How Will AI Impact the Online Casino Industry?
Posted by Harry Kane on Saturday, September 16, 2023
There’s no doubt that the emergence of artificial intelligence (AI) continues to have a huge impact on markets and industries across the globe, while this technology drives a global sector that was worth an estimated $454.12 billion at the end of 2022. What’s more, this will continue to grow exponentially over the course of the next decade, at a CAGR of 19% through 2032. By this time, the global market will be worth a staggering $2.5 trillion.
This growth will largely be driven by widespread adoption across different verticals, with online casino gambling and sports betting offering a relevant case in point. Make no mistake; AI is poised to have a huge impact on the future of the global iGaming market, from the emergence of enhanced game mechanics to improved security and the cultivation of personalised experiences for customers. But how exactly will AI revolutionise the online gambling market in the coming years?
What is AI?
Before we explore how AI is changing and improving the global iGaming market, it’s important to take a closer look at the technology and how it works. In simple terms, AI describes software that’s capable of scaling human intellect and mimicking subsequent behaviours, especially in relation to speech and the generation of visuals.
It’s also capable of advanced planning and idea generation, with AI having evolved to replicate certain creative processes such as art and content production. At the heart of this evolution and the technology as a whole is the principle of “machine learning”, which is a subset of AI and computer science that focuses on the use of algorithms to comprehend and imitate human behaviour.
AI relies heavily on comprehensive data collection and analysis to mimic human behaviours accurately, while it’s even able to draw information from unstructured resources such as social media. Given the swathes of player data held by iGaming operators in the digital age, there’s an obvious and natural affinity that exists between online casino gambling and artificial intelligence.
How Will AI Impact on the iGaming Market?
Now that you understand the wider concept of AI and its key subsets, it’s time to consider how this technology is likely to impact the iGaming market in the future. Here are a few considerations to keep in mind.
#1. Creating a Personalised and Customisable iGaming Experience for Players
If we accept that AI’s capabilities are heavily reliant on accessing large swathes of accurate data, then one of its most obvious applications exists in the form of customisation. Certainly, online casinos and remote sportsbooks hold large amounts of information in relation to their players, and leveraging AI enables operators to introduce personalisation on a significant scale.
This rule can be applied in a number of different ways too. For example, online casinos can use AI to customise their web content and layout and meet the needs of individual customers, perhaps by positioning targeted games above the fold on the home page. This immediately helps to optimise conversion rates, while ensuring that players can enjoy a seamless and more enjoyable gameplay experience.
In addition to tailoring web layout preferences and displaying games that are most widely played by a particular player, AI is also being deployed to create more immersive and authentic online casino games. This is most prevalent in live casino games, which already utilise authentic pacing and real dealers to create a 3D iGaming experience.
More specifically, AI can effectively learn and simulate the behaviour of real-life dealers in live dealer games, while also enhancing the VR and AR elements now incorporated into real-time iterations of roulette and blackjack. This also lays the foundation for more ambitious and immersive VR games and slots in the future, finally bridging the once cavernous gap between corporeal and virtual gambling.
Overall, this will contribute to an even broader range of traditional and live casino games, leading to more customisable iGaming experiences that are also completely authentic. This has always been the goal of developers in the iGaming space, while it could arguably signal the death knell for brick-and-mortar casinos across the globe.
#2. Developing More Secure and Fairer Online Casinos
AI is also known to enhance the fairness and security of online casino games, once again through the analysis of gameplay data, wagering patterns and the behaviour of individual players. By deploying AI algorithms, casinos can seamlessly detect cheating in real-time, while also identifying suspicious or fraudulent betting patterns at remote sportsbooks.
Similarly, AI algorithms can detect wider instances of fraud, such as bot accounts, collusion between players and even examples of money laundering. This creates huge swathes of data and trends for casino operators to act on, with this enabling them to impose effective counter measures that safeguard players and the reputation of the industry as a whole.
Interestingly, AI software can also be used to monitor the behaviour and betting volumes of individual players, with a view to identifying signs of problem or compulsive gambling. This is most common among high rollers and so-called “VIPs”, the latter of which have been found to account for the vast majority of iGaming deposits in the UK.
This is according to a comprehensive report from The Guardian, which analysed data from nine market leading operators in the UK market (each of which chose to remain anonymous). Fascinatingly, one such firm took a staggering 83% of its total deposits from just 2% of its customers, with this trend common throughout the marketplace.
So, although the recent iGaming review conducted by the UK government has suggested targeted affordability checks to help protect high rollers or younger gamblers under the age of 24, there remains the sense that AI could ultimately provide a less intrusive way of safeguarding players and ensuring that they wager within their means.
Once AI algorithms have identified instances where players are betting outside of their financial means (or their wagering volumes have increased markedly in a relatively short period of time), casino operators can take progressive steps to address this issue and provide support through various resources where necessary.
#3. Utilising Chatbots to Drive Real-Time Customer Service
Recently, the tech and creative worlds have been captivated by ‘ChatGPT’, which is a large and capacious language model-based chatbot that has been developed by OpenAI. Launched on November 30th, 2022, it boasts advanced AI capabilities and can be used to refine and steer conversations towards a desired length or format, while it can even be used to complete tasks such as writing copy.
The emergence and success of ChatGPT has also inspired the development of capable and similarly advanced alternatives, including OpenAI, OpenAI Playground and Chatsonic, the latter of which was accredited by Google as the best alternative to ChatGPT in the global marketplace. Regardless, these tools are impacting on multiple markets and disciplines, including the delivery of customer service.
Certainly, AI has revolutionised the delivery of customer support in the online casino and remote betting markets, largely through the emergence of chatbots. These entities provide players with immediate and intuitive support online, while they’re more than equipped to deal with simple and generic queries such as gameplay, wagering requirements, rules and payouts.
In addition to providing players with quick and efficient resolutions to such queries, they also help to reduce the burden placed on corporeal customer service agents. This improves the quality and accessibility of customer support across all channels, while ensuring that human agents have the time and resources to deal with more complex queries.
#4. Generating Personalised Marketing Campaigns and Promotions
In mature and sophisticated iGaming markets such as the UK, a relatively large number of brands must compete aggressively for a relatively small market share. One of the ways in which they choose to do this is by structuring generous and accessibly welcome offers, which have evolved over time to incorporate multiple legs and cover a much broader range of potential gameplay.
At the same time, AI is synonymous with the customisation of business disciplines such as marketing, which in turn helps to optimise customer engagement, improve loyalty and enhance the lifetime sales value of each player.
There’s no doubt that this selection of factors and trends are beginning to collide, with iGaming operators now using AI to create personalised marketing campaigns that are tailored to suit the needs of individual players. As part of this drive, brands are looking to cultivate customised welcome offers for customers, while also tailoring reload bonuses and promotions for existing players based on previous behaviour and betting patterns.
This could prove crucial for smaller and startup casino brands, who can leverage AI and big data to optimise their full range of bonuses and customise these to suit the needs of individual players. Over time, this will enable brands to optimise customer retention rates and drive loyalty, reducing costs and boosting turnover in the process.
#5. Enhance the Social Aspects and Elements of Online Gambling
We’ve already touched on how AI has further enhanced live casino verticals, by improving live dealer interactions and better replicating the social elements of corporeal gambling. This is a key consideration if iGaming is ever to fully replace brick-and-mortar wagering, as allowing for real-time and authentic social interactions remains one of the final gaps to bridge in this respect.
More broadly speaking, AI-powered algorithms can be used to match players with similar skill levels and playing styles, which has particular relevance in the online poker vertical. This features game iterations that enable players to compete directly against one another, and being able to create evenly matched contests and tournaments is central to fair and optimal gameplay.
This can definitely improve fairness from a players’ perspective, as it means that so-called “fish” (or inexperienced poker players) aren’t thrown into competition with highly skilled practitioners. This is also likely to drive higher retention rates over time, as skilled players can relish being matched with their peers while casual and novice poker enthusiasts can wager freely without incurring huge losses or becoming frustrated.
Of course, this also enables players to be matched according to their risk profiles and betting preferences, ensuring that they only ever participate in tournaments and at tables they can afford. AI algorithms can achieve this by analysing your bankroll history and previous stake amounts, creating a more proactive approach to sustaining responsible gambling in the process.
The Bottom Line in AI and Online Casino Gaming
Of course, there are also challenges and risks associated with deploying AI in iGaming and remote betting. For example, AI definitely places a greater focus on player tracking and behaviour analysis, which some may find unnecessary and intrusive. This certainly raises additional privacy and security concerns, in an age where blockchain and crypto casinos are making it easier to gamble with anonymity.
Also, it should be noted that the overwhelming majority of online casino goers already wager responsibly and within their means. As of March 2023, it was estimated that the average Brit gambled just £141 per annum (or £2.70 a week), while we’ve already touched on how online casinos draw most of their deposits from a small percentage of players.
So, some will argue that the introduction of AI to monitor player behaviour and activity will be completely unnecessary in most instances, while it could encourage gamblers who value their privacy to seek out less well-regulated operators in the burgeoning black market.
Another potential challenge exists in the form of excessive personalisation. For example, by creating games that are tailored to suit player preferences and making these more accessible over time, gamblers may be encouraged to wager outside of their means or for extended periods. They may even be enticed to continue playing even as they lose money, countering the measures previously taken to make online slots less immersive from a visual and audio perspective.
Arguably, these challenges can be easily managed, while they shouldn’t distract from the obvious advantages of AI and the ability of this technology to create a more secure and immersive iGaming experience. It will certainly be interesting to watch this space evolve in the coming months, especially as the technology becomes increasingly sophisticated.