The industry’s attitudes towards disruptive and emerging tech have changed in the past year. Josephine Watson examines in Part One which technologies are deemed to be the most transformative.
After the great success of the 2020 Futures Report we returned 12 months later to the industry to gauge its feelings towards five disruptive technologies. These are: Blockchain, Internet of Things (IoT), Virtual/Augmented Reality (VR/AR), Artificial Intelligence/Machine Learning (AI/ML), and Edge Computing.
This year, we have broken down AI/ML into three critical business use cases. These are strategic automation, personalized gambling, and responsible gaming.
A panel of experts from Four Wood Capital, RB Capital and SeventySix Capital joined us for our first Futures Survey Webinar last month. They added a new layer of insights to the findings of this year. Chad Stender was the moderator, and was joined by Lauren Seiler (Managing Director, Head of Strategy, Global Corporate Development & Investor Relations at Four Wood Capital), Julian Buhagiar (co-founder of RB Capital), Marcel Tobler (Chief Strategy Officer at Grand Casino Baden) as well as Chad Stender.
Buhagiar summarized the findings of the report with the statement: “We are seeing the death buzzwords.” While 2019 and 2020 were dominated by ML and Blockchain, it’s actually less prevalent now. The majority of this tech is now commoditized and/or less hyped.
It’s important to note that most of the information was fluff to begin with. When you invest in technology, you are investing in one platform. AI/ML or blockchain is just a tool to enable a larger USP.
Tobler said: “There are still too many legacy operators in the industry, which is preventing them from embracing new technology and startups.”
These survey results offer a wealth of detail about how stakeholders in the industry perceive these new technologies and their applicability to the business they run, and the future of the industry.
In the opening question of this year’s survey, respondents were asked to select up to three technologies they believe will have the greatest impact on the industry.
Similar to the results of last year’s survey, the vast majority of respondents viewed the AI applications mentioned above as the most transformative. Personalisation, strategic automation (51.8%), and responsible gaming (51%) were all chosen by respondents.
It is not surprising that AI/ML technologies are being widely adopted and distributed. In fact, there are many machine-learning tools in use today. BetBuddy is a good example. Its capabilities include “identifying and managing at-risk gambling behaviour patterns.”
The potential of transformation for each of these use cases seems to be perceived more equally than it was last year. Personalisation had a clear lead with 62.3% followed by strategic automaton (51.9%) and responsible gaming (RG, 48.2%).
We are focusing on automation in order to increase quality, not to save costs. This is especially true for the compliance area. Tobler stated that if we made a mistake with compliance it could cost us a great deal of money.
Tobler said that the discussion around personalisation is rife with a sense of urgency, but also confusion due to the absence of case studies.
It’s hard to understand, but I feel that there is a lack of personalisation within the industry. This topic has so much potential and will be the most important thing to do in the future.
I’ve seen some cool projects that use RG to improve AI.
Blockchain was rated as the next most transformative technology after AI/ML by 31,8% of our respondents. This is a slight drop from the previous 34% in the 2020 survey.
Seiler believes that blockchain technology will face some major implementation challenges in the next few years. She said: “I believe that blockchain is interesting, buzzy and exciting, here to stay. But from a game perspective, you will start to see some challenges coming through the system. Can you integrate it?”
The technology could also alienate certain demographics who are just starting to adapt to online gaming. “When looking at the user base, and trying to grow it rather than contracting it, it’s important to not scare them away.”
Some of the more advanced technologies may not translate well into our future. This doesn’t mean that they aren’t useful, but just may not fit in this area.
The trends for IoT and VR/AR have completely changed compared to 2020. IoT is now viewed as having a significant impact by 29.41% compared to 12.26% respondents in 2020. Edge computing has also jumped from 5.66% of 2020 to 1412% in 2021.
Buhagiar said that the demand for IoT may be a reflection of improvements made in the data extraction and computing power over the past 12 months. “Part of this can be used to benefit society – such as problem gambling, but we are also beginning to see plans like specific slot RTPs which take into account the processing power of the interface between the user and the slot machine.
The future of edge computing was also brightly predicted by him: “One story that has not been reported, especially in gambling magazines, is just how powerful it’s become during the past 12 months.”
Buhagiar, who sees real-world applications of quantum computing on the horizon as well, predicted a rise in data-centric applications, along with risks like DDoS through AI, and complex deep-fakes.
In 2021, VR/AR was viewed as a transformative technology by only 14.1% of respondents, down from 28.3% in 2020.
Education is a matter of importance
How has the industry’s education evolved in relation to these disruptive technologies? We asked respondents this year to choose only one of the three possible answers, instead.
Opinion has not changed much in some instances, like blockchain. Blockchain was the answer that received the highest number of votes, with 27,1% saying the industry didn’t understand or thought it irrelevant.
The knowledge of AI/ML seemed to be increasing, though. AI/ML to promote responsible gambling received 9.41%, the highest of all three options. AI/ML in strategic automation or personalisation, however, was deemed not understandable by the majority of respondents (5.88%). The figures were a marked improvement over the previous year.
AI/ML, and the use cases it enables, were previously on a par with other technologies, barring blockchain. However, their ranking as three of our least selected options in 2021 shows that there has been a marked increase in knowledge about them.
Interesting, VR/AR’s applicability, and its understanding, seems to have deteriorated over the past year. It has narrowly edged IoT (17.65%), to be the second least understood technology, behind Blockchain (18.82%).
Our panel of experts were not surprised by the decline in VR/AR’s applicability. Buhagiar commented: “VR/AR has always had a difficult time monetising.” We’ve tested it and found that it didn’t work well in the gambling industry.
Only 15.29% of the respondents considered edge computing irrelevant this year.
Home of Innovation
We also asked our respondents to give us more information about how the industry is expected to evolve in its use of technology.
Stender said that the audience of the webinar was told by him that it is no longer possible to ignore innovation. “Either you innovate, or acquire. Or else your bum will be kicked.” Entrepreneurs are always thinking of ways to create a solution which will need to be acquired.
The US has seen Caesars buy William Hill, and then MGM/Entain fall apart. The deals may take many months, or even years, to come together.
In response to the question of how likely it would be that their company build an in-house system using disruptive technology, 30,6% chose “very likely” and 14.1% said this was only somewhat likely.
Tobler, referring to a project that was recently completed at Grand Casino Baden said: “We built our platform to be able to choose what to incorporate in the future. There is so much potential in the world – good ideas are everywhere. We want to work with startup companies to integrate these ideas into our B2C offerings.
It helps us choose which startups to invest in. “Is the promise of solving a problem for us working?” We ask. It’s important to ask if we’ll be able to integrate this in the near future. Will it have value from a regulatory, customer, or retention perspective? The igaming sector doesn’t have to be solved by this.
The respondents then highlighted the disruptive technologies that they most likely would use in-house. AI/ML was cited by 51.4% as the most probable use case, particularly for automation and personalisation of processes. Comparatively, the potential for VR/AR solutions in-house was only 11.43 %. Blockchain came in at 8.57 % and IoT was at 5.91 %.
Seiler stated: “From an investing perspective, we are more focused on the things that drive consumer retention. The question is whether to build or purchase.
Other technologies, such as data science, facial recognition and AML solutions were also a focus for the remaining 22.8% of respondents.
For 34.62%, the agency route was their preferred option, followed closely by the 30.77% who chose the internal approach. Other respondents suggested that M&A (26.92%), or a combination of approaches (7.69%) was the best option for their business.
Buhagiar warned operators to avoid internal innovation just for its own sake: “Don’t use disruptive technologies without a need.” It is then necessary to hire rockstars to lead your product development team to find a monetisation strategy.
He said that because technology changes and adapts so rapidly, the cost to invest in internal development is often greater than the return: “There are many startups out there that offer specific solutions.” You can use many open-source libraries for free. Do not try to build technology if there is a distinct, clear absence from the outside.
Working with startups is one way to integrate and leverage disruptive technologies. 36.47 % of respondents indicated that their companies would very likely work with startups if they offered a complement to existing products or solutions. 42.45 % said it would be somewhat probable. Overall, only 4.71% reported a negative view of working with startups.
We asked the respondents which startups that were compatible with igaming presented an opportunity for their business. Future Anthem was mentioned as a company that provides a machine learning solution to assist customers in growing responsibly by using game data science. Synalogik, for its Scout software, gathered, cleaned and analysed data automatically.
Part 2 of Tech Futures’ survey and report dives deeper into the areas where respondents believe AI/ML will have the biggest impact, and how regulation can drive the adoption of new technology.
