Gaming industry retooling slots to accept new $20 bills

A newly designed $20 bill hits the streets Sept. 24, and gaming machine operators are busy installing new chips and software that will let their machines recognize the upgraded greenbacks.

Each chip takes about five minutes to install and the cost of the chip change appears to often fall on a machine's operator or owner. Depending on a casino or operator's agreement with their machine supplier, some apparently have to pay, while others get a free upgrade.

For instance, Boyd Gaming Corp. spokesman Rob Stillwell estimates the cost of upgrading Boyd's 17,000 machines nationwide at about $5 a machine, or $85,000.

"It's a minimal expense and it's one we don't mind paying at all given the extra security," said Stillwell.

But Mary Winter, a spokeswoman for Santa Fe Gaming, said the 2,685 machines at the company's two casinos will receive free upgrades.

The chips and their accompanying software have been designed by bill acceptance manufacturers in close consultation with the U.S. Treasury Department, and have been approved by state gaming regulators.

"A new chip has been approved that will allow you to change the chip in the slot machine, and it'll accept the new $20 bill," said Randy Adams, head of game development for Anchor Gaming.

A small number of machines manufactured by industry leader International Game Technology can be upgraded with a software download, a faster, cheaper method, said Ray Frey, lead senior bench technician with IGT. But most machines will need a new chip, he said.

The $20 bill has been redesigned to make counterfeiting harder, and to make the bill easier to identify.

The new design was announced in May, and bill acceptor manufacturers were given a rare opportunity to preview the new bills.

"This year the Treasury Department did something very unusual," said Gwen Mathis, marketing manager at JCM American Corp., the largest manufacturer of bill acceptors for the gaming industry. "They allowed some pre-billing of the new bill. ... They were very cooperative and as helpful as could be."

JCM and other manufacturers travelled to Washington where they previewed and tested prototypes of the new bills. Once sure their chips would recognize the new bills, JCM turned the software over to gaming machine manufacturers, who submitted newly upgraded machines to the Nevada Gaming Control Board for approval.

The chips are easy to install. But there are no short-cuts; every machine has to be upgraded.

"They have to visit every machine and change a chip" said Dick Sadler, vice president of engineering at machine manufacturer International Game Technology.

And it's not just gaming machines that need a new chip. Anything that accepts or dispenses bills, including casino cash counting machines and ATM machines, needs the chip, he said.

"There's a lot of machinery out there that counts currency," Sadler said.

Though JCM supplies the chips to machine manufacturers for free, most manufacturers sell them to their customers, said JCM's Mathis. For instance, Bally Gaming's basic chip costs $25. Volume discounts can reduce that amount by half. But casinos can cut costs further by buying a single chip and duplicating its software themselves, said Sadler.

This is the third time a domestic currency change has forced machine operators to change their chips. New chips were installed when the $100 bill was issued in March 1996, and when the $50 bill was issued in October 1997. And each time another bill is issued, operators will have to change the chips again.

"We have to change the chip every time they come out with a new bill," said Ray Heidel, engineering vice president at Bally Gaming.

When new bills are introduced in the future, bill acceptance manufacturers will again have to travel to Washington, study prototypes, and design software to recognize the new currency. The new bills cannot be programmed into the current chips because their designs have not yet been finalized, said JCM's Mathis. The Treasury Department has said it will issue new bills no more frequently than every nine months, Mathis said.

Bally's Heidel noted that most machine manufacturers also have operations in foreign countries where currencies are changed far more regularly than in the United States. Heidel said he has two 300-page books filled with samples of foreign currencies.

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