DETROIT – Whether you work in the online betting industry or just enjoy placing bets on your favorite team, you cannot fail to have noticed the changes that have been occurring over the last twelve months. The legal sports betting industry has had no choice but to find new ways of creating revenue because of the huge drop of sporting activity that has occurred during 2020 and 2021.

What many people don’t realize is that bookmakers are using artificial intelligence (AI) and internet of things (IoT) technology to make many decisions for them, rather than relying on their human employees. Both these terms can be used to describe many specific techniques, so we will only be discussing some of those which are having the biggest impact on the online betting industry. Let’s dive in.

The Future of Data Storage and Management

Artificial Intelligence has been a buzzword in the electronics industry for decades. Many older readers will remember the iconic moment that IBM’s Deep Blue beat world chess champion Garry Kasparov for the first time. Our younger readers are more likely to recall the day that Google’s AlphaGo was successful in scoring a shock victory over the world Go champion Lee Sedol.

In both contests, bookmakers’ odds suggested that the betting public largely favored the humans over the computers in both matches. As a result, it would be fair to guess that the bookmakers made huge profits from both competitions.

The question is, how did they do it? The full details have been published many times before elsewhere, but the most important thing to understand is that whilst Deep Blue relied on pure brute force, Google took a different approach by creating a system intended to mimic the way that humans learn to play games instead.

Both systems require enormous amounts of processing power, but Google’s approach also requires an astonishingly large data set to feed its neural network which then performs the machine learning tasks required to train the AI. The potential of these types of neural networks was quicky spotted by large businesses – including bookmakers.

The Problem with Large Scale Data Storage

Data storage used to be a huge problem for IT departments at the world’s largest companies. Old data had to be moved onto large capacity tape storage as it was much too expensive and needed far too much space to keep everything on physical racks of hard disks inside a data center. Tapes have a very low cost per MB but there is no way to quickly search and retrieve individual files from such media as they have no capability to access specific files and data, usually referred to as random access.

Once the internet began to take off in a big way, data storage requirements increased exponentially. For sites such as those providing streaming video, online betting Virginia & other US states, and web-based e-mail for millions of users, tape storage just wasn’t going to cut it.

Thankfully, hard drive manufacturers rose to the challenge and eventually managed to invent new ways to increase the capacity of the drives. Unfortunately, this situation is still not completely resolved at present as of 2022.

For years, companies have relied on being able to store more data in the same amount of space each year, but capacities have reached a plateau at around 20TB per 3.5” drive which is proving difficult to surpass. Hard disk manufacturers promise that their in-development technologies will soon allow them to manufacture drives with capacities of 50TB or more, but if these technologies fail to materialize, we may soon be heading for a huge problem finding ways to effectively store the world’s data.

The Internet Knows You Better than You Know Yourself

So, imagine you are a bookmaker with employees, outlets and websites dotted all over the world. Up to 90% of the games and events that you usually offer wagers on have been cancelled or postponed indefinitely – how does your business survive?

You cannot fail to have noticed the popups on every single website asking you to accept their tracking cookies the first time you visit them these days. These tracking cookies are used in dozens of ways, but advertisers and social networking sites are especially interested in collecting as much of this data as they can.

Machine learning and neural networks can then be used to study the resulting enormous data sets, looking for hidden patterns or intrinsic structures which would be far too difficult for humans to locate and connect. Every site with an advert of a “share via Facebook” button uses these tracking cookies to monitor what you are doing to on the web, enabling them to build up a large profile of your interests, opinions, political persuasions, and many more personal and private details.

The networks will eventually suggest possible wagering opportunities based on real-world opinions and preferences gleaned from data sets that feature the personal thoughts and opinions of hundreds of millions of people. Political bets, eSports, gamified slots, VR/AR enhanced live casino games… these are just a few of the suggestions that the neural networks were able to identify as things that would interest their current player base.

Privacy Concerns vs The Benefits of IoT & AI

Does it worry you that your personal thoughts and opinions are being used in this way? Do you appreciate the convenience of being able to verify your age and identity just by inputting a few simple personal details, or does it worry you that the government feels comfortable verifying your identity so easily based on the information they already have?

As scary as some interesting to you personally?

How about casino comps? Do you prefer to be offered the generic options – perhaps a room upgrade, even though you already have a better room – or something which has been tailored and crafted to your own unique needs and situation?

Casinos are continuously tracking the data retrieved by all internet connected devices (IoT) and using this data to train their AI networks, so they know which games are going to be interesting to the maximum probable number of their players.

The odds being offered to players can also be updated in real-time, dramatically improving the experience of in-play betting. Better yet, the data can also be used by support staff to help them in providing the best possible assistance with any problems that you encounter.

In Conclusion

Without these technologies, it is possible that some bookmakers could have gone out of business over the past two years. UK bookmakers have already been struggling with new regulations lowering the stakes they are able to offer in their high-street shops, resulting in hundreds of store closures.

The US states who are legalizing online betting appear to be studying the progression of gambling regulations all over Europe including the UK and attempting to learn from the mistakes being made on the other side of the Atlantic. This can only be a good thing for online bettors in the USA. With the support of Europe’s most experienced bookmakers, America has the opportunity to get this right when they implement their new rules and regulations from scratch.

Let’s hope that they do.

This column was written by Catalin Constantin.