Alliance Gaming to Demonstrate New Gaming System at New Orleans On-Line Gaming Conference

23 October 1998

Interactive Gaming News recently got a preview of the new technology developed by Bally Gaming to offer closed loop, subscriber-based wagering via computer. It was developed in compliance with Nevada's new regulations about internet gaming.

The system has field tests being instituted soon via the Hilton Hotel and Casino sportsbook in Las Vegas. The roll out of the product could come prior to the end of the year.

The system requires that a patron enter the sportsbook to eestablish a wagering account (a method which ensures that the patron is an adult). Then they can continue to wager from their home computer with the help of smart cards. To cash out their account, they must return to the sportsbook. Nevada regulations which are being finalized now, require that this is restricted to people residing within the state.

Alliance Gaming Corporation, which owns the Bally Gaming and Systems business unit, will introduce a new network architecture and on-line game delivery system at the Gaming Online Conference in New Orleans on October 29, 1998.

One of the critical issues is to verify that the computer access is restricted to the state. Bally's Remote Access Verification Environment (RAVE) technology provides the geographic call origination verification of its PC users and is designed to comply with current and proposed Nevada legislation regarding on-line gaming.

Tony Fontaine, Vice President for Applied Technology, heads up the group working on this project. He said, "Bally Gaming is the first company in the United States to offer an online gaming product that provides gaming regulators assurance that the online gaming activity originates from within their jurisdiction. The RAVE technology is provided through a proprietary intranet whose dial-up access is restricted to subscribers and is not available to non-subscribers such as Internet users."

According to Bally's, they incorporated highly sophisticated call tracing and security measures developed in conjunction with KPMG Peat Marwick LLP and Bellcore. Additional levels of security are achieved through sophisticated encryption techniques and the use of smart cards to identify and authenticate users.

"The key is to provide an effective mechanism to ensure regulatory concerns and jurisdictional boundaries are respected" stated Morry Goldstein, President and CEO of Alliance Gaming. "Only companies licensed by the appropriate gaming authorities will be allowed to license the RAVE technology, and only for approved applications."

Bally's officials further noted that strict enforcement will be a key component to ensure that only authorized users within an approved gaming jurisdiction will have access to the system. Access restrictions imposed by the RAVE technology offer a much greater degree of consumer protection than unregulated Internet gambling.

Fontaine noted that, in addition to the sportsbook application, the system was perfect for account wagering for parimutuel systems.

Interestingly enough, the business model that this system is using in the sportsbooks are not the one you might expect. While other suppliers looking to get into the business may ask for a percentage of the juice from the sportsbook (who have a spare amount to work with to begin with), this model looks at the revenues from ancillary services, available to the account holders through its SportsMaker system.

This system is designed to interface with sports wagering systems via a set of standard application program interfaces. SportsMaker provides a user-friendly interface with complete database collection and warehousing capability for target marketing, advertising and merchandising.

Watch for this system to make some waves as they launch later this year. It's certainly been an educational process for the regulators to determine the finer points of this new medium.

Headquartered in Las Vegas, Nevada, Bally Gaming and Systems., is a leading designer and manufacturer of reel-spinning slot machines, video gaming devices and slot information systems. The company is a wholly owned subsidiary of Alliance Gaming Corporation, a diversified gaming company that also operates two regional casinos and is the nation's largest gaming machine route operator.

See companion story about Nevada Gaming Control Board hearing on internet gaming regulations.

Related Links
The Gaming Online '98 Summit