Artificial intelligence – the time is now

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Much of what is being spoken about in terms of artificial intelligence and machine learning is nothing new to the online gambling industry. Algorithms, cloud-based computing and big data have been central to the proposition for many years and the debates and conversations about how best to adapt businesses to each of these tech developments are certainly ongoing within the industry.

Particularly when it comes to sports-betting there is essentially nothing new about automation in the workplace. Any in-play trading desk is driven by automated trading; the algorithms runs the desks as much as the other way around.

But what is new is the pervasiveness of the chatter about AI and machine learning and the degree to which the discussions in other sectors are indicating huge changes around the corner for the gambling sector. Whenever a tech company talks about personalisation - whether it is about emulating Amazon’s recommendation engine, utilising Apple’s Siri, or looking at Facebook’s news feed or Spotify’s music discovery – it is a discussion about AI. It is central to how online interactions will develop in the future.

According to US market intelligence research firm Tractita, AI is poised to have a transformative effect on consumer, enterprise, and government markets around the world and the use cases. The report suggests applications for AI will be apparent in almost every sector to such a degree that it predicts that annual worldwide AI revenue will grow from $643.7m in 2016 to $36.8bn by 2025.

Proof of the degree to which the adoption of AI is already taking place comes from the figures for chip sales. A recent Economist article pointed out revenues from graphics processing unit (GPU) sales had surged more than 40 percent in 2016 as data centres were up their processing capacity in order to manage the computing needs of artificial intelligence programmes. As the article explained: “The architecture of computing is fragmenting because of the slowing of Moore’s Law, which until recently guaranteed that the power of computing would double roughly every two years, and because of the rapid rise of cloud computing and AI.”

An evolutionary process
How much the world is changing due to AI was demonstrated by the news recently regarding the AI computer programme Liberatus which in a live casino took on all-comers in a 20-day long experiment and showed that an AI ‘bot’ could, though machine learning, beat humans at poker. As GamCrowd has written about this news, this development has huge implications in terms of what it says about machines being able to learn through trial and error just like humans.

The technology involved isn’t just more sophisticated than ever before; it is also more accessible. A recent article on O'Reilly.com (http://oreil.ly/2jxIWPK) pointed out that the barriers to entry for algorithmic financial trading had never been lower.

“Not too long ago, only institutional investors with IT budgets in the millions of dollars could take part, but today even individuals equipped only with a notebook and an Internet connection can get started within minutes," the article stated.

Open source software, open data sources and an abundance of trading platforms have opened to market up to anyone to take to the field (albeit with a good understanding of Python coding).

You might not want to hit the automated trading floor with your own trading system, but it does say something about how the world is developing that it is possible. Ted Power, the co-founder of a mobile app that simplifies and enhances the expense-management systems pointed out in a recent article for IDG Connect (http://bit.ly/2kQAGMd) that AI will transform many products and services. “Machine learning is a tool, and like any tool, we need to learn how and when to use it,” Power wrote.

In a near-future world, he theorises, companies won’t be tethered to complex SQL database syntax in order to perform relatively simple business intelligence tasks. “Relative to the challenges we have faced adopting new technology in the past, getting comfortable with AI might not be so difficult,” he wrote. “In many ways, AI enables a more intuitive relationship with technology. Instead of brittle interactions, interfaces will increasingly be more flexible and conversational. Instead of cursor and keyboard input, we will increasingly use voice and video as input.”

Even at a superficial level, it can easily be seen how gambling companies might benefit from such advances. Indeed, companies within the space are already working on these areas. BtoBet, for instance, has recently issued a white paper explaining how it believes AI will transform how operators and suppliers understand their players.

They are not alone in exploring how big data and machine learning will one day enable us to better understand player motivations and potential spending patterns. Many others in this space are also exploring beyond our current boundaries. GamCrowd has recently written about how gambling sector adtech specialists Fresh8 is employing self-learning technology to better inform its ad placement for brands such as BetVictor. Meanwhile on the problem-gambling front there is BetBuddy, a data analytics and personalisation provider that is employing machine learning to guide the industry provide better player protection.

This space will grow
We are certainly just at the start of the curve as far as use cases in online gambling. Its adoption in terms of gaining a greater understanding of the customer and their motivations will be central to the industry in the years ahead. In the next month we will be discussing some of the major themes and advances being made in AI and seeing how they relate to this sector. Our use cases will by no means be exhaustive, but we expect to be able to show the degree to which AI and machine learning are already driving innovation in the sector, and how much more there is to come.