How casinos have turned to artificial intelligence to boost profits
Artificial intelligence is here and it is being used by casinos to study and predict human behaviour.
In the enduring quest to grow profits, casinos have turned their focus to a new and growing technology called artificial intelligence or AI. This revolutionizing technology is being used to squeeze as much money as possible out of players through optimisation and targeted marketing campaigns to entice players to spend more.
But what is artificial intelligence? Artificial intelligence is the use of computers to replicate the cognitive functions associated with the human brain that can include the ability to solve problems and to learn. There is a strong belief in the legitimacy of this technology as a moneymaking vehicle, so much so in fact that technology giants like Microsoft, Amazon, Facebook and Google have invested in this capability. Companies are using AI to predict human behaviour in order to sell more products and they have got so good at it that customers are unlikely to even notice that this is happening. In this text today we look at AI and its relevance to the world of gambling.
Detecting the most lucrative players
Of course, advancements in this technology have not gone unnoticed by online and land-based casinos as the number of specialised AI start-ups continue to grow. One such start-up from Boston is called DataRobot which is specialised in helping casinos to predict player behaviour using AI as well as to survey the operations for optimum slot machine and table game locations. The software learns all about player habits in order to maximise the amount of money spent.
Another AI start-up is called Optimove which is designed to optimise a personalised customer marketing approach. By analysing a casino’s client database, they are then able to perform an analysis in order to predict player behaviour so that they can categorise them into segments. A casino can then use a loyalty automation solution and marketing to maximise the return from these players. This technology has been adopted by a few casinos including MGM and Caesars in the US, 888 Casino as well as Adda52.com in India.
We’ll also find another start-up, this time based in San Francisco, called Ikasi which uses a predictive technique to identify the biggest gamblers. By biggest they mean most profitable and most valuable. Once again technology studies the player’s habits including the frequency of visits, style of play and amounts wagered. This then allows the casino to predict the amount of money spent and lost for each player. The aim of this is to encourage players to return or keep them playing by using a personalised marketing campaign which might include special offers, hotel discounts or other sweeteners.
Finding the winners and losers
Because of the inherent unpredictability of players and their contribution to a casino’s profit, casinos are turning to AI technology to identify players with a higher probability of beating the house. They can then use these players as a live marketing tool to future players.
We can learn more about AI and how it is used in online and land-based casinos here.
The use of RFID chips and facial recognition software
AI does not just stop at trying to predict player behaviour when it comes to casinos. In fact, some land-based and online gambling casinos go to the next level when it comes to identifying and encouraging big gamblers through special perks and offers. There are casinos in Macau that use cameras incorporating facial recognition technology in combination with poker chips that use connected RFID chips. This allows them to track customer behaviour and their game. The purpose once again is to maximise the amount of playing time using targeted incentives. Software can be used to classify players according to buckets of risk appetite to not only to maximise profit but also to adhere to regulatory requirements.
One particular system called Dallmeier is being used to identify potential high rollers and other more devoted players with the capacity to lose more and play longer. Dubbed a high-value customer, the software is designed to notify casino staff when such a player has been identified so that they can be pampered with VIP treatment. The system can also be used to detect fraud such as collusion between a dealer and player.
In closing, AI is no longer a topic of science fiction. It is here and it is real! It is being used right now to maximise the amount of profit that land-based and online casinos make. While there is a potentially darker side to the technology, as some might argue that it is manipulating players and feeding their addiction, it does have the potential to also benefit players and, of course, casinos.