When rumours surfaced in 2003 that the European Central Bank was quietly planning to put RFID (radio frequency identification) tags in euro banknotes to combat fraud and money laundering, privacy groups balked at the possibility that anybody with an RFID reader could count the money in wallets of passers by.

While the rumours have not been confirmed or denied a new generation of casino chips with built-in RFID tags is giving an insight into the way banks and shops could keep track of real money if it were tagged. The chips will be launched later in 2004 and will allow casino operators to spot counterfeits and thefts, and also to monitor the behaviour of gamblers.

RFID tags are tiny silicon chips that broadcast a unique identification code when prompted by a reader device. The tags do not need batteries, since they simply modify the radio signal fired at them by the reader. The readers work over distances ranging from a few centimetres to a few dozen metres, depending on the type of tag.

Counterfeit chips have long been a problem for casinos, and houses routinely mark their chips with inks visible only in infrared or ultraviolet light. Embedded RFID tags should make the chips much harder to counterfeit, and placing tag readers at staff exits could cut down on theft by employees.

The tags could also help casinos manage large-scale theft. If a large stash of chips goes missing after a table is overturned during an argument, for example casinos sometimes have to change their entire stock. This is unpopular with gamblers, since any chips that they have not cashed become worthless. RFID tags would allow the casinos to identify stolen chips without the expensive process of restocking.

Labels: information breaches, rfid