Make Money At Gambling

Forgive Kirk Sanford if he thinks about gambling more often than the typical businessperson. No, the CEO doesn't skip work to play table games (that's saved for an occasional weekend only). Sanford focuses on gambling because it drives his business, Global Cash Access, a 250-employee company based in Sunnyvale, CA.

Global Cash provides the gaming industry with products, services and technology that allow casino customers to access funds through automatic teller machines (ATM) and point of sale (POS) devices. The company services an incredible 85%-90% of the casino market in the United States, Canada and the Caribbean. It posted gross revenues of over $250 million in 1998.

Touch Screen System Increases Cash Flow
A recent Global Cash project involved converting its entire client base (over 1,000 different casinos) to QuikCash terminals. The QuikCash units are equipped with touch screen and smart card functionality. They also include Hypercom ICE 5000 terminals and FastPOS™ 9600-baud modems.

The system it replaced, consisting of generic POS transaction terminal devices, had several shortcomings besides not being Year 2000-compliant. It did not have a user-friendly touch screen and did not allow for entry of a personal identification number (PIN), which is required for POS debit transactions.

Also, the transaction equipment operated on a mainframe configuration; the new system operates on a client/server configuration. Sanford summed up the old unit by describing it as having "limited flexibility. A gaming patron may walk away from the kiosk because POS debit transactions weren't available. That's a missed money-making opportunity."

The new system seizes upon those opportunities. "When a customer walks into a gaming establishment, we provide all ways for them to get cash. POS debit cards, credit cards and a check-cashing program tie in with the system. Customers can also send and receive wire transfers through Western Union."

Global Cash and the casinos make money from service fees applied to patrons who use these devices in the casino. The fee ranges from 3%-6%, depending on the casino. Sanford said Global Cash is highly profitable because of the volume of transactions facilitated by its systems.

To convince the casinos to upgrade to the QuikCash system, Sanford cited this statistic: converted casinos are reporting an additional 20% in cash access transactions on their new POS debit systems. Sanford estimates that on an annual basis, the QuikCash machines process nearly $4 billion.

Smart Card Capabilities Entice International Customers
Why the big jump? "The new system processes more quickly than the old system," Sanford said. "When something is more user-friendly, people will use it more often." Sanford said a major selling point is the touch screen. "It's easy to use and can change graphics to market to a particular customer. For example, if someone is using a credit card, the screen will display higher pre-selected dollar amounts than if that person were using a bank debit card."

Sanford added that the system's smart card (cards with a microchip instead of a magnetic stripe) readiness also helps increase business at the casinos. "International customers are carrying smart cards more often," said Sanford. "Being smart-card ready is beneficial for today and for the future."

Sanford sees cashless gaming around the corner. "There's a shift in the industry," he said. "People are carrying less cash and more plastic cards to casinos. Why bring cash when they can get funds so easily from these machines? Soon there will be technology that allows customers to insert their debit card instead of cash into individual slot machines. The bill acceptors will be replaced by debit card acceptors."

Casino Installation Redefines "Getting To Work Early"
The recent 1,000-site installation cost Global Cash Access $5 million. Sanford said the only objection some casinos had to the sale concerned new technology. "The Hypercom ICE terminal was a new POS device," Sanford said. "This technology had never been implemented. The additional revenue generated by the addition of the POS debit service alone justified the cost. Plus, electronic back-office accounting procedures eliminated the old manual processes which could be pretty complicated."

Sanford said one of the biggest challenges of this project was installing the systems during a casino's downtime. "Gaming is a very customer-driven business, so we had to keep the entire system running while one machine was converted," Sanford said. "Generally the slow times in a casino are between 2 a.m. and 3 p.m. Monday through Thursday. It's not unusual for us to make service calls at odd hours."

Time Zones Add Challenge
Coordinating various time zones and currencies is another challenge of a conversion of this magnitude. "The sheer scale of a project of this size puts demands on your operational folks," Sanford said. "Internationally, different countries have their own currency and different requirements by which we have to abide."

Sanford said these challenges will increase as his company expands into the Pacific Rim. Tying in with that, he said the system can be upgraded by adding Japanese to the multilingual functionality. Other upgrades include Internet-based cage applications and additional smart card applications.

Sanford said that Global Cash Access is not complacent despite its dominance of the gaming market. "We must always seek to provide the best technology and best service at the right price."