The data transfer system operates by collecting data from game machines and transferring said data to a smart card type data transfer unit containing memory, addressing, control, and protection circuitry. Depending on the level of capability desired, the card may or may not have microprocessor and encryption circuitry. Various embodiments include systems that store data regarding cash flow, security violations, machine malfunctions, and volume of play attributable to an individual player, and transfer that data to a smart card for use in monitoring machine performance and determining the eligibility of a particular player to receive premiums as a play incentive. Additionally, either in concert with one or more of the above features or not the system can allow a player card to be used in lieu of cash to play game machines. In this instance, the player card can either be used as a pre-paid debit card, or as a credit card in which case money is collected from the player after he has played. Player cards can be used as a means of paying winnings to the player in any of these embodiments, with the player redeeming winnings and unused play entitlements at a cashier's station.