In almost every industry, AI presents both opportunities and challenges. This includes the sports betting sector. Russell Karp is the senior vice president of DataArt and he dives into sports betting’s most exciting opportunities in this AI-driven age.
AI plays an important role in sports betting.
AI is at the forefront of both innovation and customer satisfaction. It can improve data analysis, odds calculations and refine user experience.
AI-based CRM systems are able to analyze user behavior, preferences, and trends in order to provide a more personalised digital experience for the bettors. It allows sportsbooks to gain an advantage over their competitors while also keeping customers happy.
While the advantages of AI-based sports betting are obvious, it is not without challenges. There are many challenges, ranging from data privacy and security issues to potential ethical dilemmas or over-reliance upon machine-driven prediction.
Analytical AI and Generative AI
It’s crucial to understand that AI comes in different forms. There are many types of AI technology, from analytical AI to generative AI.
The ability of Generative AI to generate new content and make predictions on its own is what makes it stand out. It produces results that are not included in its original training data. This could translate to generating content for sports betting or simulating possible game outcomes using complex models.
The AI analyzes data in order to find patterns, anomalies or correlations. Sports betting can use analytical AI for calculating odds, analyzing past bettors, and predicting game outcomes based on historic data.
Chatbots and other tools can assist bettors in making better decisions. These tools can also increase engagement by allowing for easy text-based interaction. A user might ask about current odds on an upcoming soccer match. Chatbots can provide the latest odds and statistics, as well as team information, to help bettors make informed decisions.
Chatbots are also a great way to engage in casual conversations with users, whether it’s answering questions about sporting events, betting rules, or other topics. This interaction can help users save time by searching for information and keeps them interested in the platform of the sportsbook. The likelihood that a user will place a bet increases.
Challenges and Downsides
Operators should be aware of some important issues AI brings to sports betting as this technology improves.
AI, as we’ve said before, isn’t only generative and analytical. Open or closed, AI can be either. A closed AI model is a private model; some refer to it as a “blackbox”. An open AI model is one where the learning algorithm can be accessed online by anybody.
Open AI can pose a risk to bettors’ safety and privacy. AI models are able to learn specific data and retain it, so if the source code is open, sensitive information about users, such as financial data, could end up in there. Bettors could be at risk. Algorithms are also fallible. AI models are made by human beings and can therefore reflect biases. This can affect the accuracy of the predictions, as well as the fairness in betting.
Closed AI models ensure that all sportsbooks’ data is kept private. Open AI may be more flexible and cost-effective, but closed AI offers security and privacy to all your customers.
Responsible gambling and ethical considerations
The closed AI is not as straightforward as you might think. Closed AI algorithms will protect the personal data of your customers, but it is possible they could cause bettors to lose trust in your platform. In the end, users may perceive a lack in transparency which could lead to a decrease in customer loyalty.
AI-based sports betting raises ethical issues, especially as its predictive abilities can unintentionally fuel addiction. These systems, which are able to pinpoint a person’s gambling habits and preferences, can increase the desire to play beyond your means. This is contrary to the commitment of the gaming industry to responsible games.
Weaknesses and limitations
The algorithm, although created by human beings, cannot compete with the human aspect of sports betting. This includes bettors’ intuition and athletes’ performances from year to year (or week to week). AI predictions that rely on past data could be misleading for punters, since it doesn’t take into account the subtleties of human judgement or gameplay. In sports betting, emotions and situational awareness play a key role. AI cannot replace or replicate these factors.
Sportsbooks need to adhere GDPR-like data protection laws in order to meet their compliance obligations and ensure the safety of users’ data. In an age where AI is constantly evolving, it will be necessary to pay constant attention in order to maintain compliance. It could be especially difficult in the US where there are many regulations and different rules for sports betting.
It’s important to recognize and minimize its risks and challenges. AI can be a game changer for sports betting.
The second installment of this series will look at a few different strategies sportsbooks can use to maximize AI capabilities and leverage its power.
