AI in gambling: how online casinos use artificial intelligence

Artificial intelligence is revolutionizing every industry it touches. How can AI tech help online casinos with security, responsible gambling, marketing, and daily operations?

Online casinos are no stranger to the cutting edge of technology. The advent of artificial intelligence is flooding the iGaming industry with innovative new tools that have a variety of powerful applications. Let’s look at the most important ways that AI can help online casinos.

AI for online casino

AI in iGaming is used in various ways to save time and human resources for decision making and strategic thinking. Let’s have a look at some applications of artificial intelligence casino businesses can implement:

• Personalization
• Fraud detection
• Customer support
• Responsible gambling
• Loyalty programs and rewards
• Analytics
• Game development

AI in sports betting

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.

AI and responsible gaming

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 (which we’ll cover in a minute), there are other ways to use AI in casinos — for example, to monitor players for potential problem gambling behavior.

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.

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.

AI-powered casino security

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.

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. 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).

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.

All of these phenomena exhibit certain patterns that, to the trained eye, are a dead giveaway that something shady is going on.

But it would be too much to ask to monitor hundreds or even thousands of players across the entire platform to look for indications of different kinds of abuse. They say you set a thief to catch a thief; well, you set AI for gambling bonus abuse. Let machine learning in the casino industry take the lead, and have an AI-driven backend module scrutinize bettor behavior and report back on any who might have an ace up their sleeve.

With AI, it’s easy for casino operators to set the parameters of what constitutes potentially fraudulent behavior and then segment players accordingly (more on segmentation later) and take action when you need to. For example, with Slotegrator’s turnkey software, you can set a duplication threshold for players’ personal information to alert you when a scammer could be creating multiple accounts. The player can then be automatically barred from the casino.

Online casino marketing using AI

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.

In other words, 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.

AI in gambling: process automation

Online casinos and sportsbooks have a lot of moving parts, and every one of them has to be properly oiled for them all to work in concert. Using AI in gambling platform operation helps to automate daily processes that would otherwise take long periods of time and whole teams of people.

User registration involves ID verification, a lengthy process if done manually. The casino has to check not only that the information is all correct — that, for example, an individual with the name “Dave Smith” does in fact live at 487 Riverside Avenue — but that the individual using Dave Smith’s name is, in fact, Dave Smith, and not a member of a bonus-abusing syndicate who’s persuaded friends and family to let him use their identities.

Constant transactions are a fixture of online casino businesses. The faster a deposit goes through, the faster players can hit the slots. When it comes to withdrawals, players would like their money sooner rather than later; any time lag could send them straight to the message boards, where their negative reviews could influence the opinions of hundreds of other players.

Back office software can use AI to complete highly effective analyses of the reams of statistical data on player behavior that online casinos aggregate. Once an average value has been established for one of your KPIs — churn rate or average deposit are two examples — it can not only notify you when there’s a deviation, but provide suggestions for what steps to take to correct the issue.

This kind of AI-powered strategic planning can also apply to games sections and traffic, which is the lifeblood of an online casino.

Only a small fraction of site visitors wind up converting, so casinos need massive amounts of them coming in. To ensure their homepage pops up on enough screens, online casinos typically employ affiliates like streamers and portals/forums to redirect their fan base to the iGaming brand based on their authoritative review. But not all affiliates are equally worthwhile. While affiliates are typically compensated with a revenue share scheme (meaning they’re only paid for the players who prove valuable to the casino), that isn’t always the case — and there’s no sense in paying for worthless traffic.

By using artificial intelligence, casino owners can analyze which affiliate partners or networks are sending the most traffic, as well as determining the quality of that traffic.

The other main marketing strategy that iGaming brands employ is search engine optimization, or SEO. AI has some great implications for both internal and external SEO.

Casino platform management software with GPT AI capabilities can automatically generate landing pages with new keywords (especially useful if you’re operating multiple frontends for multiple target markets).

Backlinks — those that link from another site to your own — are one of the biggest signs of authority that Google analyzes when ranking web pages. It’s a common practice to buy links from other sites in order to boost your rankings, but finding those links can be time-consuming — unless you have an AI scan the web and do it for you.

AI can also automate SEO analytics, internal and external linking, and the completion of metafields.

The future of artificial intelligence in gambling

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.

Conclusion

Slotegrator, a B2B solution and product developer in the iGaming industry, always recommends learning, understanding, and implementing modern technology and trends because it’s the only way to stay on top of the gambling market, one of the fastest-changing industries in the world.

Artificial intelligence in casinos is not our future — AI tools are already used in daily life, helping us to analyze, generate, compare, and detect. Why not save yourself time and money in 2024 if it’s that easy?

Contact our team to learn more about how we implement AI in our turnkey solution and how it can benefit your gambling business operation.