Las Vegas Business Press :: News : Casinos look beyond bank ATMs

Casinos look beyond bank ATMs

By VALERIE MILLER
BUSINESS PRESS

With banks taking a renewed interest in off-site automated teller locations, it would seem only natural that casinos would be prime targets. The opposite is true in Las Vegas though, as traditional financial institutions abandon their ATMs on the gaming floor.

A winner in this trend has been Las Vegas-based Global Cash Access, a provider of cash access products including ATMs. The publicly traded company picked up Bank of America's and Wells Fargo's ATM gaming portfolios and is now reaping the rewards from high casino traffic. The company now has 400 ATMs in Las Vegas casinos and 1,200 nationwide. Local clients include Harrah's Entertainment and Caesars Entertainment (which merged earlier this year), Mandalay Bay Resorts and Boyd Gaming.

"We are really good at what we do because we are a technological innovator," said Global Cash Access Senior Vice President of Sales Diran Kludjian. "Generally, the bank doesn't want to spend the financial reserves to develop ATMs for a myriad of different industries."

Global Cash Access Senior Vice President of Sales Diran Kludjian demonstrates the company's new ATM for casinos. Banks have been reluctant to install branded ATMs in gambling halls and Kludjian's company has filled the gap and improved the technology, the executive says.

Global Cash Access, in which Bank of America has a 5 percent ownership stake, prides itself on its "three-in-one machines." If a casino patron is denied by their bank (through the ATM) because they have exceeded their limit, have insufficient funds or have entered an invalid pin number, the cash access company tries to secure them money to gamble through a point-of-sale debit or a credit card cash advance.

"Generally, if somebody's limit is $300, you can get three to five times that much in a point-of-sale debit transaction," explained Kludjian. "As the casino's goal is to get as much money to the player for as long as possible. Anyway we can get them more funds, everybody wins."

Well, maybe not everybody, countered UNLV professor Bill Thompson who studies gaming.

"I'm against any machine that allows you to go into debt to a casino. When a casino gives you credit, it checks your background to see if you are good for it. A machine doesn't," he said.

Thompson believes owners of casino ATMs should be required to be approved by the Nevada Gaming Control Board. Currently, they are not, nor are they required to seek approval with the state Financial Institutions Division.

The long-time professor of public administration is also skeptical as to why banks would get out of such a lucrative business.

"I don't think they want to be associated with compulsive gamblers, so they want to be three steps away, but they are still getting their 75 cents," Thompson maintained, alluding to the profit that comes to the bank when customer's pay the foreign ATM fee.

Bank of America Nevada President George Smith denied that image had anything to do with the bank's exodus from the casino ATM field.

"The industry was evolving into other things from the ATMs we knew, like cash advances, which we weren't doing. That was a big component," he explained. "So, instead of putting in all that technology for a small part of our business, we sold it."

Global Cash Advance is happy to develop the technology. It is partnering with IGT to develop a machine, dubbed "Todd and Edith," that is attached to a slot bank and accepts debit cards for play.

"I think over time, there will be less ATMs in casinos as those technologies are switched to 'ticket-in, ticket-out,'" Kludjian predicted.

The casinos will get a healthy cut of the machines' current $3 to $4 per transaction surcharge, although Global Cash Access wouldn't disclose exactly how much.

UNLV's Thompson takes exception to that.

"If you take out $100, the casino will probably get that and most of the surcharge, too," he said.

vmiller@lvpress.com | 702-871-6780 x331

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