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					                                        Casinos Bet on CCTV and Win
                                                              by Robin Gray
                                                        Published September, 2003
Gaming establishments all across the nation now realize that the latest surveillance technology
can protect them against customer cheating, employee misconduct and fraudulent claims
better than ever before. As a result, many have already adopted or are seriously considering
state-of-the-art digital CCTV equipment.

Dennis McAndrew (a.k.a. Dennis Nikrasch) was a cheater who used a concealed hand-held device to
program slot machines for his own financial advantage. His scams netted him $16 million before he
was caught and sentenced to 71/2 years in prison. Although McAndrew's case is unusual because of
its size and sophistication (his scam was one of the biggest in Nevada history), it highlights the challenges casino surveillance
directors must face. Fortunately, the typical casino criminal is less creative and sticks to tried and true ways of cheating, such as the
palming of chips, card switching and more.

Although cheaters are a well known threat to casinos, of equal concern to surveillance and security directors is embezzlement by
employees and mid-level and upper management. Fraudulent claims resulting from phony slip and falls and car accidents are other
sources of financial loss (not to mention headache) for gaming properties.

In order to stem the tide of cheating, internal losses and fraudulent claims, casinos are taking CCTV technology to the next level.
Cameras now monitor escalators, elevators, retail stores and hallways, in addition to gaming areas. Increasingly, the goal of a casino is
maximum camera coverage for the entire property (with the exception of restrooms). Surveillance systems already installed in the
gaming areas are being upgraded as well.

Another trend is a general shift toward more asset protection. Surveillance is now used to monitor both front and back house
operations.

This change is happening because multiple applications for CCTV by a single property improve its return on investment (ROI). Like
with any other business, when more departments can partake in the benefits of a system, it is easier to justify the cost of the
technology.

Indeed, casino management now recognizes how the integration of surveillance, security, human resources, risk management and loss
prevention, with the help of the latest CCTV systems, can reduce operating costs and losses. And with new casinos being opened
every year, particularly in the Indian gaming market, the opportunities for integrators in this industry are limited only by their
ambition, skill and connections.

Regulations Vary From State to State, Tribe to Tribe
Casinos can be grouped into three loosely defined categories: major casinos like those found in Las Vegas and Atlantic City; smaller
market casinos, including some riverboat establishments; and native American casinos, which run the gamut in size from small (30 to
50 cameras per facility) to huge, like Foxwoods in Connecticut. Although there are some similarities within these categories, each
property has its own internal guidelines, applicable state regulations and management style.

Some of the larger locations, such as Atlantic City and Foxwoods, are heavily regulated. In other states, such as Nevada, regulations
are less strict. Generally speaking, most gaming commission regulations do not specify the type of CCTV technology casinos must
use, although many have developed or are in the process of developing guidelines for digital equipment.

Gaming Corporations, Consultants Dominate Majors
Most large properties, like the ones in Las Vegas and Atlantic City, are owned by corporations such as Boyd or MGM/Mirage. In
these cases, an integrator normally would be hired to install the CCTV systems if the property were new or if a large portion of it were
being expanded. Additionally, the majors will most likely work with a consultant and specify a more comprehensive system that
encompasses security, loss prevention and risk management. If they are doing simple upgrades or maintenance, the larger casinos have
on-sight personnel do the work.

Like the large gaming arena, the smaller markets are regulated to varying degrees. Interestingly, some of them, like Illinois or New
Orleans, have even tougher standards. If the casinos are small enough and new, they may turn to local integrators for design and
installation of their security systems.

Close cousins to smaller markets are tribal-owned casinos. Some are small in size and may depend on local integrators for their initial

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CCTV installations or major upgrades. Despite this, Native American casinos cannot be too narrowly defined because they come in a
wide variety of sizes and have differing management philosophies. As of 2002, there were 201 tribal governments controlling 321
Native American casinos in this robust segment of the market.

The level of regulation affecting CCTV surveillance varies, depending on the tribe. The regulations affecting many tribal-owned
properties are rather lenient by some standards, but it does not mean the systems installed are any less effective. Instead, more relaxed
standards give the surveillance director and integrator flexibility to install cameras, DVRs, VCRs, local area networks (LANs) and
switchers only where they are needed and economically viable.

Many Commissions Prefer DVRs, But Admissibility Still Unknown
The federal minimum internal control standards (MICS) are applicable to tribal gaming and specify that the minimum recording speed
of a surveillance system should be 20 frames per second (FPS). Also, the image quality should be of sufficient clarity. Besides these
MICs, however, the type of surveillance technology used by casinos is not specified by regulations.

Instead, many gaming commissions are learning to appreciate digital technology, particularly DVRs. Gaming boards generally are
impressed with the fast rate of speed at which events recorded on a DVR can be located. This makes the jobs of enforcement officials
easier.

One nagging concern some commissions have about DVR images, however, is the uncertainty about their admissibility in court.
Fortunately, most DVRs have some form of watermarking technology that ensures the recordings are original. Still, there have been
no court cases formally declaring the technology will withstand a legal challenge. Despite this, there is a consensus in the industry and
among gaming boards that DVR evidence will be admissible when tested.

CCTV Systems Keep Customers, Employees Honest
Whatever equipment a jurisdiction allows, all regulatory boards have the same goals: to ensure the integrity of the game and revenue
reporting process. Gaming commissions want to read the cards and denominations of chips, as well as watch the play and money drop.
Past posting, 10-percenting, sliding dice and a player putting extra chips on a winning roulette number are some of the many other
illicit activities often captured by CCTV systems.

Patron misconduct, however, isn't the only threat to casinos. Approximately 50 percent of a property's losses can be attributed to
internal theft by employees and collusion between casino employees and outsiders. The cash-handling positions are particularly
susceptible to internal crime. Other employee wrongdoings often uncovered by cameras include the watering down of drinks, drinking
on the job, drug use, loitering and embezzlement by midlevel and even upper management.

Space, Storage and Speed Make DVRs More Attractive
In order to keep better track of this illegal activity, many casinos are gradually adopting DVRs. Unfortunately, the biggest hurdle to
widespread adoption of DVRs is price. Despite the cost issues, many casino surveillance directors understand they will eventually
need to adopt digital technology because of its overwhelming advantages, such as minimal maintenance.

Another advantage DVRs have over VCRs is the fact that tape storage is eliminated. This factor is one of the primary reasons so many
surveillance directors switch to digital. Also, the size of the actual units may be smaller than VCRs. For example, recently at Harrahs
Ak-Chin Casino Resort in Maricopa, Ariz., Sanyo units were installed in the casino's expansion because two of the Sanyo DVRs fit in
the footprint of one VCR. Harrahs chose the Sanyo product because the casino could add on units at a piece-meal rate, rather than all
at once.

Casinos Don't Want to Search Through Hours of VCR Tapes
Locating a recorded event quickly is another important DVR plus. With valet parking, for example, casinos often get claims about
damaged cars and require some method of proving or disproving prior vehicle damage. With a DVR, management can quickly play
back video of when the car in question entered to determine if the person is making a false claim or not.

Some Technology Remains Virtually Unchanged
Although DVRs are relatively new to the casino market, other aspects remain remarkably constant.

Cameras, for the most part, are still analog and the same matrix switchers that have been available for the past several years are still
being used. Some gaming institutions, however, are adopting Cat-5 cabling/LANs as opposed to traditional coax or fiber-optic cable.
Presently, either type of system will support the new CCTV products coming on the market, which many believe will migrate from
being completely analog to analog/digital hybrids. There are some manufacturers out there, however, that are providing solutions that
can be completely digital.

JDS Digital Security Systems of New Baltimore, Mich., offers a network video recorder (NVR) that allows the grouping of multiple
cameras and then connects them to a single cable run back to the NVR. At press time, this technology was being tested by the Bellagio
in Las Vegas.

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According to Joe Marchese, president of JDS, “If a manufacturer comes out with a 1 million by 1 million pixel cameras, we’re already
compatible with it.” Until the time comes when or if such cameras are produced, the JDS product is also compatible with most CCTV
systems currently available.


Proper Cameras, Placement Prevent Lighting Problems
When it comes to cameras, most casinos must contend with hot spots, glare and flashing lights, all of which can cause overexposure or
underexposure. Harrahs Ak-Chin management likes the Sanyo cube cameras for these types of conditions. The Panasonic dome
camera system (WV-CS854) is another option for severely contrasting lighting conditions.

Camera placement can also resolve some lighting problems. For example, a camera shooting straight down may get a reflection off a
card. In addition, this camera view will not allow the operator to see how many chips are in a stack. A better option might be to cover
the gaming table in a cross-firing configuration. This position also offers better views of players' and dealers' faces.

Cage areas, where money transactions take place, require some of the most extensive coverage, including facial shots. Coverage of
slots is also key, especially considering the fact that 70 percent to 80 percent of a gaming area's revenues and 60 percent of a casino's
crime happens in those areas. Pickpockets can be particularly problematic in slot areas.

The biggest concern most security directors have right now, however, does not involve customer crime. It involves internal losses and
collusion. That is why cameras must show the faces of customers and employees. Covert and wireless cameras are another good
option and many casino surveillance directors are asking for these products.

Another great reason for choosing covert cameras is aesthetics. Even if internal losses aren't a concern, patrons don't want to be
reminded that they are being watched. If a camera can be cleverly disguised, or at the very least be unobtrusive, then customers remain
content. Attractive appearance is particularly important in elevators with expensive cabs.

Boats, Older Facilities Sometimes Experience Power Problems
Camera selection, lighting and placement in casinos can be daunting tasks on their own, yet when there are severe power problems,
like those experienced in older facilities or on gaming boats, ghosting can be an issue. An uninterruptible power supply (UPS) should
eliminate spikes if it is regularly maintained and the lines are regularly conditioned.

Although there is no way to eliminate the need for power and casinos have been forced to find innovative ways of solving these issues,
other supplemental, noncritical technologies, such as facial recognition, have not worked out as well as many had anticipated. Facial
recognition is still experiencing a lot of bugs and is too expensive for many casinos to adopt at the present time.

Automation, too, has not performed as well as expected. For example, with cameras that interfaced with the slot data systems, when
there was a jackpot on a certain machine, a dome camera would turn around and target the winning machine. Unfortunately, if that
same camera were being used by a surveillance operator who was following a pickpocket, the automatic system would pull control
from the operator, thus foiling his or her pursuit of the suspect. Because of incidents like these, many gaming establishments are
phasing out or modifying their automation systems.

Other Casino Departments Play an Important Role in Security
Despite the challenges involved with biometrics and automation, casinos are relying on other technologies and aggressive accounting
practices used in conjunction with CCTV to reduce losses and improve productivity. Spread sheets from table games can pinpoint
profitability exceptions that tell security directors where to look. The same approach can also be used in casino retail stores and
restaurants, resulting in hefty savings. In one case, a CCTV system caught a waitress who casino management determined was
responsible for losses of $200 to $300 per day for eight years (approximately $400,000).

Casinos Coming Out of a Slump, Greater Opportunities Ahead
Losses like these make compelling cases for digital CCTV system upgrades. In the past few years, however, the casino market has
been affected by the current economic slump. The recession has made security directors and integrators work harder for every
upgrade.

The gaming industry, however, seems to be coming out of a slump. According to Dore, "Right now things are starting to turn around
and we're getting a lot of calls. People are trying to plan their capital budgets for 2004. The majority of the time the call is, 'Can you
come out, evaluate our system and talk digital with us?'"

The web version of this document can be found at http://www.securitysales.com/t_ci_articleView.cfm?aid=1312&sid=2

                               Original full text versions can be ordered from www.securitysales.com




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