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Wagering on the 3-D slot

PureDepth is rolling out a video display that could transform the one-armed bandit.

March 19, 2007|Rachel Konrad | The Associated Press

REDWOOD SHORES, CALIF. — Engineers at PureDepth Inc. spent years developing tools to help the military plot 3-D maps of war zones, eventually licensing top-secret technology to the U.S. Air Force and Navy.

But the Silicon Valley start-up hit the jackpot in October when it inked a deal with International Game Technology Inc., the largest maker of slot machines.

Industry experts say a realistic digital video display is the final hurdle that will completely digitize one-armed bandits. The displays by PureDepth and others -- set to debut this year -- could profoundly change the $85-billion U.S. gambling industry and how it is regulated.

When high-tech slots are in place, programmers will be able to control nearly every aspect of the game -- cost, payout, even the images that appear on the pay line. Casino operators will be able to make changes in real time through back-end servers that talk to computer chips inside the slot machines.

"This is the last piece of the puzzle," said analyst Aimee Marcel Remey, who follows the gaming industry for Jefferies & Co. "These new systems are so different from the slots out there now. You feel like it's an exact science, every time you pull."

If the Beach Boys are playing the Luxor in Las Vegas, next-generation slots could display images of band members instead of cherries, numbers or other symbols. If band members' faces line up, an embedded printer could spit out front-row tickets.

Or suppose the penny slots area at a tribal casino empties out around 7 p.m., when big spenders arrive. With a few keystrokes, programmers could change the minimum bet to $1 and offer a progressive jackpot with all slots in the house -- or even with thousands of machines statewide.

"If the NASCAR folks are coming to Vegas, they could change the fruits to cars," said Fred Angelopoulos, chief executive of Redwood Shores-based PureDepth, founded in 1999. "You can start thinking outside the box, literally."

Digital slots, however, are vulnerable to the same bugs and malfunctions that plague personal computers. Regulators say they'll be seductive targets for hackers.

In 2000, a programmer in Edmonton, Canada, found a software glitch that let him regularly win $500 or more on some video poker machines. The maker of the machines -- WMS Industries Inc. of Waukegan, Ill. -- estimated that the incident cost at least $1 million and sued the man, who threatened to publish the flaw online.

The Nevada Gaming Control Board, which sets the pace for regulators nationwide, adopted new rules last year for digital machines. The board must approve all software modifications -- even pictures on reels. Approval takes as long as 30 days.

The board employs 11 experts in computer science, electronic security and wireless networking. It will double the number of those specialists by late 2007 and build a research facility to deal with an expected profusion of digital slot machines, said Mark Clayton, who heads the board's technology division.

Executives at the top three manufacturers are reluctant to call networked slot machines hack-proof for fear of inviting challenges from would-be invaders. They're working with regulators to reduce the potential damage of such an attack.

About half the 835,000 slot machines nationwide have video displays and many are networked, but industry officials acknowledge that most are flops, lacking the visceral "clunk-clunk-clunk" of wheels hitting the pay line.

With the cost of liquid crystal displays dropping, engineers at PureDepth's lab in New Zealand decided to house two or more LCDs in one physical unit to create the illusion of depth -- a deceptively simple idea protected with 45 patents and with about 70 patents pending.

Reno-based IGT is hoping to launch the first machines with PureDepth's video display in November at the Global Gaming Expo in Las Vegas.

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