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China’s casinos use these tools to spot and track the biggest potential losers

MACAU WYNN CASINO
The fountain of the Wynn Macau casino in Macau, the Chinese territory that’s at the center of global gaming.
(Kin Cheung / Associated Press)
Bloomberg

The house always wins — and now it has artificial intelligence on its side.

Some of the world’s biggest casino operators in Macau, the Chinese territory that’s the epicenter of global gaming, are starting to deploy hidden cameras, facial recognition technology, digitally enabled poker chips and baccarat tables to track which of their millions of customers are likely to lose the most money.

The new technology uses algorithms that process the way customers behave at the betting table to determine their appetite for risk. In general, the higher the risk appetite, the more a gambler stands to lose and the more profit a casino tends to make, sometimes up to 10 times more.

The ability to identify customers with the potential to bet — and lose — big means that operators can offer special attention and targeted perks to keep them gambling. In a system from a German firm, Dallmeier Electronic, facial recognition alerts floor managers once a high-value customer walks into the casino or sits down at a table, allowing them to immediately dispatch staff to the customer’s side.

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“Those who can afford to lose, those who play even more when losing money, we can for sure offer them a free meal,” said Andrew Lo, executive director of Macau junket operator Suncity Group Holdings Ltd. Suncity will use technology developed by Las Vegas-based Walker Digital Table Systems — which can invisibly track chips, wagers and game outcomes — at the casino it is building in Hoi An, Vietnam.

This embrace of high-tech surveillance comes as casino operators jostle for growth in a slowing industry that’s under pressure globally from economic head winds and regulatory scrutiny. In the world’s biggest gaming hub, where expansion is reaching its limits, two casino operators — the Macau units of Las Vegas Sands Corp. and MGM Resorts International — have already started to deploy some of these technologies on hundreds of their tables, according to people familiar with the matter. Sands plans to extend them to an additional 1,000 tables, the people said.

Three others, Wynn Macau Ltd., Galaxy Entertainment Group Ltd. and Melco Resorts & Entertainment Ltd., are in discussions with suppliers about also deploying the technology, according to the people, who asked not to be identified because they’re not authorized to speak publicly about the plans.

Suncity said it is planning to deploy a system in which radio-frequency identification technology, which attaches tags to objects, is installed on chips and tables, storing data on players.

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The gambling giants are motivated by the challenge of maximizing profits from the growing Chinese middle class, who stream into Macau en masse as it’s the only place in greater China where gambling is legal. More than 3 million people visit the territory every month, from wealthy and focused bettors to families on short trips with grandparents and kids in tow. The advanced surveillance technologies give casinos a way of easily separating those who might become serious gamblers from those just having a fun weekend.

It’s not unusual for casinos to have surveillance cameras for security and to detect cheating, with Las Vegas operators utilizing RFID-enabled chips that they can disable if they’re stolen out of the casino. But these new technologies go a step further in tracking and rating every customer, building up a treasure trove of data.

Sands China, the Macau arm of the world’s largest casino company, recently received approval from the territory’s gaming regulator to deploy the technologies, the people said. Dallmeier Electronic worked with casinos to redesign cameras so they could be embedded into columns and not be visible to customers, said EP Smit, senior enterprise solutions manager for the Regensburg, Germany-based company.

While the companies differ somewhat in the technology that they offer, the general setup is this: Gamblers’ betting behavior is tracked through high-resolution cameras and RFID-enabled poker chips and tables, with the intelligence gleaned from them flowing into a centralized database where a risk profile of the individual is created.

Representatives for MGM, Galaxy Entertainment, Sands and Wynn didn’t respond to requests for comment, and a spokesperson for Melco declined to comment on business matters that aren’t public. Macau’s regulator, the Gaming Inspection and Coordination Bureau, didn’t respond to emails and calls seeking comment.

In a recent product demonstration at a Macau industry conference by Walker Digital, its vice president of Asia operations, John Orth, assured a potential buyer: “Your customers don’t even realize they are being tracked.”

The system can track individual gamblers down to how often they take “side bets” on a baccarat table — a bet on very unlikely events such as a tie, which have higher risks and higher returns. Gamblers who favor side bets can yield about 10 times the profit for a casino compared with a gambler with an average risk appetite.

The technology can also help detect any dealer-player collusion, preventing fraud, and it can track the speed and accuracy of dealers, doubling as a performance management tool.

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Ultimately, casino operators can rate each player with a combination of metrics they can tailor, such as the total time a player has spent in casinos, their betting volume, risk appetite, win-loss ratio, remaining chips, past dishonest behavior and net worth.

Operators themselves are wrestling with the implications of this advanced surveillance. In their discussions on whether to proceed with implementing the technology, senior members of management at Galaxy Entertainment voiced concerns at an internal meeting that high-spending customers probably wouldn’t want to be watched, said a person familiar with the matter.

They were also concerned that government and law enforcement authorities may want access to the collected data, the person said.

A representative for Galaxy Entertainment didn’t respond to calls and emails requesting comment.

The speed with which Macau casinos are racing to implement the new technology speaks to a greater ease with data collection and sharing among Chinese consumers compared with those in Europe or the U.S.

Chinese tech companies are at the global forefront of using consumer data for purposes as diverse as designing new products and expanding health insurance. China’s government also has a nationwide network of surveillance cameras that utilize facial recognition.

“This new technology certainly has the potential to infringe the law as it expands the scope of players whose breadth and range of activities would now be tracked,” said Ben Lee, a Macau-based managing partner at Asian gaming consultancy IGamiX. He said sending collected data to casino company offices offshore for analysis could break the law.

Suncity’s Lo said consumers are used to being tracked. “I think customers expect that their bets are being watched, it’s just whether the casino operator knows how to make use of the data,” he said.

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“Facial recognition is very mature in China: Border customs has it, banks will soon have it, it’s a trend,” Lo said. “If you’re afraid of this, then you’re very likely a criminal and casinos won’t do business with you anyway.”


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