AI in Sports Betting: The Next Frontier? – SportTechie

From a growth perspective, it is easy to see why many believe betting remains asignificant, largely unexplored frontier for Artificial Intelligence (AI) in thesprawling sports industry.Entrenched in sport due to the desire of professional teams togain a competitive edge -- and then gradually filtered into mainstream sportscoverage -- AIs suitability for the highly competitive gambling space wouldappear to be obvious.Nick Cockerill, vice president of product at sports data and analysis providerStats Perform, acknowledges that the adoption of AI in sports betting is currentlya fairly slow burn. However, the direction of the sector suggests it is only amatter 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) wasoverturned in May 2018, paving the way for states to seek regulated sportswagering, most have passed the required legislation -- leading to a major shake-up of the industry. Some analysts project a tenfold increase in nationwide grossgaming revenue through sports wagering over the course of the 2020s.

For this reason, the current outlook is tumultuous, with operators burningthrough 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 anenjoyable and efficient experience is likely to be the key differentiator in buildingbrand loyalty in the long run. In other more mature sports betting marketsworldwide, where acquisition costs are already more manageable, the customerexperience lessons from the US can be learned and applied.

Customer experience in betting is increasingly a battleground, saysCockerill, who previously worked for leading operators like Sky Betting & Gamingand The Stars Group.There has definitely been a shift in the industry over the past few years interms of how to make the experience about more than just the bet. There hasbeen a focus on adding value to the sports betting experience, so it is notnecessarily just directly transactional.

Betting Journey

In practice, AI can potentially assist operators at various steps of the broadersports betting journey, and not just at the stage where a bet is placed. Creatingengaging content such as automated facts, articles, insights, highlights andfootage 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 ofmessage to a certain type of customer via a certain channel at a certain point intime. Or it can be used potentially to ensure an even more tailored approach atthe sportsbook websites front door.

AI will help to make micro adjustments to the customer experience, Cockerillsays. It can take out a menu that isnt needed, for example, or remove certainmarkets from the screen that are irrelevant to the user. It can support a morerecreational betting experience.

Such capabilities feed into the drive for personalization, which lies at the heartof customer engagement strategies in sports betting markets worldwide.Sports betting has been trying to sort out personalization for years, and therehave been fundamental barriers to progress, Cockerill adds.One stumbling block is the fact that sportsbooks often rely on legacy tradingplatforms that are inflexible for the application of modern-day tools. Another is afirst-mover fear of going alone in a sector where small margins and errorsmatter.

Acceleration

Such fears and restrictions do hot hinder operators in the US, though, wherethe fear of missing out is a far more vivid scenario in the rapidly expandingmarket.That evolution into enhancing customer experience will accelerate massivelybecause of the U.S., says Cockerill, who points out how sports media andbetting experiences are growing closer.

The reticence of media companies to align with sports betting doesnt exist inthe U.S. as it is still such an immature market. Many media organizations alreadyuse AI the New York Times is just one example and they have plenty of financialfirepower behind them, so they are natural partners for sportsbookoperators.

Not only are sports media platforms incorporating more betting-related items such as odds and insights in on-screen tickers, conversations and dedicatedprograms but media and sportsbook companies are also aligning from abusiness perspective.

Mergers and acquisitions are creating operations that span both sectors. NBCUniversal has a minority stake in PointsBet, while FuboTV, which agreed a dealto acquire start-up Vigtory earlier this year, has launched a branded sportsbook,as have several other media platforms, such as Fox, Yahoo Sports and BarstoolSports.

Such partnerships have the potential to boost the AI technological capabilities ofoperators that are seeking long-term solutions in a market that -- despite beingbruising in the short term -- is likely to become a benchmark for the sports bettingcustomer experience worldwide in the years to come.The operators that will win in sports betting are those that do not just partnerup with suppliers, but will build their own capabilities with in-house engineers,Cockerill says. Otherwise, they will be hamstrung all the time by limitations ofthird parties. You are seeing some tier-one operators bringing moretechnology in house, and AI is going to be a layer that can implement apersonalized approach for them.

There is going to be a split in the industry of those who adopt AI and thosewho dont particularly in mature markets but I think that if you dont adopt AIin this space, you will be left behind.

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AI in Sports Betting: The Next Frontier? - SportTechie