I'll always admit when I'm wrong. I was wrong. All this time I believed casinos were more interested in RFID-embedded chips to combat counterfeiting, then the marketing data they could collect.
Lakes Entertainment, which owns a 61% stake in World Poker Tour (WPT), develops and manages casinos. The Minneapolis-based company has agreements to manage casino operations for four Indian tribes. The casinos are in Michigan, California and Oklahoma at five separate sites.
I had a chance to speak with Lyle Berman, Lakes Entertainment chairman and CEO, on Tuesday at the Roth Capital Partners 20th Annual OC Growth Stock Conference at the Ritz Carlton Laguna Niguel, Dana Point, Calif. He says using RFID-embedded poker chips to prevent people from cheating and counterfeiting is a byproduct. Casinos really want the marketing data collected from the chip.
That marketing data provides invaluable information, so marketers can target consumers with coupons and specials. Not only related to the casino, but surrounding businesses. Let's say a gambler goes into a casino one day a week to play card or the slot machines. If he spends $5,000 in that day, Lakes Entertainment considers him about a $350-per-day customer. They'll market to him based on a seven-day average. "I might send you a coupon for $100 that you can spend next Tuesday in the casino, so I'm giving you back a percentage back," Berman says.
Another reason for using an RFID-embedded poker chip, Berman says casino supervisors spend too much time trying to track players, but the data gathered from the RFID poker chips, such as how good the customer plays and how much he bets, becomes too valuable to let ignore.
"Player tracking is the main value you get from RFID poker chips, and all the rest is value add," he says. "In all the years I've run casinos I have never seen a counterfeit poker chip."
The Lakes casino in Michigan began testing RFID poker chips six months ago when it opened, but Berman says he's not convinced the technology works. And, the chips are expensive. Regular poker chips cost between 10 cents and 25 cents to replace vs. $1 for those with RFID-embedded tags.