American Executive - Where Business Leadership Begins

The gaming industry is in full swing thanks to destinations such as Las Vegas and Atlantic City. In fact, expansion is continuing around the world, according to Kirk Sanford, CEO and president of Global Cash Access, Inc. And when gamers spend hundreds of millions of dollars a day, Global Cash Access becomes the beneficiary.

Seventy percent of a casino’s gaming revenue comes from companies like Global Cash Access. The $1.1 billion company provides a full suite of products and services to casinos around the world to deliver cash access services to gaming patrons. It’s the marketshare leader in the US, Canada, the Caribbean, the UK, Switzerland, and Belgium, and it’s aggressively working to expand into Macau, Russia, and France. Some of its clients include MGM Mirage, Harrah’s, and Trump Casinos.

“We’re the only full-service provider that enables patrons to get cash at a casino for their gaming entertainment,” Sanford said, who has led the company since its inception in 1995. “We give them access to cash when the money in their pockets has run out.”

There’s a variety of ways the company provides that service, ranging from ATMs to credit-card cash advances to money transfers. GCA owns the gaming industry’s only credit bureau used by casinos to underwrite gaming credit. “A number of the large casinos extend casino credit to patrons and use our database to make those granting decisions,” Sanford said.

Cashless gaming
Cash access services drive such large percentage of a casino’s revenue, when a casino is selecting a company to partner with to outsource that service, it becomes mission critical. Sanford assures potential customers that GCA’s services will provide them a better patron gaming experience and create operational efficiency through innovation for their enterprise.

Sanford is noticing a trend in the industry: cashless gaming. Several years ago, slot machine gamers used to hit the cash-out button when they were finished playing, and coins would drop into a bucket. That no longer happens. Today, when the patron hits the cash-out button, a bar-coded ticket for the value of his/her winnings is presented, and the ticket gets redeemed for cash.

“We’re taking advantage of this evolutionary change, and we’re allowing patrons to use debit cards at slot machines,” said Sanford. “There are about 700,000 slot machines in North America. If you look back a few decades, people said no one would want a bill acceptor on a slot machine; they only wanted coin acceptors. But today, there’s not a slot machine that isn’t a bill acceptor.”

Giving credit when it’s due
To take advantage of the industry shift, GCA is launching a credit card called Arriva that will serve the gaming industry. The card will enable gamers to access more cash in the casino, earn points that can be used for room discounts, and get VIP access to nightclubs and restaurants.

Arriva will address a fundamental problem with credit card use at casinos. “Today, a large percentage of credit card attempts are turned down in casinos, not because the gamer isn’t credit worthy, but because the cash advance limit on the credit card is low in a gaming industry environment,” Sanford explained.

“Because 80% of our transactions are repeat customers who we’ve been dealing with for years, we have a good understanding of their credit history,” said the CEO. “In my opinion, the source of the payment is the same, whether a person is buying a plasma television at Best Buy or taking out a cash advance in a casino.”

The card will enable GCA to save millions of dollars a year in interchanges, a fee that GCA pays back to customers’ banks. “If a customer uses a credit card at our terminals, we have to pay their bank a large percentage,” Sanford said.

With the Arriva card, that transaction would be on GCA, getting rid of the interchange fees altogether. “This enables more economics to share between us and the cardholder,” Sanford said. “We pay about $90 million in interchange fees a year, so this will save us a significant amount.” The card should be available in the first quarter of 2006.

Positive changes
Sanford made the decision several years ago to revamp GCA’s entire IT system. “We have about a dozen products and services, and each system ran on disparate hardware and software,” he said. GCA developed a system that enables all the services to be delivered through one platform.

This gave GCA several advantages: quicker time to market with new products and faster transactions for casino operators to help meet the various compliance-reporting requirements by gaming regulators. In addition, it enables GCA to rapidly expand internationally without having to build data centers and systems abroad.

The IT upgrade, factored in with GCA’s innovative products, sets the stage for continued growth. Business has been nothing less than solid; the company renews about 97% of all contracts, and it captures two-thirds of competitors’ businesses that are up for bid. “As long as the industry performs well, our base business will continue to succeed,” Sanford said.