The ties between different industries have become increasingly intertwined over recent years, particularly driven by digitalisation and technological advancement. Many firms are increasingly classifying themselves as tech companies, even if this is not their main area of focus.
This is especially true for those in the gambling sector, who have been pursuing novel ways to incorporate tech into their offerings for the past two decades. Payments technology, and associated tech like Artificial Intelligence (AI), are having a deep impact on how betting firms conduct business and interact with customers.
The world is at a crossroads when it comes to AI, however. Against a changing regulatory backdrop, such as the introduction of the EU’s AI Act, is it time for betting operators to adapt or die? Monika Grue, Regulatory Compliance Director at LiveScore Group, a betting and media firm, says absolutely yes.
“Gambling companies, we consider ourselves technology companies as well,” she said at the Payment Expert Summit last week. “I think it’s essential to stay on top of technology, on the latest technological developments, which can be used for many purposes.”
The uses of AI technology have been widely discussed, and will be familiar to regular Payment Expert readers. Fraud prevention, anti-money laundering, general automation of day-to-day tasks and, for betting operators in particular, KYC and identifying problem gambling – these are some of the most widely noted and touted use cases.
Grue continued: “I think there are more and more cases where we can use it for not only identifying the problematic behaviours, but also interacting with players via automated messaging or sending out questionnaires to players.
“I think more and more players are actually more comfortable engaging with their technologies rather than going on a phone call. So in the interest of responsible gambling, I think we need to adapt to trends in technology.”
However, AI is still in its infancy. Despite rapid advancement over the past couple of years, the regulatory, technological and responsibility elements of AI still need to be ascertained.
In the views of Grue and her fellow panellists, speaking on a session entitled ‘Compliance & AI: Ethical conundrum or progression?’, this change will be industry-driven. This will of course not be exclusively gaming driven – tech and fintech will play the leading roles, no doubt – but bookmakers and casinos will still play their part.
“Technology always goes first,” said Nick Maroudas, Global Chief Technology Officer at Kwiff, a betting operator in the UK and Africa. “Regulating the sector, coming up with guidelines, generally comes after.”
“I don’t think we’re there yet,” he elaborated, when quizzed about where AI stands regardings its potential for the igaming sector. “Things will happen, people will break the rules, the government and regulators will define the guardrails, someone will step outside the guardrails, and they’ll step in again. It’s a process of refining, refining, refining.”
Adoption of new technologies is often a waiting game for companies like gaming operators – this is a case of waiting for technology-first firms to develop the right solutions, and for regulators to draw up frameworks and parameters for how said tech can be used.
As LiveScore’s Grue noted, regulatory frameworks are high level – these guidelines will iron out protocols and risks, complete with risk assessments, and general principles. It will then be the job of operators to test how different technologies work.
Regulation has been progressing at a reasonable pace in recent years, however. Core markets like the US and UK have introduced AI Safety Institutes, and in the EU the AI Act has already come into effect. Though the full impact of regulations is still far down the line, operators should pay close attention to how things pan out.
Grue explained: “At some point we will have to have an AI officer in the same way we have a GDPR officer, but that will be at least five or 10 years from now. There will definitely be a need for a proper framework, auditing and reporting to some regulator in the future.”
Of course, aside from regulation, operators must figure out how the technology can be appropriately tailored and utilised for their unique purposes. Data, an ever valuable and increasingly valuable commodity for tech-driven businesses, will be essential.
Steven Armstrong, Founder of FRL Compliance Solutions, a compliance consultancy firm, shared his views on data, stating that for AI to “really work, it relies on the data behind it’.
He elaborated: “Before we even get to a real phase of really relying on it, most operators will need to go away, clean this data, make sure that data is useful, and make sure that the system you put in place can learn from it.”
AI’s development for gaming is a staging process, he continued, observing that ‘some operators will be advanced and have better data’. With the number of mergers and changes in ownership and management gaming sees, and with some operators managing multiple different brands, data challenges will arise.
A major issue relating to data is ensuring the right data is chosen to inform the learning capabilities of AI. To handle the complex needs of the gambling industry AI cannot be biassed.
“If you put rubbish in, you get rubbish out. If you put bias in there, it will be biased when it comes out,” Kwiff’s Maroudas emphasised.
AI’s potential for the gambling sector has not been lost on anyone involved in it, be these operators, suppliers, payments providers, or consultants. The amount of work to be done to perfect has clearly not been lost on the industry either.
