identified as stolen and turned off because we see that it’s not where it is supposed to be.
“It’s the same with a fill. You package up a fill at the cage and it goes into ‘in-transit status’. The chip will only work at the table it was meant to go to and nowhere else. It’s dead. It has no monetary value until it’s reactivated at the table where it’s supposed to go.”
The practicalities are countless. In demonstrations given to Inside Asian Gaming by both Angel and WDTS, the technology proved flawless in detecting everything from the presence of a single counterfeit chip in a stack of active ones to players adding or removing chips post game result. It was also millimeter perfect in detecting not only the precise location of chips on complicated table layouts with multiple side bets, but in recognizing exactly which players had placed each bet and assigning payouts accordingly.
As Angel’s Kurahashi explains, this ability to detect when and where bets are placed – and specifically when a player fraudulently adds or removes chips post game result – gives “much more flexibility to users in terms of table layout design, which is very important to the casino because it will have an impact on how the player bets.
“With this system the casino can have whatever layout they want, with side bets closer to the player, for example,”she says. “These kinds of bets have much higher payouts but also much higher house edge.”
Yet there is one benefit of smart tables that stands above all else as a truly transformational tool for casino operators worldwide: the ability to accurately assign player ratings.
Under traditional loyalty and ratings systems, the rating of individual players has largely been an exercise in guesswork – often logged as a time derivative rather than from any detailed analysis of how much they bet, the types of bets they place or even if they are betting every hand.
“That’s important because at the moment casinos are giving player points based on assumed information,” says Kurahashi. “Players therefore tend to be over-comped or under-comped, but if you know the actual bet behavior for each client the casino can give more precise comps to each player. It can know who the valuable players really are. The gaming industry is very competitive so it’s extremely important for casinos to know who they should be targeting and marketing to.
“This is even more so now because the market is shifting towards a mass market, and those mass players, they are a little bit younger and they are used to a reward points economy, be it through airlines, restaurants, retail shops – everybody has loyalty schemes – so it’s very important to appeal to those new players.”
“The biggest issue in the industry is how you value players,” adds Clayton Peister, Principal and analyst for differential labs and at various times over the past decade a senior marketing executive for Melco Resorts, Las Vegas Sands and Wynn Macau.
“I’ve been working with data for a long time now, and we can see that ADT (average daily theoretical) is only within about 20% accuracy, about 25% of the time. That means 75% of the time it’s more than 80% off.
The Venetian Macao
“Now, at the end of the year, those numbers pretty much converge, but for an individual player it’s wildly inaccurate. From a marketing perspective, let’s say you have a limited number of hotel rooms – which most operators do – and you have two players that have exactly the same theoretical, but one player is comfortable losing 80% of his bankroll and the other guy uses money management so he will lose only 20%. You’d much rather market to the guy that has greater risk preferences, and that’s a big sea change in terms of how we market to players.”
For Moore, the real beauty of having 100% accuracy in rating players is understanding the betting patterns of risk-tolerant players and rewarding them for that risk. A $100 bet on tie, he notes, is worth more to the casino than a $1,000 bet on banker, but players haven’t traditionally been recognized for such wagers in the past.
“Once you know the bet mix of those players and what kind of side bets they like, you can have tables for those people so that down the line you can really start to craft the product that the players prefer,” he says.
“They don’t have to sit at a table with a whole bunch of people taking insurance if they don’t like insurance, or with a whole bunch of punters on Lucky Six if they don’t like Lucky Six.
“It’s also important to give value to players, but at the same time, for all the players getting value for tracking their play perfectly there are also a set of players who are always over-comped or over-evaluated – somebody who just plays Banker, takes a lot of free hands, turns around, talks, forgets to bet sometimes and really milks the system, because the legacy equation relies heavily on time.
“Now we can weed those players out so the casino can lower its marketing expense on those people and appropriately reinvest in the players that matter.
“We’ve seen it in Malaysia because of Singapore, and we’ve seen it in Macau where when you perfectly rate a player and reward them accordingly, they go to another casino that doesn’t rate them perfectly and that casino only sees them as 40% of what their total value should be.
Clayton Peister
“That casino is looking at what the player has been given elsewhere and is saying, ‘If they’re giving you that kind of offer they’re buying the business, you’re not worth that to us.’ Well no, they just have more insight and better data.”
And it’s the data that smart table systems provide that really set them apart from anything else in the market.
“What has really become clear is how rich and fantastic that data is,” explains Peister, describing the technology as already superior to that employed in the field of slots.
“You probably would have heard people say that we now have slot-level accuracy on tables but it’s actually a lot better than that. This is more like online accuracy. With slots, back when they were established, you didn’t have storage like you have today, so all that would come across from the individual machine was rating session info if you were rated and playing with your [membership] card.
“We would know when you started playing, when you cashed out, how many spins you had, what your total aggregate theoretical and total aggregate loss was. We might know jackpot value, but we don’t know things like how many features the person hit. Did they increase their average bet after they hit a feature? Any of that behavior that happens within a session is still unknown. You see it online a little bit, but you don’t see it at the bricks and mortar casinos because it is still this legacy system. What [RFID and AI technologies] bring for tables is really better than the data the bricks and mortar data operators are gathering from slot machines.”
Peister notes that being able to accurately log table turnover – a number that has largely relied on guesswork in the past – is “critically important … unlocking that data allows us to really understand all sorts of things such as average bet, game speed and how you change your betting behavior risk preferences.
“It just takes a little bit of AI, a little bit of analytics, and you can really open up a world of insights.”
Says Bowie, “It’s not just about automating what we’re doing, it’s going back and saying, ‘If we could start setting up systems again, how would we do it?’ You would never have chips being sold at the table. You’d never have the ability for dealers to dump chips or anything like that. This ensures that.
“It’s moving all of that accountability back to the cage, back into finance, because that’s actually who owns it all the time. Gaming people think they own all the chips on the table, but they don’t. It doesn’t sit in the table game department, it sits in the cage. And what we now have the ability to do is know where those chips are all the time.
“That’s an amazing thing.”
