You sit down at a slot machine and insert your crisp $20 bill and begin to play. You may lose, you may win, but you will never get that same $20 bill back out of the machine. Ever wonder where it goes? We did too! Craig Shacklett, URComped CEO, interviews Wanor Franca from Casino Cash Trac to learn more about where your dollar goes and some of the software used for tracking it
This interview takes viewers behind the scenes on what happens to cash once it leaves a player’s wallet.
Full transcript below
Craig Shacklett: Hi everybody, Craig from URComped here. I’ve got a special guest, Wanor Franca, with Casino Cash Trac. They do some really interesting technology. As you guys know, I like to geek out on what goes on behind the scenes and I hope you guys like getting a glimpse into that as well. So some really cool technology, but I don’t think I would do it justice so… Wanor, welcome and why don’t you tell us a little bit about Casino Cash Trac and what you guys do?
Wanor Franca: Well, thanks, Craig, and thanks to you and your team for this opportunity. We’re here in Tulsa, Oklahoma. And it’s a crazy story. A couple guys started this software company in a house. So you know, it wasn’t a garage like Bill Gates, but maybe one day we can have our story like Microsoft. But we have our co-founders, Kurt Williams, and one of his best friends, Drew Ward, they were in operations running casinos and found a need, a very specific niche, around cash management. They have an accounting background, and they said “there’s no way for us to come and audit a casino and play the role of a CFO, if we can see our data. We can see our cash on a daily basis.” You’d be surprised to hear that 9 out of 10 casinos are using paper or Excel spreadsheets. It’s insane, right? I mean, when you think about the MGM ‘s of the world, the Caesars of the world, the Venetians of the world, and then Winstar and Choctaw here in Oklahoma… They were at one time using paper and Excel spreadsheets.
CS: Now, just to help me understand… So I used to work in casinos, at Harrah’s Taho, and one of my great friends Dan ran the accounting room. These guys will be walking around in jumpsuits without pockets, obviously for people to not tuck money in the pockets and walk away. I guess back then, they’re just manually counting the money. Are you saying that what happens is they take the box from the table, it goes into the backroom, they count it manually, and then your product comes in there?
WF : I appreciate that comment because that really hits you know that spot. Soft count is where it all starts, right? So they go to the slots, to the floor, and they get the slot machine boxes and they bring in to count it. Now they’ve evolved. They have a machine that’s counting that money. But then once they count that money, there are a lot of regulations on that money going into actual vaults- just like a bank. Before, they were writing on a piece of paper, “I have $2 million that I’m getting ready to transfer to the vault,” the vault person would come in and count that. He has to do a blind count, because you cannot have anybody telling you how much money is in your count, and then that person would count. If they agree, that person would sign on a piece of paper, and now they’re taking that money into their vault and they would have to recount it again into their vault. That’s where the software comes in. So from the perspective of anytime money comes in or out, we’re now documenting that with our software. We’re replacing all the paper and Excel spreadsheets that they used to track that on. The critical part is that the next morning, you have an entire revenue audit and finance department that has to make sure that nobody’s stealing any money, like you said, putting money into their pockets, whatever they said transfer did transfer in our software. Now, when they come in the next morning, they don’t pull a report from any other system. They start with our report, and they start their day auditing without having to put any manual data entry into an Excel spreadsheet.
CS: Got it! Are there machines that still count the money?
WF: So that money, the physical kind of the money, still happens with machines, and they’ve really done a great job. There are several great companies in the market that produced the counting equipment, both in the cage and in a soft count room. The physical count still exists and it exists at every shift, when people are going home. We’re just there as a software, so instead of them writing on a piece of paper (where somebody can write the wrong number) or putting on an Excel spreadsheet (where somebody can change the formula), we create a software that handles that cash management.
CS: Interesting. So they say cash grows legs. Obviously, in a casino where there’s a ton of cash flowing around, you got to check every spot. So I know this may not be something that your software touches, but let’s say I buy in at a blackjack table, the dealer will put the money into the box. The dealer would say buying in at X amount. The Pit Boss records it. There’s nothing tracking the money that goes in the box though, right? That’s still manually entered by the Pit Boss, correct?
WF: That’s correct. So when the Pit Boss is typing it in, they have a system called CMS. Some of the vendors are Balley, Aristocrat, Konami, and IGT. So they’re tracking players and slots. And so the Pit Boss guy is typing in your current rating and things like that. At the end of the shift, that dealer collects that little box, and they come into an area for employees only, where they have to drop that into the vault as well. That’s where our software comes in. We have a screen for the person that’s working in the vault, to say, “Hey, Craig, you’re my dealer, you’re bringing in the money you collected for the day, I’m gonna drop it.” Now I track that and I can verify against the table winnings to make sure that that dealer wasn’t stealing any money.
CS: Interesting, okay. On the slot machine there’s a little less wiggle room, right? Because every dollar that goes in, that machine’s tracking it and when they pull the box out, it should match up?
WF: That’s the goal. I mean, the complexity around the slot machine has been through some evolution. So it used to be called “hard count room” because the coins actually used to fall. Do you remember going to Vegas and actually having a little bucket with coins? In the late 90’s, that went away. And it was called TITO or ticket in-ticket out. So now instead of you actually getting coin, there’s a little ticket that gets printed that says the amount you’re left with. You can now take that ticket to a kiosk to cash it or you can go to a cage to get somebody to pay you. So the industry is creating this paradigm shift where people keep asking, “Are we still gonna have cash?” Now instead of taking that ticket and going to a kiosk, you can scan it with your phone and upload it to your player profile and store it in your phone’s account with the casino. Now you can go to the slot machine and scan a bar-code on your phone and apply those funds directly to that slot machine.
CS: It’s crazy.
WF: So it’s crazy, right? But for us, the audit never goes away. So when our software was born, Kurt is a CPA, our CEO and co founder, had a mindset of an accountant. So instead of building a software that was cage down to accounting, his mindset always worked debits and credits. So he built a software that goes from accounting to the cage. So every single transaction in and out, it doesn’t matter what system it’s touching, if it’s the vault, if it’s slot machine, if it’s soft count, we have to have the offsetting entry, somewhere. If it’s either a physical entry or if it’s a machine entry, but we have offsetting transactions as a debit and credit. So when the auditors and the finance department go and review that data the next day, then they can easily find and focus on exceptions and fraud.
CS: Got it. So I’d imagine, and I’m sure you can’t say where this happened, but have you had any examples of people installing your software and then right away catching leakage, fraud, or things like that?
WF: I mean, it’s a great question. So we’re currently installed in 170 casinos in 19 states. And we just did a kickoff in Vegas with a very big name there as well, so it’s exciting times for us. We were going live two months ago and surveillance, we work very closely with surveillance, said “Hey, this looks really weird, because we kept seeing this person that worked at the restaurant with some weird behavior.” And we said, “these transactions don’t really add up.” So we talked to surveillance. We had access to the data on the system side. So we caught this person that had been doing this for eight months. This person was going to any customer that paid cash, they would go into the POS system, and void the ticket and keep the cash. You as a customer, you paid cash. Now I’m voiding your ticket. So you left you ate it. You didn’t complain. I kept your cash. Nobody knows that. I track, not only the cash that cashier is moving, but that person sales. So how can that person say that they started with $100. And now they end up with $400 at the end of their shift, but they didn’t book $300 in sales. That’s how I set the traps. And I’m bringing together, in some casinos, three, four, and one of the casinos that has 11 properties, we’re bringing 36 systems together for validation on a daily basis.
CS: So you’re not just tracking table and slot machine money. You’re tracking restaurant, kiosk, and more.
WF: That’s exactly right. You think about the complexity of the casino floor. So the slots and the tables falls into the CMS system. The POS is controlling all the food and beverage. The hotel is controlling the hotels, spas, golf courses, so we call that non-gaming. So it’s really interesting because the Native American world is impressive. I mean, Oklahoma has over 100 casinos, and one of the biggest casinos is on the border with Dallas, close to you. You go to the parking lot and you only see Texas tags. But then you go to Vegas and all the clients from Vegas that are buying our software are coming to Oklahoma to go visit Choctaw Durant, or Chickasaw or Winstar. Because you see the impressive casinos we have in Oklahoma.
CS: They’re massive.
WF: Yeah, they’re huge. I mean, Winstar is three times MGM for an example.
CS: With number of slot machines?
WF: Number slot machines. Great point. The non-gaming side, Vegas, nobody competes with them. So when you look at Venetian, MGM, and Caesars, the non-gaming is impressive. The restaurants, hotel, and everything that they do. But slot machines in MGM has around 2500 slot machines, Winstar’s approaching 9000 slot machines. It’s crazy.
CS: So one thing in our business, we deal with a lot of high-end players. And so money laundering, AML, know your customer has, just in the last three to four years, just become more and more of a thing. Now, is that something that you guys need to worry about or once the money is on the floor, you don’t really care where it came from? Does that touch your software at all?
WF: Great question. And that’s the relationship that we have with the vendors. That’s really neat, because the vendor that makes the kiosk, for an example, also sell an AML product called “Every Compliance”. But because our data is there, there’s an auditor every single day that has to look through those transactions. So think about a person that’s now redeeming more than $10,000. The AML kicks in. It applies to the banks the same way. And with that, that auditor has to look at all the transactions. Where did this person win in the slots? Did this person go put money in the tables? Do they go to a kiosk to redeem money? So our system is bringing all those transactions into one single report. So now I can see you won a jackpot for $500 and then you went and put it into the kiosk, and you took some money with you. Here’s where things get interesting. Now you can print a ticket instead of getting the $500, and you can go put it on the table again, you can go put it on another slot. So the whole connection of the different ecosystems of the casino is really interesting. And it continues to evolve. So for us, it’s really critical that we continue to work with the vendors and we bring stuff in. People ask ‘”why are you guys not building a title 31 solution because you guys have all the data?” For us, we want to focus on our niche, which is having the best casino audit system. It’s all about the auditor. If we can continue to provide the best support and the best cage, vault, and revenue audit solution, we’re going to stay focused on that and work with the vendors that have a title 31 and AML system and make sure we’re not competing with them.
CS: That’s awesome. We talked off-camera, and you have an accent that I’m very familiar with. My wife is from Brazil. I’m down there a lot. I love it. But Brazil doesn’t have casinos, or at least not legal ones. How did somebody like you get in the casino business?
WF: It’s interesting because I come from a background in software for almost 15 years, then I joined with Kurt Williams, you know, the CEO and co-founder of the company. I joined our team here in 2014. And Brazil was going through an interesting transition. They didn’t have legal casinos. But they were the last one in South America to have a casino. So Argentina, Chile, Colombia, and I’m originally from Brazil. So I was actually going back to Brazil, and I lived there as an expat. And I start talking to people and said, “Guys there’s a huge opportunity here.” So the President that is no longer president started this whole law that they’re trying to bring casinos back to Brazil. They would do it in partnership with big guys like Venetian, Caesars, MGM, and they will do it in a resort. So let’s think about Bahia, let’s think about the Northeast of Brazil, a beautiful place. Putting a resort with a casino, putting all the AML practices in place. And so they’re starting slowly with sports betting and the lottery system. But we’re hoping that especially now with the current president, it’s tough because the religious side is always fighting that bill, to try to get it passed. But we hope that casinos will go down there. We have clients in the Virgin Islands. We have clients in Canada. Soon we’ll have clients in Singapore in Macau, but then hopefully, I can go back to my roots and take our system to South America.
CS: Hey, there you go. There you go.
WF: And then we’ll all go there, right. Then you got to bring your stuff there too. I mean, the cruise lines that come out of Brazil, my parents are always talking about MSC. I have never been on one of their cruises, but they say it’s amazing.
CS: Oh yeah, my family and I, my in-laws all we did a cruise in January, and we went to Salvador, Bahia Buzios. So we went all over the north where maybe someday we’ll be together at one of your installation.
WF: We’re not that far. We’re four hours away from you there, so maybe we’ll meet in person in Dallas one day.
CS: Our company’s obviously named URcomped, we deal with comps. Now do you guys only deal with just straight cash or do comps come into play in your tracking and auditing?
WF: Great question. So when you think about paper, right and when it’s not really a cash transaction, one of the biggest and one of the hardest audits to get are comp audits. Our software starts on the cage side, the vault side doing the normal revenue audits for gaming, non-gaming, all the different areas. It takes a lot of time. But then when you get to comp, think about a player- The player comes in and players love this because, as you said earlier you’re going to get a comp to come in and eat at my restaurant. So the player tries to redeem their comp. But let’s say there’s a problem because the comps and the points are tracked in the CMS system. And if the CMS system is not talking to the POS and the comp system, then now that player is going to see he didn’t take their points away. So now they’re going to go to the gift shop. And they’re going to go get something there too because they can use my points there as well. And so they don’t mess around. If they know that that’s happening, they will take advantage. And so our system comes in, working with systems like yours because we have promotional kiosks on the casino floor. They are little kiosks just like an ATM that you can actually create promotional offers, and players can go in there and redeem them. Those guys have to talk to the CMS system talk to the POS. So if you guys are not doing it yet, one of the things that would be very helpful as you guys continue to expand your footprint into casinos is to figure out how you guys can get some of that data. And if you guys have questions, we can try to help. We have a lot of developers that have spent a lot of time dealing through those databases. But, you know, if you don’t have an ecosystem that’s looking at multiple systems when a player is using their comps that can come back to bite you later.
CS: Interesting. I know from our perspective when we deal with multiple jurisdictions, some of the licensing processes and hoops we have to jump through to start working with the casino in the Bahamas, or Nevada, or a reservation if it’s tribal land, are so painful and I can only imagine what you guys have to do. Being that you are software that touches money. I mean, what’s it been like for you guys to expand into all these different jurisdictions? Is it just a mountain of paperwork and hoops to jump through? What’s that like?
WF: We have a full-time employee dedicated to filling out gaming applications. I joke that she knows more about me than my wife does. Because, you got to disclose everything from a partner’s perspective. And then every single one of our employees is also licensed with a casino. Which is really cool, because, for us, it’s about a culture. We want to provide the best support possible for our customers, but we’re also really doing a lot of work to provide an experience for our employees. It’s really important for you to be licensed with the casinos, and you cannot get a DUI, because you might not be able to get a license. So we pay for all of our employee’s Ubers. We want to provide a culture for them, but if they go out and take advantage of that. It’s an employee benefit, you know, to create a culture that they love what they do with our company, but it helps with the licensing process because if you get your license rejected, it’s a really tough process. And then the things that are crazy about jurisdiction that you talk about is Nevada for an example. They are very specific. They work with a lot of casinos. So working with Nevada it took almost three years. We started working with Penn National and that was a huge thing for us when we got them as a client. But in Oklahoma and Washington, in Michigan in California, you have to do at the state level, and at the Gaming Commission level with that tribe. So you think about 170 casinos, this person that has a full-time job doing those applications. It’s very time consuming, but it’s something that you have to do. It’s something that you know, you have those regulatory bodies and those casinos and they’re there to make sure they’re protecting their assets. We comply with that.
CS: Well, it’s a nice barrier to entry too. It’s not like Microsoft tomorrow can come in because look at all the paperwork you guys have had to do. I mean you obviously have amazing technology and a great product. Regulation, It’s a pain to get in. But I know for us, it’s kind of nice that we jumped through the hoops to know that if anybody wants to come in, it’s going to take a while for them.
WF: Do you guys have to get licensed as well?
CS: We do as a junket operator. So junket operator, essentially, because we are paid commission based on the players that we send. And so yeah, we have to be licensed in the jurisdictions we work.
WF: I’ll never forget. So when you’re saying earlier about your Old days of soft count, because our employees when we go implement our software, we are literally living in the cage vault for 24/7. One of the biggest things that we do with our implementations, we’re training them with every transaction. And so we’re living there. We got to go to the soft count room in those jumpsuits that you’re talking about. Sometimes some fit, sometimes they don’t fit so they might look really weird on you. Every single time you go in a soft count room, and you gotta wear those jumpsuits. And if you gave a bigger guy, like me, its tough, one. For the employees that are a little bit smaller, and it’s a little bit easier. So I’m like, “Hey, go to soft count, I can’t fit into that jumpsuit,”
CS: What a great excuse not to have to wear it.
WF: Exactly. We don’t touch the money. We’re only teaching them how to use our software. So one of the things we do with the regulation is we’re there just to teach them 24/7. We are usually there for 10 to 14 days, working with them. And then after we leave the casino, then it transfers to Tulsa, Oklahoma, where our support organization is, and we’re providing support 24/7, but we’re a small company. We’ve made the Inc 500 several years in a row, but we have 37 employees here in Tulsa. We travel to the casinos, but it’s one of those things that when they travel, they go there for 10-14 days and then they come home. Then we’re working here to support organizations to provide the best support possible for our clients.
CS: So the value proposition to them is labor cost savings, or is it leakage?
WF: Now that’s something that’s really interesting. So the ROI almost goes entirely to employee savings. But you have to be careful when you deal with that because dealing with Native American casinos where they’re there to provide jobs. So we try to make sure that we carefully navigate through those waters and say through attrition, if somebody retires or if somebody quits, you don’t have to replace that job. I come to Vegas, and my ROI with one of the biggest corporations in Vegas in six months, most likely they’re going to have 50% reduction in their revenue audit department because… Think about Winstar and the amount of jackpots that are paid on that floor daily. They had employees doing this work four hours a day, multiple employees. Now I’m cutting that to 15 minutes a day for one employee, because they’re paying attention to exceptions and things that don’t match. So instead of going through every single line item of what happened in my casino yesterday, now that revenue auditor is learning how to audit, and what they’re doing is paying attention to that exception. So if what you did compared to the slot machine doesn’t match, now I can pay attention to them and what happened. But if that’s not the case, if everything matches, that revenue auditor can continue to move on. They’re now done with their duties in four or five hours. They can do some other things. It’s tough because you have a lot of people that just put data in Excel. In accounting, they always just throw bodies at it. With our software, you’re going to start teaching people how to audit and when you start, you will get some auditors that are paying attention to things that could be going wrong in your casino. So now you’re being more proactive than being reactive.
CS: Got it. So it sounds like a no-brainer. I’ve seen it firsthand where the tribes care a lot about full employment and that’s not something they want to do. And I imagine probably even in corporations, there’s some people that are looking and thinking their team is going to shrink from 20 to 4 if this software goes in. Maybe they’re an antagonist in the deal?
WF: That’s right. You’ve got to really be careful and make sure that you have your executive sponsor on your side, because you want to make sure that everybody’s on board, even when you go live. When they start seeing what the software does that immediate question is, “what am I going to do? You know, what am I going to do for my next five hours?” So we work with that executive sponsor saying, “now you can find other things for them to pay attention to. The comp audit that we talked about, a lot of times, they’re not even able to get a comp audit, because they have so many other tasks to do. So now they have that ability to get your comp audit to a ticket liability. There’s a report called DOR that people look at it for their revenue on a daily basis. Well, I can automate that entire DOR report for our clients. DOR stands for daily operating report. Most management will look at one,usually in Excel, and they look at their revenue on slots, tables, all the venues. Then they’re comparing that against their budgets and expenses. But it’s very time consuming because you’re thinking about compiling data from 10 systems. It’s very manual for them to do that. And because we have access to that data from a revenue perspective, it was an easy transition for us to be able to then create a DOR for our clients. But when you think about your world your company, I wish I could be on that side of the budget, when somebody is trying to buy it. Because marketing usually has the biggest budget. You saw what Choctaw did with that building in Dallas, right when they projected a sign in there. They’re very strategic and a great thing that they did. But for us, usually, our software is being evaluated by the CFO, which controls the budget, but it’s also one of the tightest budgets in the casino. It’s hard to fight with marketing sometimes. You know, marketing has more of an open budget.
CS: They sure do. And I know that DOR report because I remember when I worked at Harrah’s in Lake Tahoe, I was amazed that every day, we would get that from the previous day. Like you said, it showed what amount was dropped where and it would be against budget. And it’s really impressive how quickly they can turn it around. I imagine that was 2008, before your software. So somebody was cranking out that spreadsheet every day.
WF: Exactly right. Somebody was up really early putting data together, they have to look at their deposits. And also a lot of times the deposit process is manual too, so they have to look at a million dollars versus the 1.4 million and see if they should deposit for 100 or not, or see if they should keep something in a safe. So think about how much goes into that decision making process. Our goal is to allow the casinos to focus on making decisions for the casinos and not worry about putting data into Excel. Let us worry about replacing Excel and paper and let us worry about connecting to the system’s and bringing that data so you can make better decisions.
CS: Genius well, Wanor, thank you so much for your time. I really appreciate it. This is fascinating. And if anybody wants to get a hold of you, how can they do it?
WF: Yeah, I appreciate the time here with you guys. So the website is casinocashtrac.com. My email is Wfranca [at] casinocashtrac.com. Look forward to answering any questions if anyone has any questions and really appreciate the time today.