A method and arrangement for communicating with a gaming machine is disclosed. The gaming machine includes a first wireless transceiver. A portable data unit includes a second wireless transceiver. In response to positioning the portable data unit in proximity to the gaming machine, without inserting the portable data unit into any portion of the gaming machine, a wireless transmission link is established between the first and second wireless transceivers. The wireless transmission link may, for example, be a radio (RF) link or an infrared (IR) link. Information is transmitted between the portable data unit and the gaming machine via the wireless transmission link for such purposes as cashless gaming, player tracking, game customization, and data transfer.