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International Game Technology (IGT), a leading slot machine manufacturer, has been making great strides in modernizing payments for retail casinos.
Within the span of a week, it has hit two milestones in that regard. First, it has received permission from Nevada regulators to roll out a cashless payment system at casinos in the state. Secondly, it was approved for a patent by the US Patent And Trademark Office (USPTO) for an extension to that technology which would allow payments in the form of cryptocurrency.
IGT is a huge and longstanding force in the US gambling market. At its peak, it supplied as much as 70% of slot machines in use around the US. Now, it is still the leader, but with a more modest 33% share, as a number of smaller companies have managed to penetrate the market in recent years. At the same time, IGT has expanded into the online space, and almost every US online casino carries at least a few of its games.
At the moment, IGT has only deployed a bare bones version of the technology. It allows players to add money to a virtual wallet associated with their casino loyalty card. They can then move money from the wallet to certain slot machines and back again using the card.
Later versions will allow the player to substitute their smartphone for the loyalty card. It is at this stage that cryptocurrency payments may become possible, depending on regulatory approval. The patent covers cryptocurrencies generally, but also mentions the big ones – Bitcoin and Ethereum – by name.
Modernizing payments for the casino industry has been a big talking point for the American Gaming Association (AGA) since 2019. Last summer, it released a list of seven policy principles towards this end. Among other points, it stressed that digital payments would be more secure and convenient for the customer, while also making life easier for casinos, regulators and law enforcement.
By that time, the Nevada Gaming Commission (NGC) was already looking at updating its payment policies. Just a week after the AGA released its policy principles, the NGC removed the language prohibiting the use of such technology. It’s probably no coincidence that this happened at the tail end of the spring shutdown, just as Nevada casinos were preparing to reopen.
IGT was quick to take advantage of the new policy with a product called Resort Wallet (RW). It has been testing this technology in the high roller room of an unnamed property in Las Vegas. On Tuesday, it received regulatory permission to exit the testing phase and deploy RW statewide.
So far, this approval applies only to the first of three variations on RW, the one IGT calls the “carded cashless module.” Players must use their casino loyalty card, and must fund it at the casino cage or when cashing out from a RW-enabled slot machine.
The next step will be testing and approval for the more advanced variations:
It’s this last step which would open the door to the cryptocurrency payment options for which IGT now holds a patent.
Technically, this still wouldn’t constitute gambling with cryptocurrency, as the technology covered by the patent includes a currency exchange step. IGT would accept a transfer of Bitcoin or Ethereum, convert it to USD for a fee, and then use that to fund the player’s wallet. It’s unlikely in the current regulatory environment that casinos will allow players to bet directly with cryptocurrency in the near future.
Even with the currency exchange step, this is a speculative patent. An IGT spokesperson, Phil O’Shaughnessy told Bloomberg Law:
“IGT secured this patent to bolster its industry-leading patent portfolio in anticipation of any possible future direction in regulated gaming involving cryptocurrency.”
These modern forms of payment, especially the externally funded version, fit in with the trend of convergence between the retail and online sectors of the gambling industry. Brick and mortar casinos have their advantages and disadvantages, as do their online equivalents. Operators and technology providers have been hard at work in recent years looking for ways to combine the advantages of each.
This is perhaps most apparent from the online casino end of things. Live dealer products, provided mostly by Evolution Gaming in the US, are growing in popularity. These represent an attempt to bring an authentic casino table experience to the online space. Hard Rock has even experimented with allowing players to operate physical slot machines remotely, through its online casino.
What online casinos offer, on the other hand, is largely convenience and the ability to play for lower stakes. The pandemic has highlighted an additional advantage, however, in terms of safety. Replacing cash with a smartphone app will go a long way towards making brick-and-mortar gaming as convenient as online play, and could help a bit in the other regards as well.
Another area of convergence is in rewards programs. Companies like BetMGM and Caesars now share a rewards program between their digital and physical products. The fact that IGT’s payment technology will use a rewards card interchangeably with a smartphone app may wind up dovetailing with this.
The eventual endpoint may well be that players can use their online casino balances at the tables and slot machines of a retail casino without needing to visit the cage, blurring the line between the two sectors even further.