High-Tech Vegas

Despite the throwback debauchery of the world's gaming capital, when you hear that everything that happens in Las Vegas stays in Vegas, believe it. Vegas is casting more than a lazy eye in your general direction, but it's strictly business.

Last month we took a look at the sober and accountable side of Sin City when W.D. Crotty wrote about Gaming Partners (Nasdaq: GPIC  ) . Through radio frequency identification -- or RFID -- technology, Gaming Partners is able to track everything from casino chips to dice to playing cards with tiny, embedded microchips.

Granted, it's not the fear of someone walking off with a handful of chips that worries gaming establishments. RFID actually has more practical applications like immediate inventory counts and assuring that counterfeit chips aren't introduced into a casino.

But Gaming Partners isn't alone. Automatic card shuffling and table game specialist Shuffle Master (Nasdaq: SHFL  ) is buying a pair of RFID patents from ENPAT that will find the company in the thick of this next-generation technology.

Gaming Partners actually relies on the patents that Shuffle Master will be acquiring for $12.5 million but it will retain its exclusive license. Mikohn Gaming (Nasdaq: MIKN  ) has a non-exclusive RFID deal that will also remain in effect, only with Mikohn now paying Shuffle Master any future royalties.

While the latest Vegas marketing campaign seems to pitch the popular tourist destination as a place willing to look the other way when it comes to legal hedonism, in reality it's still a business and has taken steps over the years to get to know its best customers a little better.

When casinos rolled out slot machine player clubs in the 1980s, it was with rudimentary punch cards that rewarded loyalty but fell far short in data mining. Now, thanks to magnetic strip player club cards, casinos like Harrahs (NYSE: HET  ) and MGM Mirage (NYSE: MGG  ) know exactly what their high rollers are doing -- and how to effectively market to them.

RFID applications in Las Vegas are still in their embryonic stages. It's still in the early adopter stage in many other areas. Over the weekend I interviewed Kevin Ashton, co-founder of MIT's Auto-ID Center. The full transcript of his interview -- including his thoughts on Gaming Partners -- will be made available to Rule Breakers subscribers later this week

So now we can add Shuffle Master to the growing list of companies with growing prospects in the RFID world. If Shuffle Master has its way, it will be the only one left with the ability to have an ace up its sleeve.

Shuffle Master is one of Tom Gardner'sMotley Fool Stock Advisor recommendations. Since Tom highlighted the company in the May 2004 issue, its shares have risen 46.44% versus the S&P's 4.80% gain.

Are you a Vegas junkie? Do you find yourself shouting at your television during the World Poker Tour? How do you feel about casinos tracking you? All this and more -- in the On Tilt discussion board. Only on Fool.com.

Longtime Fool contributor Rick Munarriz may live dangerously, but that doesn't mean that he will hit on 20 in blackjack. He does not own shares in any of the companies mentioned in this story. He is a member of theRule Breakersanalytical team, seeking out tomorrow's great growth stocks today.


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