Industry set to retool slots to accept newly designed bills

David Strow

Thursday, Dec. 9, 1999 | 11:19 a.m.

For the fourth time in four years the gaming industry is preparing for yet another redesign of U.S. currency -- but this time, most are expecting a smooth transition.

The Treasury Department on Nov. 16 unveiled new designs for the $5 and $10 bills, similar in fashion to previous redesigns of the $20, $50 and $100.

The Treasury said the bills should enter circulation in the middle of 2000, but has yet to identify a specific release date. The bills will be introduced simultaneously.

That will mean, once again, that Nevada's 206,000 slot and video poker machines will need to be fixed to accept the new currency. But gaming industry officials say it's not as difficult a task as one might assume.

"This is becoming pretty routine, because we've gone over this four times," said Ed Rogich, director of marketing for International Game Technology of Reno, the largest manufacturer of slot machines. "The first time was a little traumatic, but it wasn't a problem. Now, it's become a relatively simple changeover that we plan for."

In order to accept the new currency, the bill acceptors in slot machines need new data for their software programs that will recognize the new designs. Writing that software is primarily the job of Las Vegas-based JCM American Inc., the industry's largest manufacturer of bill acceptors.

Gwen Mathis, marketing manager for JCM, said her company has been in touch with the Treasury Department for more than a year preparing for the new currency. The company is currently writing new software code based on design information provided by the federal government.

"We've been doing this since 1955, working with new currencies all over the world," Mathis said. "So it's not something new for us."

JCM's goal is to have new software complete about 60 days before the release of the new notes. The data for the new bills will then be provided to slot manufacturers using JCM's bill acceptors.

The state Gaming Control Board must approve the new software and it will then be installed into each slot machine with a bill acceptor. JCM will charge a minimal fee for a master copy of the software update for each property, such as $50 for a master chip, Mathis said.

Most slot operators decide to handle the actual installation process themselves. "A property is very protective of their own equipment, as they should be," Mathis said.

One property that will handle the process internally is Mirage Resorts Inc.

"The cost will be significant as a stand-alone number, but as a percentage of revenue, it won't be," said Mirage spokesman Alan Feldman.

Most of the cost, Feldman said, will be associated with the labor cost of putting Mirage slot technicians on the floor to change the software on each device, though he couldn't estimate what those costs might be.

The actual changeout varies by machine. In some cases, the software can be directly downloaded into the machine, so there's no direct cost to the company other than buying a master copy of the update. In other cases, new chips must be created for each machine. That typically costs about $5 to $10 per chip, Mathis said.

In a few cases, Feldman said, the machine's entire bill validator must be changed, at a cost of $400 a machine. This was required for a significant number of Mirage's older machines during the first currency change, the 1996 redesign of the $100 bill. But since most machines have already had their validators changed in the past, very few Mirage machines will have to have their validators replaced, Feldman said.

"It's very machine-to-machine," Feldman said. "But in any event, the changeover only takes about 10 minutes."

Still, it's a cost that Mirage views as vital to its business. Feldman recalled his annoyance recently in dealing with a copy machine with a validator that wouldn't accept the redesigned $20.

"There's a potential for lost revenue from inconvenience," Feldman said. "You're always trying to make sure the guest experience is as convenient as possible. It's one of those things we have to do, no matter what."

IGT, which uses JCM validators in virtually all of its machines, will change out all of the software on its machines at an operator's request, charging its typical hourly maintenance fee of $75 per hour, Rogich said. All revenue participation machines and leased machines, such as Megabucks, are changed at no cost to the operator, Rogich said.

The Treasury Department says it's still undecided whether or not the $1 bill will be redesigned. But the process will undoubtedly occur again -- whenever a new counterfeit design is discovered, JCM will release a new software update that will be able to recognize it.

Besides, the reason behind the redesigns -- changing the look of currency to keep ahead of counterfeiters -- will always remain an issue for the U.S. government, Mathis said.

"(Currency design) hadn't been changed since they instituted the Secret Service (in the early 1900s)," Mathis said. "We know that leaving our currency the same for an inordinate amount of time made us a mark for counterfeiters. That's why they know these changes are necessary to stay ahead of people who are trying to foil the system.

"Don't expect that this will be the last time around."