Insurance for one-armed bandits

As the state approves a $700,000 study of problem gamblers and their cost to society, it may soon cost a little less for gamblers to procure insurance to cover their losses.

Walker Digital Management L.L.C. has developed a system for gamblers to purchase insurance policies based on both actual and potential losses, and take their policies with them between slot machines or other casino games.

Run by Priceline.com Inc. founder Jay Walker, the Stamford company develops new technologies for casinos, among other endeavors.

For the past decade, the company has been working on providing insurance for gamblers; this year alone, the U.S. Patent and Trademark Office has published 100 patent applications by Walker Digital. Most are related to casino systems, including ways to allow gambling teams to share payouts from multiple slot machines; and techniques to ferret out “problem” gamblers by behavioral telltales.

Walker Digital is not the first company to develop insurance systems for use in slot machines, which can take the form of a fixed-dollar payout up to a certain limit; a percentage of all losses; or a number of free plays on a machine.

But past systems have not computed premiums based on actual losses, nor allowed gamblers to transfer their policy to another game.

Walker Digital”™s system would issue smart cards to gamblers, which, when swiped on machines or kiosks, would provide updated information on losses and allow gamblers to purchase or upgrade their insurance policies.

Slot machines already accept rewards cards at Foxwoods Resort Casino, and Foxwoods is in the process of upgrading its video-slot machines for additional functionality, including displaying marketing information on promotions and events at the eastern Connecticut resort and potentially allowing guests to make reservations or purchase tickets.

According to the Hartford Courant, Mohegan Sun casino uses similar technology at a Pennsylvania slots parlor it owns and is considering it for its Montville casino.

Walker filed a patent application on the method with Michael Downs of Stamford and Stephen Tulley of Fairfield, as well as James Jorasch of New York City.