The house always wins — and now it has artificial intelligence (AI) on its side.
Some of the world’s biggest casino operators in Macau, 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 that 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.
This embrace of high-tech surveillance comes as casino operators jostle for growth in a slowing industry that is under pressure globally from economic headwinds 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, people familiar with the matter said, adding that Sands plans to extend them to more than 1,000 additional tables.
Three others, Wynn Macau, Galaxy Entertainment Group and Melco Resorts & Entertainment, are also in discussion with suppliers about deploying the technology, the people said, on condition of anonymity.
Macau junket operator Suncity Group Holdings, which is building a casino in Vietnam, said that it is planning to deploy a system where radio-frequency identification (RFID) technology — which uses radio frequencies to attach tags to objects — is installed on chips and tables, storing data on players.
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 is the only place in 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 children in tow. The advanced surveillance technologies give casinos a way of easily separating who might become serious gamblers from those just having a fun weekend.
It is not unusual for casinos to have surveillance cameras for security and to detect cheating — with Las Vegas operators utilizing RFID-enabled chips that can be disabled if stolen from a 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, has received approval from the territory’s gaming regulator to deploy the technologies, the people said.
One supplier, Germany-based Dallmeier Electronic, worked with casinos to redesign cameras so that they could be embedded into columns and not be visible to customers, Dallmeier senior enterprise solutions manager EP Smit said.
Representatives for MGM, Galaxy Entertainment, Sands and Wynn did not respond to requests for comment, while a spokesperson for Melco declined to comment on business matters that are not public. Macau’s regulator, the Gaming Inspection and Coordination Bureau, did not respond to e-mails and calls seeking comment.
In a product demonstration at a Macau industry conference by Walker Digital Table Systems — a Las Vegas-based company peddling technology to invisibly track chips, wagers and game outcomes — vice president of Asia operations John Orth assured a potential buyer: “Your customers don’t even realize they are being tracked.”
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 Dallmeier’s system, 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.
“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 junket operator Suncity’s listed arm.
Suncity plans to use Walker Digital’s technology at its new casino in Hoi An, Vietnam.
There are three major companies supplying casino operators with the AI-enabled technology: Walker Digital, Dallmeier and Japan-based Angel Playing Cards.
While the companies differ somewhat in the technology that they offer, the general set-up is that gamblers’ betting behavior is tracked through high-resolution cameras and RFID-enabled poker chips and tables, with the intelligence gleaned flowing back into a centralized database, where a risk profile of the individual is then created.
The system can track individual gamblers down to how often they take “side bets” on a baccarat table — a bet on very unlikely events like a tie, which have higher risks and higher returns. Gamblers who favor side bets can mathematically yield about 10 times the profit for a casino compared with a gambler with an average risk appetite.
The technology can help detect any dealer and player collusion, preventing fraud, as well as doubling as a performance management tool by tracking the speed and accuracy of dealers.
Ultimately, casino operators can rate each player with a combination of metrics that 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, Galaxy Entertainment senior management voiced concerns at an internal meeting that high-spending customers probably would not want to be watched, according to a person familiar with the matter.
They were also concerned that government and law enforcement authorities might want access to data collected, the person said.
A representative for Galaxy Entertainment did not respond to calls and e-mails requesting comment.
The speed with which Macau-based 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 US.
Chinese tech companies are at the global forefront of using consumer data for everything from designing new products to expanding health insurance. The Chinese 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 (李忠良), a Macau-based managing partner at Asian gaming consultancy IGamiX.
Sending collected data to casino company offices offshore for analysis could be breaking the law, he added.
Consumers are used to being tracked, Lo said.
“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 added.
“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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