How AI Can Prevent Problem Gambling in Mobile Sports Betting

July 21, 2022 Stan

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Placing a sports bet or joining an online casino game has never been easier. The evolution of smartphones and mobile app technologies allows you to place bets and play games from any location, even the comfort of your own home.

Currently, mobile sports betting is legal in 25 states and the District of Columbia, while iGaming is available in six states. The numbers will grow as several states have legislation pending on mobile sports betting and iGaming.

As mobile betting grows, problem gambling becomes a significant concern for government officials, healthcare professionals, gaming operators, communities and other stakeholders.

For most people, gambling is a form of entertainment where players control the time and money they spend. However, it can become problematic with potentially serious consequences.

Operators are aware of the need to be proactive and are investing in innovative technologies to reach out to players who exhibit signs of problem gambling. Investment in new technologies is critical to the long-term health of the industry, where further expansion via more states and products rests on operators’ actions in this area.

Developing common standards to identify and manage players who are exhibiting risky behavior has been shown to have no negative outcomes for non-problem gamblers while creating trust with consumers who value brands that elevate player safety, and it helps to create distance between regulated and offshore entities.

Know the odds

In the first quarter of 2022, mobile sports betting and iGaming earned $2.79 billion in revenue, nearly 20% of all gaming revenue. Mobile sports betting accounted for $1.58 billion of that sum.

For gaming operators, a larger user base and adoption comes with greater accountability. As a result, growing revenue streams attract scrutiny, and public sentiment toward the industry will quickly deteriorate as it has in other global markets if they do not see action. Letting risky behaviors go unchecked will invite considerable costs to gaming operators in the form of negative brand equity, stricter regulations and increased friction in the player experience.

Responsible gaming programs are a good start, but placing too much of the onus on the player to gamble safely will not be enough to assure lawmakers and the public that the industry is being proactive.

With innovative technologies like artificial intelligence, operators have access to more data, allowing them to engage players and alert them to the potential signs of problem gambling.

Protecting players

While it’s easy to perceive that protective strategies may impact the bottom line, protecting players — or at least having more interaction with players about their betting activity — garners long-term commercial results that will improve customer loyalty.

Imagine a new user signing up for a sports betting account. They lose $1,000 in the first month, and they decide it’s time to stop and never bet again. Compare that with a player who bets $500 a year over three years. They are a more profitable player than someone who gambles excessively because they are consistent and loyal, and they’ve aligned their bets with their budget to be placed over time.

There’s a strong argument that facilitating more recreational-based healthy behavior is better from a revenue perspective. It improves the user experience and opens the door for referrals, positive reviews and more.

Know your customer

A greater understanding of players and their behaviors allows operators to communicate more effectively with them regarding their play, including sharing information on their betting habits at the right time. Providing players with resources to let them know what they spend over time in order to make informed decisions about their gambling activity is a powerful tool that generates goodwill, positive brand equity and better bottom line revenue from sustainable play.

Operators must securely collect and verify a consumer’s personal information at account registration in order to comply with robust KYC regulations. Identification is the first step to understanding the player, and combining playing habits with identity data is a powerful tool for making responsible decisions.

Understanding an individual’s context is crucial. If a 21-year-old college student with student loans is placing bets over $5,000 every month, there’s evidence of problematic behavior that could have a lasting impact on his financial future. Having this information about a player enables operators to institute specific measures and safeguards such as offering a timeout period or putting deposit limits on users’ accounts.

Operators can also offer monthly account statements to show how much money a player lost (or won) over a month. By making the player aware of what’s happening, they can decide whether they need to put limits on themselves or take a break from gambling. Giving players access to all of their statistics enables them to make more informed decisions.

Market to the healthy behavior

Operators tailor marketing and engagement based on user activity and behavior. They use this to make marketing offers for the sports team a player supports, identify fraud or flag when a player’s account has been compromised and encourage healthy habits by providing responsible gaming materials.

For players who demonstrate risky behavior, technology is now available to identify and mitigate this behavior. For consumers who make the brave decision to self-exclude, operators can move to prevent these players from viewing marketing material within specific channels, making their transition toward no gambling activity much easier as they are not tempted by enticing offers.

To be successful and sustainable in the long term, operators need to continue investing in data and technology that protects players. The path to a sustainable industry requires increasing public trust and assuring lawmakers by demonstrating that player protection is a continuous investment for operators as their revenues grow.

Whether it’s for responsible gaming, marketing or fraud prevention — more data means better choices, healthier habits and loyal customers.