AI in the gambling industry: more than just hype?

Writing an article about AI, I obviously couldn’t resist asking ChatGPT. So, what did the chatbot have to say when I asked how the technology could change the gambling sector? It ‘thinks’ that “AI is set to fundamentally change the gambling industry. Its capabilities extend beyond superficial enhancements, offering deep-seated improvements in user experience, security and operational efficiency.

“Far from being a passing trend, AI represents the future of gambling, promising a more personalised, secure and responsible gaming environment,” the software concluded.

We have already seen some operators and service providers commit resources to develop and adopt AI-driven solutions. There are clearly areas of opportunity for the use of AI in the industry. These could include AI models that can drive greater personalisation by analysing players’ behaviour, preferences and betting patterns to provide customised recommendations, bonuses and game suggestions.

It will also include services that can assist operators in assessing and reacting to player vulnerabilities and markers of harm by evaluating individual player activity, spend and communications, an area where the industry is facing ever increasing intervention from regulators and governments as well as seemingly never-ending fines.

We are already seeing AI-driven customer support services, which have the potential to analyse subtle changes in customer language when assessing potential for harm. AI can also contribute to more sophisticated and efficient methods of fraud detection.

On the flip side, due to the highly regulated nature of gambling, the lack of harmonisation of that regulation and the need for extensive testing and certification, we are yet to really see widespread use of generative AI models to develop or personalise games themselves. That’s not to say it can’t or won’t happen, but the use case is currently less clear than for the other kinds of personalisation.

Weighing up the risks

The potential for AI in the industry is clearly there but alongside opportunity there will also always be some risk, especially in a regulated industry. So, what are the risks and what do operators need to be thinking about when looking to adopt or supply AI-driven systems?

We are now regularly talking to our clients about how to put in place effective governance policies, what to focus on when contracting for AI solutions, how to manage liability and what impact the use of these systems may have on existing data privacy arrangements, in particular.

While AI is often associated with robots and artificial humans in people’s minds, AI systems are still software. Contracting for these systems can involve many of the same issues as contracting for any other ‘traditional’ software. However, the intricacies of the way the tech is used and developed means some issues need to be approached in a different way.

Those buying in AI systems will need to think carefully about what data (including personal data and third-party data) is being used to train the model, what intellectual property rights arise (and who owns them), what training is needed (and who will provide it) and, crucially in this industry, who will ultimately be liable if the model causes an operator to be in breach of its regulatory obligations. Failing to consider these issues at an early stage can have real consequences for a business.

To turn back to my original question of whether AI is more than hype, ultimately, I have to agree with ChatGPT that the use of AI in the industry is more than a passing trend. However, I’m not yet convinced it will (at least in the short term) fundamentally change the industry.

I do, however, believe it offers significant opportunities to streamline systems, further personalise the user experience and provide a safer environment for consumers, provided those making the most of these opportunities do so in a considered and informed way. As always, if in doubt, talk to your friendly lawyer.

Elizabeth Dunn is a partner in Bird & Bird’s commercial team and focuses on regulatory and commercial matters in the gambling industry.

She works closely with colleagues across Bird & Bird’s international offices to provide practical and commercial advice for clients in the industry, from major listed and unlisted B2B and B2C operators to new market entrants.