Gambling Firms Using AI to Profile Players and Boost Revenue

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Thursday, May 10th, 2018 | Written by Stephen Smith

The global online gambling industry is worth more than $44 billion annually according to figures from Statista.com. The sizable amount of money in play makes it no surprise that companies in this sector are attempting to leverage advanced technology to capture and, if possible, increase this revenue. Among the latest developments in the internet casino space is the use of artificial intelligence to profile customers.

Targeted Marketing Techniques

By collecting and analyzing data about potential and existing users, gaming firms are able to create marketing materials that are carefully crafted to appeal to either specific demographic blocks or even single individuals. These ads are then delivered through such venues as Facebook, Google and more traditional methods like email.

Information about a potential gambler’s income level and preference for mobile versus desktop betting can help steer that person toward the games that will maximize his or her playing time and, by extension, monetary losses. If a user signs up and begins wagering, playing activity can be monitored to adjust the promotional offers and marketing messages shown.

Why Is AI Valuable for Online Gambling?

When the bucketing and targeting of consumers has to be done manually, the costs often exceed the rewards. Today’s sophisticated AI algorithms, however, can perform these chores in an automated and inexpensive way. In some cases, the entire cycle from big data analysis and market segmentation through to ad purchasing and emailing can be performed without any human intervention.

Where Does the Data Come From?

Powerful AI processing only really makes sense when there are a lot of data points to work with. At most online casinos, players must enter certain personal details into their account profiles even if they just wish to access play money games. This is a valuable source of data for AI marketing endeavors.

More worryingly, however, there’s growing evidence that gambling businesses are paying for third-party data. It’s very difficult for the law to deal with this kind of activity especially because many of the relevant statutes were written before the internet was even in existence. Regardless, much of this data harvesting is technically legal as people have inadvertently agreed to having their information shared through clauses buried deep in the terms and conditions of the sites they’ve registered for.

Some of the specifics of these secretive data sharing deals were revealed in a report from the Guardian newspaper dated Aug. 31, 2017. Controversially, online casino organizations seemed to be going after low-income customers and those with gambling problems.

AI and Gambling Addiction

Though AI can be used to recruit gamblers who may be addicted, this same technology can be deployed to protect them. By scrutinizing the pattern of wagers placed, including the length of game-play sessions and trends in bet sizing over time, it’s possible to pinpoint individuals who might be problem gamers. They can then be given warnings to stop playing or to employ the responsible gambling features that most casinos offer, like loss limits and temporary self-exclusions.

Even in these cases, though, the ultimate goal may be to increase operators’ profits. By alerting users to the existence of onsite elements for controlling their gambling urges, companies can help them manage their betting in a more sustainable manner and prevent them from leaving altogether. This may very well boost total revenues in the long term.

AI and the Future of Online Casinos

While it’s impossible to accurately forecast the future, there are a few areas that bear watching.

Though customers’ wagering histories are today analyzed mostly for marketing and advertising purposes, they could be used more extensively for the individual tailoring of gambling products. For example, a player who has put in many hours at the five-reel video slots could be shown a pop-up about any similar games that have been added since the time of last log-in. Similarly, the list of a user’s favorite games, which most casinos maintain, could be auto-populated with likely prospects even before a new customer has played a single round of any game.

Artificial intelligence is already extensively drawn upon in non-gambling video games where it presents the player with challenging computer-controlled adversaries. While most gambling titles are too simple and straightforward at present to warrant such a refined approach, new, more complex options could be developed that blur the lines between video games and gambling.

As AI becomes more powerful and inexpensive, it will undoubtedly continue to attract interest from online casino operators looking to augment their bottom lines. Privacy watchdogs may raise concerns about this situation, but the trend appears to be here to stay.