AI in gambling: how online casinos use artificial intelligence

AI casinos aren’t just the next big thing. They’re the new normal. We’re still discovering the powers of artificial intelligence and machine learning in online casinos — keep reading to find out how the newest wave of technology is influencing the iGaming industry.

How online casinos apply AI technology today

Businesses in every industry are ramping up productivity with AI. There have been amazing advances in machine learning and AI in recent years, so the rise of AI casinos should come as a surprise to no one.

Let’s take a look at how online casinos are using casino AI to enhance the player experience, and by extension, business performance.

Customer support

First up is the most obvious application: customer support.

Advances in natural language processing have made chatbots utterly futuristic. They’re now able to not only automate support, but to learn from past interactions, meaning they’ll improve over time. This leaves human agents free to respond to more complex queries, as chatbots are more than capable of handling mundane issues.

Game development

While AI might not have the divine inspiration of a Renaissance master, it’s still capable of an unbelievable level of artistic output. One application that jumps out is procedural generation, an algorithm-driven method of automatically creating game content. Developers can use AI to create infinite variations of game content, saving them from doing tedious busy-work.

AI is also extremely effective at testing and quality assurance, an essential part of the game development process.

How AI personalizes the player experience

Modern players expect extreme levels of personalization. With AI, casinos can give it to them.

In today’s iGaming market, personalization is essential for player retention. Players don’t want to play at just any casino; they want to play at their casino, the one that knows what they like and what they don’t. To do that, casinos need to comb through and organize their massive piles of player data.

When players log on, they can see a casino lobby that is completely tailored to their tastes. The algorithm can recommend games, tournaments, and other offers based on a player’s preferences, betting habits, and playing history, giving them a wealth of choices that apply directly to them.

AI can also offer personalized bonuses and special offers.

What makes this possible is real-time data processing. Algorithms collect and analyze countless data points, generated by every move a player makes, and then use that data to create data profiles and sort players into coherent segments. This is what allows for such targeted delivery, offering players content that interests them from the get-go.

The impact of AI on sports betting operations

AI’s capacity to quickly process vast amounts of data has direct implications for the statistics-heavy world of sports betting.

Real-time analytics and odds calculation with AI for online casino

No matter how good you are at math, you can’t crunch numbers as well as a computer.

With the help of artificial intelligence, casinos can process enormous amounts of data including historical events, game scores, athletes’ health conditions, and other information that can help to analyze the odds, make predictions, and offer recommendations.

The newfound capabilities of sportsbooks have altered the betting landscape. Dynamic odds, driven by live event analysis, can raise the excitement of betting to a fever pitch; if you see a juicy offer, it could change in literally the next moment: the time to bet is now, before the odds change.

All in all, the rise of AI in sports betting means that players have more reason to get excited and platforms have more tools at their disposal to give bettors what they want.

AI and responsible gambling: ethical challenges and solutions

AI helps platforms do their part to keep gambling safe and combat harmful stigmas. Concerns over gambling harm have led to increasingly stringent licensing conditions in many jurisdictions.

Casinos are expected to do their part in preventing underage and vulnerable players from accessing their platform. To that end, aside from proper identity verification, there are other ways to use AI in casinos — for example, to monitor players for potential problem gambling behavior.

With the right back office software, AI can help casino operators closely monitor player behavior to look for signs of problem gambling. The same way they can constantly collect real-time data to provide players with personalized offers, they can keep an eye out for signs of problem gambling.

Looking for signs like excessive playtime, loss chasing, spending above a normal threshold, and other odd betting behavior, like playing late into the night, can help casinos step in when vulnerable players need to take a step back.

Everyone has their own habits — part of the appeal of iGaming is that you can play wherever and whenever you want, after all — but playing for longer and longer periods of time is a red flag, especially if players are hitting hand after hand of blackjack at three in the morning (playing at night has been linking to the development of problem gambling).

Another problematic behavior is loss chasing — betting more and more after each loss in the hopes that a big win can make up for all the money that’s disappeared. Mathematically, it could all work out if they hit a jackpot, but it’s far more likely that they’re throwing good money after bad. Casinos also need to look out for players reversing withdrawals, which indicates the player is losing the ability to control their impulses.

Automated systems can swoop in to rectify the problem. Solutions can include cooling-off periods, other alerts, or providing access to responsible gambling resources. These real-time measures can truly help players while helping ensure compliance.

Doing so is a big task. That’s why the first step is using AI to segment players according to their risk level. Sorting players into different groups according to their risk level can help casinos set bulk actions that will be effective at scale.

Players at the top level of VIP and loyalty programs often have a dedicated account manager who looks after them, but for other players who visit casinos, AI is a solution. It would otherwise be impossible to keep tabs on the idiosyncratic habits of each and every player. With AI, casino operators can see at a glance from their back office if any of their players are playing at night, chasing losses, reversing withdrawals, or exhibiting any other behavior that might indicate they need to take a break.

Strengthening online casino security with AI

Whenever new tech hits the market, you can bet that fraudsters and scammers are looking for ways to use it. Some players try to use probability programs or even AI bots to fraudulently land big wins. Casinos, it stands to reason, have to use the same tech to keep up. An online casino or sportsbook without proper security would be a very short-lived venture.

Between player fraud, hackers, and money laundering, a security breach could come from any direction and for any reason. Remember, when it comes to security, casinos have to be lucky every day; scammers only have to be lucky once. Luckily, with the help of AI, you can patch holes in your defense and fend off any attack.

This is another application of real-time data collection and machine learning algorithms. Automated systems can identify patterns and carry out constant, real-time behavioral analysis. Operators can also use AI tools to set bulk actions for players who perform certain trigger actions.

This kind of tech is helpful from the moment the player first signs up. AI systems are highly effective at sniffing out fraudulent documents, especially if the operator sets thresholds

Fraud detection and anti-cheating systems

One of the most common threats to online casino security is bonus abuse.

The use of multiple identities is one of the most famous forms of bonus abuse and other kinds of casino fraud. Individuals or even organizations use fake or borrowed IDs, VPNs, and other methods to sign up for a swarm of new accounts, play through the rollover requirements with the minimum bet requirement, cash out the bonus, and disappear.

Bonus abuse can also involve collecting reward money for referring a “friend” who’s actually a fake account in a practice called “gnoming.” Gnoming is also often part of a “matched betting” strategy, wherein players bet both ways on a sports event (one using their bonus or free bet) so that the player wins no matter what. Another application of gnoming is “chip dumping,” where the gnome accounts intentionally lose to the scammer’s account (a method of money laundering).

Luckily, machine learning algorithms can learn player behavior in real time and detect fraudulent, AI-assisted activity. For example, if a player who usually places an average bet of 5 euros starts dropping thousands of euros, something might be going on. AI can also detect if multiple accounts are linked to the same IP address or device

While not always technically illegal, gnoming and matched betting are definitely not in the spirit of the game, and they can negatively affect a casino or sportsbook’s bottom line and other statistics.

AI betting programs are already highly sophisticated; back in 2017, a poker-playing computer known as Libratus was able to outplay four of the world’s best poker players, and multiple YouTubers and writers have developed AI programs for horse racing betting and doubled their money, or better.

Whether or not they know it, operators are already in something of an AI arms race with scammers, who can program bots with betting strategies like perfect blackjack and otherwise use algorithms for betting. Online casinos need to match them step for step, employing AI-powered fraud detection; human intuition alone can no longer cut it.

And, almost incredibly, AI systems can even be used to detect suspicious activity that indicates match fixing.

Boosting casino marketing efficiency through AI

Modern marketing starts with segmentation.

Casinos segment players according to demographic data such as age, gender, and location, as well as by behavior such as size and frequency of deposits. They also segment players according to what they like to play.

Casinos can use AI systems to analyze player behavior and offer them personalized bonuses, special promotions, and tailored marketing campaigns. Take bonuses, for example. There’s a reason bonuses are such a common method of attracting and retaining players: they work.

The right bonus at the right time can reactivate a churned player, support one on a losing streak, or cross-sell a blackjack player on live dealer games. By using AI, casino operators can automate bonus offers by setting the parameters of who receives a bonus, how much the bonus is, and when it appears.

Communication is another area where automation can boost retention. Maintaining contact with players is much easier when casinos use AI to create templates for emails, SMS messages, newsletters, and notifications using placeholders and other features of HTML editors.

We mentioned real-time data collection for personalization earlier. Constant analytics on player behavior can tell casinos when to step in and take action to hang on to a player it’s about to lose. AI can send out personalized marketing offers or bonuses to reward loyal players according to presets that are triggered by certain conditions or behaviors. Predictive analytics can help refine your timing so that the offers are sent at the exact right time.

What’s next: future trends in AI for iGaming

Artificial intelligence in the casino and sportsbook industry minimizes or excludes the human factor (and, therefore, human error) and automates processes that otherwise would take much more time — players don’t have to read forums and look for credible reviews, they know that the chance of fraud is close to zero when blockchain, AI, and machine learning casino management tools come into play.

Another important aspect to keep in mind is how much of an online casino or sportsbook’s budget AI is able to save by taking over the lion’s share of routine processes and analytics.

Taking into account everything mentioned above, we can say that using Artificial Intelligence will become a normal practice in the industry and will contribute to online casinos revenue growth.

Final thoughts: should iGaming operators invest in AI now?

The time to be tentative about investing in AI is long gone.

In every sector of the economy, businesses that don’t use AI will soon be edged out by those that do. Businesses that opt for AI solutions, on the other hand, will see satisfying returns on their investments.