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On-demand has big payout for Station Casinos

Station Casinos built a multibillion dollar gaming business by catering to Las Vegas locals -- and by having one of the most sophisticated data centers in the industry.

LAS VEGAS -- Marshall Andrews is likely one of the most unassuming IT managers in the gaming business. He is soft-spoken, but candid; serious with a sense of humor; and modest. Listening to him talk, it's hard to imagine that this former San Franciscan not only manages, but helped build, one of the most sophisticated IT infrastructures in Las Vegas.

And he said he never gambles.

He did, however, gamble once, nearly 10 years ago when he accepted a job with a then minor player in the Las Vegas casino and gaming scene -- Station Casinos.

"Ten years ago, all casinos were in the Dark Ages of technology," said Andrews, the company's vice president of information technology.

In 1994, Glenn Christenson, executive vice president and chief financial officer of Station Casinos, anticipated rapid growth for Las Vegas and envisioned a technology infrastructure to support Station's multi-property master plan. He courted Andrews for the job.

For Andrews, the idea was intriguing and he decided to take a chance, moving from his long-time home of San Francisco to Las Vegas.

"We hesitated a bit, but I thought if what this guy says is for real, this could be an amazing opportunity," he said.

The move paid off, for both Andrews and Station Casinos.

Today, Station Casinos is the fifth largest gaming and entertainment franchise in the world. Since 1994, it has built and opened seven casinos and acquired and converted five others. Its holdings include the Palace Station Hotel and Casino in Las Vegas and the Green Valley Ranch Station Casino in Henderson, Nevada.

The casino's stock value has increased 311% in 10 years. It has net revenues of over $800 million and employs approximately 10,000 people. The company owns or controls the largest portfolio of undeveloped gaming-entitled real property in the Las Vegas metropolitan area -- $1 billion available for development.

Station's amazing growth is attributed to a strategy that caters to locals. While its competitors, such as Harrah's and MGM, seek out the tourist market, Station's sweet spot has been those local residents, most of whom are over 50 and visit the casino two to three times per week. More than 80% of the Las Vegas population lives within a five-mile radius of a Station Casinos property.

A critical component of that stratagem is the Station Casinos Boarding Pass, a player rewards program the casino began using in 1999, allowing customers to earn points for slot and table game play at any of its properties and redeem them for merchandise, food, lodging, movie passes, child care, concert tickets and other events.

Given that 85% of a casino's cash flow is generated through slot machine play and that Station operates more slot machines in Las Vegas than any other gaming company, it was obvious that Station needed to exploit the marketing promise of the bonus program.

Of course, expanding marketing programs meant reworking the IT infrastructure.

Behind the player's reward program and several other initiatives, including remote wagering, slot bonuses and table tracking, are a number of proprietary business applications and a complex IT infrastructure that Andrews said has given Station its competitive edge -- including several IBM iSeries featuring on/off capacity on demand to handle sudden peaks in usage on its 20,000 slot machines.

Nine years ago, the casino had three AS/400s. Today, iSeries Model 825s are at the hub of the casino's data centers and are used for back-office applications, data warehousing and development.

The iSeries, in addition to several other systems, including Novell networks, J.D. Edwards software, EMC storage devices, Windows server clusters and a slew of PCs, are used to track and identify members in order to give them the ultimate in customer service.

The system tracks everything from the member's last and biggest wins to the last time they were in to play to which machine they played. Sophisticated analytics software charts the most intimate details and preferences of a player's gaming life -- even his birthday. The goal is to "make sure you're taken care of because we want you to come back," Andrews said.

Two years ago, Station's implemented an IBM capacity on-demand system as part of a major upgrade. Expansion had put a strain on the existing infrastructure and Andrews was concerned it couldn't handle those spikes in demand, such as a Friday-night promotion.

"We were expanding so much it seemed I was always asking for another iSeries," Andrews said.

Station Casinos is undergoing another complex software development project -- the biggest undertaken by Station Casinos' IT department -- a race and sports system. The project will run using Microsoft's .NET platform.

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