Artificial intelligence is not merely a passing fad – something that we are all too familiar with. It has claimed centre stage, and is simply refusing to step out of a spotlight that could see industry dynamics changed forever.
“It’s like having a very, very powerful machine gun. You need to know how to use it. Otherwise, you may shoot yourself in the feet”. That is the warning shot fired to the gambling industry by SBC Advisory Founder & Business Development Director and 1xCare Advisory Committee Member, Quirino Mancini, as the topic continues to dominate.
In the first of a two-part SBC News special, Mancini looks at the current state of affairs, what actions need to be taken by regulators to ensure that any future effectiveness is wiped out and how the industry can truly harness this immense potential.
AI: an EU outlook
AI has certainly not exploded onto the scene all of a sudden. This is far from something new. The technology is firmly embedded into day-to-day operations worldwide.
The issue that is being tackled by regulators and authorities does not concern if it should be used, but, more crucially, how this can be done in a responsible and effective manner.
“I was in a panel (at SBC Summit Malta) and the topic was the impact of AI on the gaming industry in the wake of the implementation of the EU AI Act,” Mancini began.
“The various speakers that were coming from different jurisdictions, including North America, all converged and agreed that the impact is going to be quite significant, because AI is a very powerful tool.
“It can be used in a binary way. The EU AI Act mandates the use of AI when it comes to gaming business to detect any problem gambling issues, to analyse behavioral patterns, etc.
“But once you collect that kind of information by the AI tools, you can also use it for a completely different purpose, which is profiling players and then coming up with a highly customised offer, because you know what they like, you know their preferences,” he comments.
“For instance If they like bingo, you can package a nice sign-in bonus for them if they play more. That’s what I mean when I say binary use of these very powerful tools that are associated to AI.”
Can regulators collaborate on AI?
Despite the progress being made, it is natural that a slight fear is bubbling under the surface. An air of wariness and caution is evident at the potential future actions of those in power that could eradicate progress.
Looking at what recommendations would be made should it look like the future effectiveness of AI across critical areas could be wiped out, Mancini stresses that regulators ought to adopt commonly shared principles and criteria to discipline its use.
“This is not happening at the moment because while some regulators, for instance the Malta Gaming Authority, have come up with a charter which spells out exactly the guidelines for their licensees to use AI, others have taken a lighter touch approach by simply directing their licensees to exploit AI tools too for purposes of fulfilling mandatory compliance obligations in a more effective way”, he says.
Malta’s proposal will complement existing legal and regulatory frameworks – including the aforementioned EU AI Act – while also implementing specifics within the wider context of gambling.
According to the MGA, the charter will be designed to provide voluntary, principles-based guidance to support the responsible and transparent use of AI within the sector.
“Other regulators are less explicit,” Mancini explains. That’s the case for instance of the Italian regulator who generically requires licensees to tackle responsible gambling “also with the use of AI’.
“However, such a broad statement triggers a few consequential questions like: “How am I supposed to use AI? To what extent? Within which boundaries? That is not specified.”
The ideal scenario envisioned by Mancini of all regulators converging and agreeing on certain broad lines of engagement at the moment is more wishful thinking than anything else, and the way to a minimally harmonised approach to AI regulations-wise is still long and challenging too.
“I don’t know whether we will ever get there, because some regulators are a little bit reluctant to innovation and new situations that they have to regulate,” Mancini shares. “They are very conservative in their approach.”
Humans vs AI?
As businesses across numerous industries look at AI to improve results, it is natural that gambling is seeking to be at the forefront of this movement.
It is fully understandable, Mancini remarks, that also gaming operators aim to use AI to maximise the performance of the services they are offering, profits they can generate, and a more effective exploitation of the data they can gather and process through AI.
“The issue is that we cannot have a situation where there is a wild use of this very powerful machine,” he says.
“There must be some rules of engagement to prevent the Far West of AI. Regulators need to tell this industry what they can and cannot do.”
With this in mind, attention is diverted towards ‘an important requirement’ in the EU AI Act,” Mancini concludes.
“This concerns human oversight, which is hailed as essential as, despite the immense potential, humans cannot and should not be replaced with machines altogether as they will need to be ultimately monitored, controlled and checked by a human brain.”