The Legislative Assembly has adopted the Andhra Pradesh Gaming Amendment Bill 2020. Tamil Nadu promulgates ordinance to ban online gaming and ASCI introduces Guidelines to make real money gaming advertising more responsible. A federal court ruled that games of skill are allowed, but they would be regulated by each state individually. For example, poker in most Indian states is not a game of chance, but a skill-based game, just like fantasy sports. Dmitry Starostenkov, CEO at Evenbet Gaming in his article claims thaе most likely, the skill-based games direction will grow due to the regulatory measures, because Indians as a whole are playing very actively.
Against the backdrop of the COVID-19 pandemic, many Indians began to play actively. If people are blocked in the last slots and bets, they will start playing hard. Instead of introducing transparent regulation and fighting only the black market in betting, lawmakers shut down everything. And lack of regulation also leads to gambling addiction being hidden from state regulators. The use of AI technologies opens up new opportunities for all parties in the market for early (and more effective) prevention of gambling addiction, in addition to automating the promotion and advertising of the gambling business.
Responsible Gambling
The market value of the gaming industry in India was around 62 billion Indian rupees in 2019 and was estimated to go up to over 250 billion rupees by 2024. 80% of Indians gamble at least once a year. Approximately 55% of casual gamers and 66% of heavy gamers across India were seen to be below 24 years old.
In developed countries, the conscious fight against the gambling addiction epidemic is being conducted at the highest level. In the financial sector, legislative regulations and requirements for operators are being tightened. However, all measures to restrict advertising and financial transactions show that regulators have no other methods of controlling gambling addiction. It is obvious that the possibilities for regulating online gambling are close to exhaustion, or they have already been exhausted. If there are no new effective tools other than pressure from regulators , it will be more difficult for legal operators to work. Just look at how badly the Spanish advertising market suffered when betting companies were banned from sponsoring sports teams. Until then, it had been one of the most popular advertising tools in the country for the entire gambling industry. Transaction codes are international practice. In the UK, since 2020, there has been an active ban on transactions with an online gambling code, but this is so far the only country where it works, while a Spanish credit card can easily be used to pay for sports betting and slots.
Harsh restrictive measures could lead to the growth of an offshore casino market. Meanwhile, the black gambling market in India is comparable to the size of the country’s population. Moreover, the market is growing faster than expected. Today, the underground sports betting market alone is valued at $150 billion. The estimated loss of tax revenue due to non-regulated online gaming is between $140 and $279 million in 2020.
The problem of Responsible Gambling is the lack of effective IT tools. For now, blocking of losses, mass non-targeted mailings and disconnecting players at a certain stage are used to fight gambling addiction. This is obviously not enough. Preventive messaging, warnings and calls to “play responsibly” are optional. The player can independently contact a specialized organization, such as GamCare in the UK, and operators can block him on all gaming resources at the request of the national authority. But this is only after a voluntary request from the player. Thanks to AI, early detection and more effective prevention of gambling addiction is possible. With the help of AI, we can automate some processes that instant messengers will never cope with. We will be able to identify potentially addicted gamblers, or gamblers with a high risk of addiction, even before they seek help, and, accordingly, reduce the number of people who suffer from gambling addiction in online casinos.
AI in legal and illegal gambling
According to a study by Oracle, 78% of brands have confirmed that they have already implemented or are planning to implement artificial intelligence solutions in 2020. For example, Google uses AI for ranking. Amazon knows what people like to buy. In the gaming industry, machine learning systems have surpassed human skills over the past 20 years. Although they still have certain limitations, AI has already learned how to extract patterns from match statistics and analyze Big Data for more efficient bets. AI is better at gambling and bluffing than professional players. In 2017, the Liberatus Carnegie Mellon University system won a poker tourney against three professional players. 20 days and 120,000 hands of No Limit Texas Hold'em cost players more than $1.76 million.
If we talk about legal ways of using AI in gambling, we mean only correct models of working with players and with an audience. AI allows you to automate personalized communications and offers aimed at increasing the LTV of each player. Large online casino operators have accumulated data on hundreds of thousands of players which is physically impossible to process manually. Complex AI is used to analyze which elements of online casinos make the game more popular, why users stop playing a particular game, why they switch, etc. AI can predict how a slot pool will work if there is no change, and how to maximize revenues by rearranging the slot machines. AI is used to create customized gaming experiences and promotional offers. These technologies combine individual gambling stories, demographics, and social media for better marketing reach. In the "white" model, the player does not necessarily understand that an AI is interacting with him, but, as a rule, he is warned about it in advance.
The most common example of illegal use is AI-powered bots. According to statistics, they win with a probability of 5-10 times more often than ordinary players, simply due to the fact that their algorithms are devoid of the likelihood of committing human error. Bots are used to spin slots endlessly to increase the likelihood of getting jackpots, etc. Online casinos are usually at a disadvantage compared to their offline counterparts when it comes to security. There are no cameras or security personnel to monitor the deception. In this arms race, scammers create their own AIs, and gaming platform developers try to identify and block them. Bot developers come up with new schemes again, and so on ad infinitum. Fortunately, most online casinos use the same tricks to weed out players who like to play unfairly. For example, stickman robots in live dealer games are becoming commonplace.
Does artificial intelligence have the right to block a player? We think so. For this, first of all, clear criteria for problematic behavior are needed. The British GamCare, one of the largest organizations that deals with gambling addiction, offers clear criteria for the behavior of people who are prone to gambling addiction. They spend more time playing than planned, and their amount of playing time constantly increases. Based on analysis of transactions, AI can clearly determine if a person is spending more money than planned or using borrowed funds, for example, if during a single week the player makes five payments with three different credit cards. AI can detect suspicious players and notify online casino operators by analyzing the data for addictive behavior. A player's account may be suspended or put on hold while they are offered assistance.
State regulation measures have been exhausted
Each gambling operator strives to maximize their profits. Every click is studied for profit optimization, not for user convenience. Objectively, there are few restrictions on operators today, except for government regulation.
It is more profitable for online casino operators to be socially responsible than to fight governments. But the cost of attracting each new user is growing. Further tightening will make it unlikely that legal operators will go to the openly black market because of the reputational damage, but they can just formally leave the market. And in their place will come other companies that will work in the 100% shadow sector, which will only increase the problem of gambling addiction and irresponsible gambling.
For AI operators, this is an opportunity not only to automate work, but also to take it to a new level. It is also a great reputation bonus for businesses developing responsible gaming. AI will relieve regulators because it will take over an important part of their work, and also reduce the pressure on operators.
