AI in Sports Betting: The Next Frontier?
From a growth perspective, it is easy to see why many believe betting remains a significant, largely unexplored frontier for Artificial Intelligence (AI) in the sprawling sports industry. Entrenched in sport due to the desire of professional teams to gain a competitive edge -- and then gradually filtered into mainstream sports coverage -- AI’s suitability for the highly competitive gambling space would appear to be obvious. Nick Cockerill, vice president of product at sports data and analysis provider Stats Perform, acknowledges that the adoption of AI in sports betting is “currently a fairly slow burn”. However, the direction of the sector suggests it is only a matter of time before it becomes a central tool in the battle for market share.
US Opportunity
One reason for this is the size of the opportunity in the United States. Since the Professional and Amateur Sports Protection Act (PASPA) was overturned in May 2018, paving the way for states to seek regulated sports wagering, most have passed the required legislation -- leading to a major shake-up of the industry. Some analysts project a tenfold increase in nationwide gross gaming revenue through sports wagering over the course of the 2020s.
For this reason, the current outlook is tumultuous, with operators burning through cash at an extraordinary rate to gain a foothold, sending cost-per-acquisition figures into orbit. However, the general consensus from operators is that providing an enjoyable and efficient experience is likely to be the key differentiator in building brand loyalty in the long run. In other more mature sports betting markets worldwide, where acquisition costs are already more manageable, the customer experience lessons from the US can be learned and applied.
“Customer experience in betting is increasingly a battleground,” says Cockerill, who previously worked for leading operators like Sky Betting & Gaming and The Stars Group. “There has definitely been a shift in the industry over the past few years in terms of how to make the experience about more than just the bet. There has been a focus on adding value to the sports betting experience, so it is not necessarily just directly transactional.
Betting Journey
In practice, AI can potentially assist operators at various steps of the broader sports betting journey, and not just at the stage where a bet is placed. Creating engaging content such as automated facts, articles, insights, highlights and footage is possible, although some of the approaches are “still in their infancy”,Cockerill says.
AI can also provide a simple instruction to an operator to send a certain type of message to a certain type of customer via a certain channel at a certain point in time. Or it can be used potentially to ensure an even more tailored approach at the sportsbook website’s ‘front door’.
“AI will help to make micro adjustments to the customer experience,” Cockerill says. “It can take out a menu that isn’t needed, for example, or remove certain markets from the screen that are irrelevant to the user. It can support a more recreational betting experience.”
Such capabilities feed into the drive for personalization, which lies at the heart of customer engagement strategies in sports betting markets worldwide. “Sports betting has been trying to sort out personalization for years, and there have been fundamental barriers to progress,” Cockerill adds. One stumbling block is the fact that sportsbooks often rely on legacy trading platforms that are inflexible for the application of modern-day tools. Another is a first-mover fear of going alone in a sector where small margins and errors matter.
Acceleration
Such fears – and restrictions – do hot hinder operators in the US, though, where the fear of missing out is a far more vivid scenario in the rapidly expanding market. “That evolution into enhancing customer experience will accelerate massively because of the U.S.,” says Cockerill, who points out how sports media and betting experiences are growing closer.
“The reticence of media companies to align with sports betting doesn’t exist in the U.S. as it is still such an immature market. Many media organizations already use AI – the New York Times is just one example – and they have plenty of financial firepower behind them, so they are natural partners for sportsbook operators.”
Not only are sports media platforms incorporating more betting-related items – such as odds and insights in on-screen tickers, conversations and dedicated programs – but media and sportsbook companies are also aligning from a business perspective.
Mergers and acquisitions are creating operations that span both sectors. NBC Universal has a minority stake in PointsBet, while FuboTV, which agreed a deal to acquire start-up Vigtory earlier this year, has launched a branded sportsbook, as have several other media platforms, such as Fox, Yahoo Sports and Barstool Sports.
Such partnerships have the potential to boost the AI technological capabilities of operators that are seeking long-term solutions in a market that -- despite being bruising in the short term -- is likely to become a benchmark for the sports betting customer experience worldwide in the years to come. “The operators that will win in sports betting are those that do not just partner up with suppliers, but will build their own capabilities with in-house engineers,’’ Cockerill says. “Otherwise, they will be hamstrung all the time by limitations of third parties. You are seeing some tier-one operators bringing more technology in house, and AI is going to be a layer that can implement a personalized approach for them.
“There is going to be a split in the industry of those who adopt AI and those who don’t – particularly in mature markets – but I think that if you don’t adopt AI in this space, you will be left behind.”
