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Digital slots could transform gambling industry

Engineers at PureDepth Inc. spent years developing tools for helping the military plot 3-D maps of war zones, eventually licensing top-secret technology to the U.S. Air Force and Navy.

But the Silicon Valley startup hit the jackpot in October when it inked a deal with International Game Technology Inc., the world's largest maker of slot machines.

Industry experts say a realistic digital video display is the final hurdle that will completely digitize one-armed bandits. The new displays by PureDepth and others -- set to debut later this year -- could profoundly change the $85 billion U.S. gambling industry and how it's regulated.

When high-tech slots are in place, programmers will be able to control nearly every aspect of the game -- cost, payout, even the images that line up on the payline.

Casino operators will be able to make changes in real time through back-end servers that talk to computer chips inside the slot machines.

"This is the last piece of the puzzle," financial analyst Aimee Marcel Remey, who follows the gaming industry for Jefferies & Co. "These new systems are so different from the slots out there now. You feel like it's an exact science, every time you pull."

If the Beach Boys are playing the Luxor in Las Vegas, next-generation slots could display images of band members instead of cherries, numbers or other symbols. If band members' faces line up, an embedded printer could spit out front-row tickets.

Or suppose the penny slots area at a tribal casino empties out around 7 p.m., when big spenders arrive. With a few keystrokes, programmers could change the minimum bet to $1 and offer a progressive jackpot with all slots in the house -- or even with thousands of machines statewide.

"If the NASCAR folks are coming to Vegas, they could change the fruits to cars," said Fred Angelopoulos, CEO of Redwood Shores-based PureDepth, founded in 1999. "You can start thinking outside the box, literally."

Without digital displays and servers, employees would have to manually close out meters, change glass, change reel strips and physically relocate and remove machines.

Digital slots, however, are vulnerable to the same bugs and malfunctions that plague personal computers. Regulators say they'll be seductive targets for hackers, who have been trying to rig games for decades.

In 2000, a programmer in Edmonton, Canada, found a software glitch that let him regularly win $500 or more on some video poker machines. The maker of the machines -- WMS Industries Inc. -- estimated the incident cost at least $1 million and sued the man, who threatened to publish the flaw online.

The Nevada Gaming Control Board, which sets the pace for regulators nationwide, adopted new rules last year for digital machines. The board must approve all software modifications -- even pictures on reels. The approval process takes up to 30 days.

The board employs 11 experts in computer science, electronic security and wireless networking. It will double the number of these specialists by late 2007 and build a new research facility to deal with an expected profusion of digital slot machines, said Mark Clayton, who heads the board's technology division.

Executives at the top three manufacturers acknowledge that networked slot machines are a seductive target for hackers and are reluctant to call them hack-proof for fear of inviting challenges from would-be invaders. Instead, they're working with regulators to reduce the potential damage if such an attack occurred.

Roughly half the 835,000 slot machines nationwide have video displays and many are networked, but industry officials acknowledge that most are flops, lacking the visceral "clunk-clunk-clunk" of wheels hitting the payline.

Video slots with an authentic feel are the holy grail for manufacturers.

PureDepth searched for a mechanical alternative to the traditional optical tricks for fooling the eyes and brain into seeing depth. Such tricks -- fancy versions of 3-D glasses -- induced nausea and headaches and were rejected by casino operators, who stuck with mechanical reels or flat video displays with no depth.

With the cost of liquid crystal displays dropping, engineers at PureDepth's lab in New Zealand decided to house two or more LCDs in one physical unit to create depth -- a deceptively simple idea protected with 45 patents and roughly 70 patents pending.

Reno, Nevada-based IGT is hoping to debut the first machines with PureDepth's multilayer video display in November at the Global Gaming Expo in Las Vegas. The company won't say how much they'll cost, but they'll be more than mechanical reel machines, which cost up to $15,000.

A different approach on a 3-D video slot system will debut next month, when Waukegan, Illinois-based WMS is expected to introduce a "Monopoly Super Money Grab" slot machine. Its hybrid display features a mechanical reel behind a video display that activates when the payline hits certain combinations.

Traditional three- and five-reel slots have a finite number of combinations, but adding a video layer allows programmers to exponentially expand the possibilities.

"The mathematics drive the game, and the more mathematics you can derive, the more combinations you can create," said Larry Pacey, senior vice president of product development at WMS, which developed the patented technology with Tokyo-based Pachinko powerhouse Aruze Corp.

One thing that's unlikely to change in the new era of digital slots: the slim odds of winning big.

"Let's be honest: Everything about a casino design is meant to play on the player's psychology," said Jeffrey Allen, director of business development for Las Vegas-based Bally Technologies Inc., another top slot machine maker. "Why else would there be no clocks and comfortable chairs and subdued lights?"

Ed Rogich, an IGT vice president, said players who tested video display prototypes earlier this year could hardly tell the difference between them and manual reels. That's a good sign: Many old-school gamblers prefer low-tech slots.

Earlier this month at Cache Creek Casino in Brooks, Margaret Spence criticized the present version of video slots and wistfully recalled the days of old-fashioned reels.

"I still miss pulling that old lever, and I miss that big tub of money that would fill up with coins when you hit the jackpot," said Spence, 71, a Concord resident who currently favors $1 "Blazing 7s" machines. "The video machines seem like a waste of time -- like a video game."

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Gambling News :

Tain Fast Bet - Our readers will recall Tain recently increased the number of live events it covers each month to 23,000, covering both traditional markets such as football, tennis and US sports and the more obscure curling, biathlon and Water Polo.

Olympic Entertainment Group Mobile Gaming - In its full-year 2016 report, Olympic Entertainment Group (OEG) has informed the establishment of a Malta-based company registered to facilitate its intended expansion into remote gambling.

Circus Evolution HD Slot - Malta-based content provider World Match has released its first title of 2017, “Circus Evolution HD”, a 5-reel, 3-row, circus-themed adventure offering Free Spins, Wilds and a Bonus Game.

Kindred Group Gets EU Recommendation on Consumer Protection - Kindred Group (formerly Unibet) has become the first operator to successfully meet the requirements of the EU Recommendation on Consumer Protection and Responsible Gambling following an external audit.

17 Crown people still detained - Reports from China over the weekend suggest that the 17 Crown people still detained could be looking at another twelve months of imprisonment as investigations into their alleged and still unspecified crimes drag on

SB1400 Virginia Poker Skill Game Bill - Her bill SB1400 is currently with the Senate General Laws and Technology Committee, whose 15 members will decide whether to progress it or condemn the Senator to another year of failure.

Pennsylvania Video Gaming Association - With the focus on Pennsylvania as the most likely next US state to legalize online gambling as part of a general gambling expansion measure, reporters noted this week the emergence of a new lobbying group in the state - the Pennsylvania Video Gaming Association.

Stiffer Problem Gambling Penalties in UK - The Guardian newspaper reports that the UK Gambling Commission plans to unveil new enforcement strategies on problem gambling and money laundering prevention this month, laying down tougher penalties for operators who fail to tackle these issues.

Malaysian police Destroy over 5000 Gambling Computers - Malaysian police in Kajang have destroyed 5,042 computer sets seized in online gambling raids over the past two years, explaining that the action is designed to take the machines out of circulation.

Spartan Poker vs SpartanPoker name War - Pokerguru, which owns the brand SpartanPoker.com, has threatened to sue the Indian Poker Championship over its use of the title Spartan Poker, and recently published a notification that it is not associated with the IPC version of the brand.

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