2023 was a great year for the iGaming industry. We saw businesses embrace AI technology, eSports amass millions of viewers and record-breaking fines issued by regulators worldwide. These exciting, challenging, and opportunistic developments make for great chapters in iGaming’s story. With the year upon us, we’re looking ahead at five big trends that are going to shake up the iGaming industry in 2024.
Businesses will use AI to shield themselves from AI fraud schemes
If artificial intelligence (AI) hadn’t made itself known to everyone in 2022, it certainly fought to be centre stage in 2023. As more companies welcome AI into their internal operations and business offerings, AI fraudulent activity continues to rise, impacting businesses in multiple ways. Cyber criminals are crafting fully-fledged AI-powered fraud schemes that could collectively cost iGaming businesses millions—if not billions—of dollars in damages.
Yet, as much as AI might seem like a big problem, it offers some excellent solutions to help push back against fraudsters. AI can shield companies from fraudulent activity in a number of ways. Adding AI tools to identification verification processes can help ensure that only legitimate customers are onboarded. AI can also identify any new customers that might be serious red flags, giving companies more power to protect their platforms from fraudsters. Once a player is onboarded, a dedicated AI program can assess early account behaviour for signs of potential fraudulent activity. This might include an AI model that can identify behaviour patterns by the player very early on the user journey, even before they’ve begun to properly engage (and potentially abuse) the platform’s services and products.
For the percentage of cyber criminals that do slip past the early detection AI shields, they’ll have to face a whole host of different AI programs that are continually analysing player behaviour to look for signs of fraudulent activity. We expect to see a rise in multi-faceted AI fraud protection schemes to help combat fraud on multiple fronts. This includes programs to specifically address bonus scheme abuse, chargeback fraud, account takeover, affiliate fraud, gnoming, and chip dumping. Whilst technologies currently exist to identify fraudulent activity and block players, AI brings a new edge to the line of defence. AI technologies can empower the industry to take proactive measures to protect against fraudulent activity before it occurs and help mitigate the risks and losses associated in the instances where they become victims of fraud.
In-game machine learning (ML) personalisation will improve player experiences
Personalisation is a growing trend across multiple industries made possible with AI, and in particular, with a subset of AI called machine learning. Machine learning models continuously learn through each individual interaction they have with the user, making it possible for them to improve task performance with each learning experience.
iGaming companies can feed users’ data into machine learning models, to personalise their individual users’ experiences, making their interactions and experiences much more rewarding. For example, a user may log into their iGaming app and be presented with a uniquely personalised homepage containing content that has been collated using insights from the player’s unique tastes and preferences. Players will be greeted by content, offers, and games that they’ve previously shown interest in, enabling them to engage with activities that they enjoy much faster. Companies can also use their models to suggest new content, which in turn helps the AI models learn more about player preferences through the player’s response to the suggestions.
For the best experience, companies can use interconnected machine learning models, also called an artificial neural network, which are multiple models programmed to collaborate together. Connecting a family of AI, ML, and predictive analytics models enables them to “talk” to each other. They can share their learnings on player preferences in the context of wider player responses to trending events, team scores, time-based features and even analyse and share preferences from wider audience segments to market new products and services. The end result will be a continual personalisation optimisation program, with dedicated models within the network providing real time insights into consumer behaviours and suggestions for increasing customer retention and engagement.
The industry will prioritise player welfare protection
Within any consumer-facing industry, there is a constant need to find the balance between providing incredible experiences to consumers and also protecting consumers. Gambling operators have already had their fair share of penalties over the years; the global industry was slapped with a whopping US$442.6m (€402m, £347.7m) in fines last year. These are often the result of failures in compliance, AML and social responsibilities. Penalties don’t just hurt financially, they have tangible consequences on individual companies’ reputations and the overall industry’s reputation too.
The iGaming industry has already undertaken considerable efforts to protect their players’ welfare, with responsible gaming and consumer-awareness campaigns working to deter unhealthy player behaviours and improve business practices. AI has already been introduced to help protect gamblers in the past, for example, an AI-powered program introduced in 2019 to betting shops locked players out of games if erratic or excessive behaviours were detected. Fast forward five years, and the accessibility of iGaming via smartphones combined with the growing use of AI and the implications that come with it mean that companies will have to prioritise player welfare more than ever before. New player welfare schemes and practices will be designed to safeguard not only the more vulnerable customer segments, but everyone enjoying AI-powered iGaming in 2024.
Additionally, we’re anticipating a new burst in research activity, with more research undertaken on the intersection of AI and iGaming, to give companies and regulators more guidance on how to build gaming policies to protect players and companies operating in an AI world. This would help the industry find a way to balance commercial interests with consumer protection, foster long-term, healthy relationships with responsible players, and identify and support players at risk of developing unhealthy relationships with gambling.
Gamification will expand within the iGaming industry
Gamification, in-game gambling and even gamblification are terms often used synonymously. Each of these offer great opportunities to iGaming companies when leveraged effectively. Whilst in-game gambling stands to offer its own set of opportunities, especially if AI can improve player experiences by providing personalised invitations to participate during live sports, it is completely different from gamification and gamblification.
Gamification is the process of applying game mechanics, principles, and elements to non-game contexts to improve user experiences, engagement, and user performance. In other words, gamification helps to acquire and engage users’ by treating them as players in a gamified experience. In the world of iGaming, gamification could be a great tool for encouraging responsible gaming habits or playfully educating players on content related to their online gambling preferences.
Gamblification is something of an umbrella term that is repeatedly used in a mishmash of different contexts, however it essentially refers to the introduction of gambling activities to non-gambling activities. The term emerged in 2000, a period during which gambling at sporting events became so popular and profitable that commercial sports betting began to play a powerful and very central role in sport finances.
In general, we expect to see more gamification emerge in the iGaming industry as companies use it to enhance things like in-game gambling experiences. We also anticipate the convergence of gamification with AI machine learning in iGaming spaces. This application of AI and gamification technology will fuel a growth in sports, entertainment, and iGaming markets, all of which is made possible through gamblification.
eSports betting will continue to grow
eSports (electronic sports) is growing at a phenomenal rate, causing correlative growths in both tournament size and betting figures. The multiplayer online battle arena (MOBA) game League of Legends end of season event drew in 1.55m viewers in 2016, making it the most popular eSports tournament of the year.
The eSports market was valued at US$1.45b in 2022, and is predicted to grow to US$6.7b in 2030, cementing itself as a market that is here to stay. This is good news for the eSports betting market, as the market value for 2024 is US$2.5bn, making it the largest segment in the eSports market.
We expect to see a continued growth in services and products offered to eSports gamblers, as companies tap into the growing fan base that is fueling the expansion of the eSports industry.
Summary: Will 2024 be the year of AI, & rising regulation?
This year will no doubt bring plenty of opportunities. AI stands out as a key tool for addressing the major challenges that the industry faces, from enforcing fraud prevention to enhancing player protection. The industry is predicted to continue to grow through 2024 and with regulator fines up 42.3% in 2023 compared to 2022, companies are likely to be taking seriously proactive steps to stay off regulators' radar. Equally, we’re sure to see some regulators issue more huge fines and introduce a range of regulatory updates too. Still, iGaming is a tenacious and exciting market, with plenty more to give, and we’re excited to watch the growth continue into—and beyond—2024.
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The information provided in this article was accurate at the time of publishing. This information is not to be used for trading, investment, legal, financial or any other form of business advice.