Open And Closed Loop

Can you give us a brief overview of AXES?

AXES was founded in 2008 to provide a solution to a problem that was transpiring in Mexico at the time: Gaming had become legal but it had to be cashless from day one. We were approached by a group of investors that were building casinos in Mexico with a simple premise, that we had to be on the Cloud (and this was early, in 2008). We had to make it work in real time, we had to do end-to-end KYC of clients, we had to monitor anti-money laundering restrictions, and we had to enforce responsible gaming regulations. Our remit slowly expanded from there. Around 2012, clients began asking for things like rewards, player’s clubs, jackpots and promotions. By mid-decade we were introducing cashless payments solutions, first with an e-wallet and then with Tito, our smart card. It was around this time that we started building our app store.

Our cloud is built on Microsoft Azure, which brings with it many advantages: It’s highly secure, resilient and uses blockchain technology. We’re ahead on this one. They are sorting out glitches in the tier-one market that we figured out 10 years ago. 

What challenges do you encounter in trying to grow your brand? 

Without trying to sound facetious, it’s easy to do this stuff in Nevada or California. It’s not easy to do this stuff in under-developed countries. For us to prove the worth of what we were doing, we wanted to be able to extract data in real time in places like Paraguay, in places like Colombia, or in places in Africa and Asia where we were having speed and security issues. When we built the system, we built it with military grade design so that it would be bulletproof by the time we introduced it to first-tier markets. Now we are ready. Over the last two years, we’ve been slowly integrating into the United States, gearing up for this trade show, to do an official North American kickoff. We’ve just raised some capital and have $26m in our bank account to start the USA commercialization project.

What has your experience at G2E been like?

It’s been overwhelming. Everybody’s coming in and saying that we are the only people here that are doing cashless. I can’t help but agree with them. We’ve been doing closed-loop cashless for 12 years now. One of the odd things we’ve found on the floor this week is the total state of confusion when it comes to what cashless is. People don’t know that it is actually two separate worlds, open-loop cashless and closed-loop cashless. 

What is the difference?

Closed-loop cashless means you are running a system that does not connect to a banking system. So, when you come into a casino, you go to a cashier, you go to a kiosk, you go to  some form of taking the currency and moving it into the casino’s closed loop system. Honestly, it’s something you see all over the world. Even Starbucks has a closed-loop system which then connects to an open-loop system.

We’ve been doing closed-loop cashless for 12 years now. As for open-loop, this is partnering with banking companies or virtual banks. This week has been overwhelming for us because everybody seems to be ready to go to the Cloud. At the same time, everyone is frightened by the prospect of getting hacked. It is a fact that, in 2021, more tribes and casinos have been hacked than in the last 10 years combined.

Why do you think these hacks have picked up?

It’s because they are old fashioned, they are client-server based. If you could imagine having all the money in the world to keep safe in your house, how safe would it really be? Can you trust the security?

For a long time, everyone thought that client servers were the only way to go because the Cloud was regarded as dangerous. What has happened over the last five years is all of banking, all of fintech, has become cloud-based.

So, just like I said at the international gaming regulators conference in Boston a few weeks ago, where I was the opening keynote speaker: If you could only realize that if you’re client server, rather than cloud-based, it’s not a case of if you’re going to get hacked, it’s a case of when. This is because you don’t have the money to invest in enough security to not be vulnerable.

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