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Big Problems Call for Big Data

The rise of artificial intelligence in gaming

Big Problems Call for Big Data

For years, artificial intelligence (AI) was a nebulous concept, a far-off vision that typically carried negative connotations. The idea that intelligence could be formed outside the boundaries of the human mind was often met with skepticism and condescension, and often portrayed in its worst contexts, such as robots with Gatling gun arms and computers hell-bent on overtaking their physical counterparts.

And yet, slowly but surely, it’s become ubiquitous. As a society, it’s how we make informed decisions and solve difficult problems, whether it be in government, in retail, or now, in gaming, thanks to the innovation brought forth by the increasing number of AI-centric companies and specialists.

Every aspect of day-to-day operations, including casino floor layout, oddsmaking, payment systems and processing, loyalty and rewards and guest booking services have been transformed with the help of AI, and so long as operators continue to see improvements year-over-year, those in and around the gaming industry can expect AI to continue its ongoing revolution, one that has been largely quiet but consistent.

Digitizing Brick-and-Mortar

For operators, digital offerings such as iGaming and mobile sports betting are new and exciting, but for the most part, they are already built and designed to seamlessly integrate with AI systems. The impact analytics has had on the land-based industry, by contrast, represents a more impressive showing of its true abilities.

Quick Custom Intelligence (QCI) has long been at the forefront of this evolution, helping casinos to transform their player data from numbers on a screen to real-world actions and solutions. Co-founder and Chief Technology Officer Andrew Cardno has seen the evolution of AI firsthand over the past 30 years, and by now, the technology has become so commonplace that it’s nearly impossible to avoid.

“What I’m seeing is people are adopting a level of artificial intelligence without really saying, ‘I’m getting into AI, I’m going to implement AI,’ yet they’re using the benefits of AI,” Cardno says. “Like computer vision, person identification, bad guy identification… It’s just a ubiquitous part of so many technology platforms. So, what we like to do is produce things that just distill down really, really hard questions into numbers that can be consumed or analysis that can be consumed.”

Platforms such as QCI emphasize the importance of connecting the right players to the right products, which is a classic example of a hard problem that AI can help solve, or at least improve over time. Whether it’s slots, table games or sportsbooks, Cardno maintains that operators should find ways to “optimize their products in such a way that the customers find the products they want and the layout they want, where they expect them.” By tracking and analyzing the player data as it comes in, this process becomes less daunting and more creative.

Sometimes casinos can feel like unicorns, completely separate from other, more traditional businesses, but they still rely on basic sales principles. When a customer buys products on Amazon, for instance, it establishes a pattern that AI then decodes and accelerates. The same principles can then be applied to land-based gaming, which seemed impossible in the not-too-distant past.

“What I’m seeing is people are adopting a level of artificial intelligence without really saying, ‘I’m getting into AI, I’m going to implement AI,’ yet they’re using the benefits of AI.”
Andrew Cardno, Co-founder and Chief Technology Officer, Quick Custom Intelligence (QCI)

By accepting these principles and adopting the proper systems to complement them, Cardno says, operators can then “understand, optimize and make decisions around (their) gaming offerings with four P’s, not three: price, product, place, promotion.”

Commercial industries understood these concepts years ago, but as with most trends, gaming companies have been reluctant to fully embrace AI for a number of reasons. Two of the biggest are smaller sample sizes and bigger stakes; the brick-and-mortar casino industry has never been “broken” per se, so why would operators risk large amounts of capital investing in systems they don’t fully understand?

Similarly, these technologies thrive when they are absolutely saturated and overflowing with data, and most casinos can’t supply that level of input. Thus, it’s taken a lot of arm-pulling and look-sees for gaming-focused AI companies to get to where they are now—in other words, they’ve had to show their work.

“Everything in gaming seems like it takes 10 years or 15 years longer than it does in other industries, because there’s this inherent sense of ‘I already have something that I know works pretty well,’” says David Patent, CEO of the data curation platform VizExplorer. “We started selling a slot recommendation engine about a year and a half ago. There was a lot of interest in it, but there was a big hesitation because people still wanted to know, ‘How do I know that this is actually right?’ And it was only when we were able to introduce a reporting tool where you could look side-by-side, you can see, ‘Here are the recommendations, and by the way, here are the numbers on paper that will help back it up.’”

The lack of data points relative to analytical behemoths like Starbucks and Netflix can make gaming AI systems seems sluggish and infantile, but Patent is confident that advancements in technology for the land-based sector, namely “real-time bonusing on machines,” can help build up a “real-time data feed that you can harness and start doing interventions very quickly.” From an operator’s perspective, the quicker you can accumulate and analyze your player information, the easier it is to accept the investment needed to implement AI technology.

Even though adoption has been slow, the impact has been sizable, because once operators make the commitment to trust what the technology is telling them, it’s nearly impossible to rely on old-time tactics again. And, in many ways, it’s not the technology that’s informing those decisions; rather, it’s the data from what their players are telling them, and players will always be the key component to any land-based outfit.

Revolutionary Rewards

So, if players are still the most important factor in the success of AI systems in gaming, it makes sense that they would emphasize loyalty and rewards programs. After all, attracting new players will always be difficult, but convincing them to stay should not be.

As Patent explains, loyalty programs are “definitely seeing much more sophistication, segmentation that’s looking at behaviors as opposed to just demographics.” The advent of things like “omnichannel marketing and offers that are redeemed from your smartphone” have reduced a lot of friction and led to “a lot more customer-friendly offers that are loaded onto your card,” which represents a “boost in technology with huge, huge potential.”

Earle G. Hall, CEO of Axes.ai, is bullish on all applications of AI in gaming, but marketing and rewards is where he truly sees beautiful growth potential.

“Rewards and promotions are supposed to cost us nothing,” says Hall. “They’re part of the overall gross gaming revenue. AI’s job is to learn who the customer is better and faster than any human can. Once you learn who the person is from their past behavior, the math, the AI, the mathematical algorithm, its job is to predict the natural and normal behavior for the future, so that we can influence. And what is the tool of excellence for influencing the future? It’s loyalty rewards.”

When optimized to their full potential, advanced AI systems can evolve to the point where they understand the customer base so well that they seem almost omniscient, capable of charting the future with alarming accuracy. Hall says that once operators understand the benefit of harnessing this power, they can then “use a loyalty rewards program to influence it so the customer is more satisfied and the casino is more profitable.” When you expand those abilities across multiple properties, states and jurisdictions, the influence only becomes stronger, and smarter.

Operators big and small are plagued by three questions, according to Hall: “How do I get (players) in, how do I get them to stay longer and please tell me why they left.” If managed and tracked properly, effective loyalty systems powered by AI can help address all three and store data for each, which then contributes to better targeted campaigns and ultimately, more effective conversion rates.

Of course, this is old news in other industries, but casinos have inherent challenges that create roadblocks for the widespread adoption of such technologies, such as cash, ATMs and in-person sign-ups and redemption. However, technology involving AI has proven to be extremely effective in alleviating these pressure points, for both businesses and consumers.

“The easier you make it for customers to consume your product, the more they’re going to consume, and that’s just the truth,” says Patent. “Look at fast food restaurants, right? It’s all about reducing friction, so that you don’t have to go through these hoops. I’d have to get it from the game, pull out my card, put it in, hope that I remember my PIN and that the machine isn’t out of bills and that I didn’t already withdraw today, because when I go through an ATM it limits me to $500 a day or whatever. There’s all these hurdles. Even if you do try to make that decision, it’s just on your phone and you don’t have to leave, and you can just move it. Why wouldn’t you do that?”

Up Into the Cloud(s)

“The easier you make it for customers to consume your product, the more they’re going to consume, and that’s just the truth.” —David Patent, CEO, VizExplorer

If brick-and-mortar represents the current iteration of AI capabilities, then surely the future is online, decentralized and cloud-based. Operators have long salivated over the prospects of widespread iGaming and mobile sports betting possibilities, and that is where data systems can truly experience exponential growth. In a land-based system, it often takes physical action to build up those coveted data points: a player needs to go to the property in question and sit down at a slot or place a sports bet for the systems to build up enough information to work properly.

Conversely, Hall points out that “in the online world and in the (mobile) sports betting world, there is nothing holding AI back,” due to the accessibility and convenience of online-based offerings—the sheer number of transactions taking place has thus paved the way for AI to become “the dominant technology factor and influencer in the speed of growth” of the two markets, and if companies want to keep pace with the field, they must make “the quantum leap to big data and cloud.”

For Patent, the marriage between AI and iGaming specifically represents a potential hotbed for innovation, because “that’s where it makes the most sense.” The fact that players can “spin the wheel or get a hand of blackjack every few seconds” means the data stream can be built at warp speed, bringing the gaming industry squarely into the 21st century of AI technology.

All of that being said, however, the brainpower behind AI systems is world-class, expensive and hard to find. As one can probably imagine, top-notch data scientists are a hot commodity for businesses of all kinds, and gaming may not necessarily be their first choice. Because of this limited supply, operators will find it difficult, if not impossible to do it in-house, especially if they don’t have the wherewithal to put the right people in the right places.

Instead, the proven skills and expertise of teams like QCI, VizExplorer and Axes will be in high demand in the years to come, as more companies turn toward AI solutions for their biggest and most complex obstacles.

“I think we’re going to see AI just become an integral part of everything, because it’s how we’re doing computers today,” Cardno says. “It’s how we’re doing computer chips today. It’s how we’re solving hard problems today. It’s how the human interface works today. It is an integral part. So, already, it’s busy happening, and it will just be quiet. I think it’s going to be the quiet AI revolution in gaming rather than, ‘Oh, I’ve implemented my own AI team,’ because that’s not going to happen. It would be very hard for a gaming operation to be competitive and recruit the talent to build an AI product for themselves and then maintain it. That level of talent pretty much picks the jobs today.”

Jess Marquez is the managing editor of Global Gaming Business. A lifelong Nevadan, Marquez has communications experience across multiple sectors, including local government. Prior to joining GGB, he was the communications and advertising director for a prominent personal injury law firm based in Las Vegas and Seattle. He also founded and hosted The Pair O’Dice Podcast, a weekly show that focused on sports betting news and predictions. He graduated magna cum laude from the University of Nevada, Reno in 2019 with a B.A. in journalism. Outside of work, Marquez is passionate about professional sports, classic literature and leatherworking.

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