Casino customers have been slow to adopt cashless gaming and the industry should expect it to be a lengthy process. It won’t happen until players become more familiar with it and the technology evolves and becomes more seamless to use, according to a casino technology expert.
Kurt Williams, co-founder and CEO of Casino Cash Trac, a company that uses data to streamline operations and optimize decision making, said he’s gained his insights after working with several of his casino customers. He appeared Monday at the opening of the TribalNet Conference & Tradeshow in suburban Dallas and spoke during a panel discussion on the future role of cashless gaming.
“We’ve had a chance to work with several of our customers as they started to introduce cashless on the floor,” Williams said. “It’s a slow start and they expect it to be a slow start. It’s going to take awhile to get that adoption throughout the process.”
That’s not stopping the industry from going cashless, however. Casinos see the opportunity of decreasing the labor and equipment costs of handling cash and growing revenue, Williams said. Benefits also accrue from the customer-service perspective of having frictionless gaming that enhances the experience on the casino floor, he said.
“That’s the primary reason we’re seeing most of our clients head in that direction.”
The slow adoption rate by customers for cashless isn’t surprising, Williams said. That’s true for the history of technology in general, but specifically when much of the revenue at tribal and regional casinos is coming from players who are 55 and older and don’t find the technology seamless.
“As these solutions come out and they’re working through getting them seamless and frictionless as they’re using it, you’re going to get a little higher adoption rate,” Williams said. “You have an entire ecosystem in your casino right now. You have food and beverage outlets and table games, slot machines and kiosks and cashless at the front. Having that ability to use the same functionality throughout the process is vital. If I have to leave my cashless to move over into another form of ticket, use cash, or switch to credit card, it’s one more reason to avoid using that functionality altogether.”
It took time for customers more than 20 years ago to adapt to TITO in slot machines when it moved from cash- and coin-based, Williams said. Today, 80% of TITO transactions go back into the slot machine and with the remaining 20%, some four-fifths of that is redeemed at kiosks rather than the cages.
“It was not an overnight adoption,” Williams said. “It took a long time for people to adopt using those kiosks and getting away from lines at the cage. You have to work with and educate your customers to get them through that process and technology has to catch up and make it a seamless experience.”
Time will also help, Williams said. That happens as younger generations, who are more familiar with technology, become bigger players in the future.
Casinos are targeting their higher-end customers when they roll out the technology to test cashless.
That’s what Viejas Casino & Resort in San Diego did, according to Ram Patrachari, CIO and vice president of IT at Viejas Enterprises.
“The primary reason we went cashless wasn’t on the revenue side of things,” Patrachari said. “We’re much more focused on the guest service. Typically, when you talk about cashless, you’re targeting the cream of the crop and higher tier, because if somebody does cashless and books $5 every time, it doesn’t make sense.”
Williams said it’s important to get the decision right and not change out cashless operators. It’s never good to disrupt what the top 20% of players are using, because they’re providing 80% of the revenue, he said. “Once you’ve made that decision, you’re married to a vendor for a long time.”
Rick Arpin, a managing partner with KPMG and moderator of the panel discussion, said the best example of rolling out cashless has been Starbucks. The company’s technology was easy to use, it gave out free rewards, and it got people to buy more coffee and earn them more revenue.
“That’s a model casinos should follow to increase adoption of cashless technology,” he said.
