Like many sectors, AI hype has swept across betting and gaming. The technology has been earmarked by many as vital to the future of a range of operations, from marketing to odds management.
However, although AI has been deployed across multiple operational areas by numerous gambling businesses, there have been hurdles on the roadmap – and the technology’s revolution has endured a somewhat stuttering start so far.
Anecdotally, AI adoption has been relatively sluggish in comparison with other sectors – although context is crucial.
While chief executives in the wider business world almost universally view AI as a potentially transformational tool for their enterprise, two-thirds of them still do not have an operating and business model fit for an AI-driven world.
That’s according to Gartner, who conducted a survey that found less than 30% of AI leaders reporting that their CEOs are happy with the return on AI investment so far, although this was partly attributed to staff skillset shortfalls.
Additionally, a new study by the renowned Massachusetts Institute of Technology (MIT) revealed that only 5% of AI pilot programmes achieve sharp revenue growth, with the vast majority delivering negligible impact on the bottom line.
Inevitable growth
However, few disagree that AI’s omnipresence in business is inevitable – and sports betting will be no different.
A recently published UNCTAD (United Nations Conference on Trade and Development) report projected that the global AI market will rocket from $189 billion in 2023 to $4.8 trillion by 2033 – a 25-fold increase in just a decade.
Furthermore, even if betting operators have been relatively cautious about the impact of AI, there is growing evidence that bettors are increasingly interested in arming themselves with the technology.
A new study by YouGov found that one-third of 18 to 34-year-old bettors had used AI over the past year to help make ‘gambling-related decisions’, with a further 19% of the age group saying they will consider doing so.
When questioned specifically about utilising AI for sports betting, a whopping 43% of 18- to 34-year-old bettors said they are likely to use AI for wagering decisions in the next 12 months. Indeed, this was not an approach adopted solely by younger bettors, with a quarter of 35- to 54-year-olds in agreement.
Gauging the appetite
Given this backdrop, and the scalability challenge that every operator faces in an increasingly cluttered and competitive landscape, it is inconceivable that AI’s influence will not grow considerably in the coming years.
Real-time sports data solutions provider LSports is one company that is well positioned to gauge the increasing appetite – and need – for AI. According to LSports’ newly released Quarterly Data Report, global sports betting data consumption soared by 19% year-on-year in the second quarter of this year, largely thanks to emerging leagues and esports, illustrating the scale of the growth in the space.
LSports’ chief product and technology officer Daniel Netzer believes the trajectory is clear – and those who remain reliant on traditional, manual systems will ultimately be left to count the cost of their caution.
“Traditionally, the gambling industry has moved at a slower pace,” Netzer says. “Compared with other tech-driven sectors like cyber, the risk of losing customer trust has often outweighed the potential benefits of innovation. That’s made operators cautious, preferring stability over radical change.
“But in recent years, technologies like computer vision, machine learning, AI, data analytics and personalised engagement are forcing the industry to adapt much faster. I believe we’re reaching a tipping point where operators must be at the cutting edge to deliver superior experiences. Those relying on legacy systems will be left behind.”
Different expectations
There are, of course, countless examples of AI being utilised in the gambling industry, with early adopters of the technology having been investing in such innovations for several years.
“We already see it everywhere, from player engagement and personalisation to sportsbook and mobile apps that adapt to user preferences,” Netzer adds. “At LSports, we use AI in trading operations, fraud detection and automating repetitive, high-volume tasks.
“Where a sportsbook might once have offered 100,000 events a year, some now offer over two million. That scale requires AI at every level: player segmentation, customer service, chatbots and more.”
With AI’s tentacles stretching into an ever-increasing array of operational areas, it is only a matter of time before its deployment stretches more consistently into a customer-facing setting – particularly among younger gamblers in sports betting.
“Gen Z users are coming into sportsbooks with very different expectations,” Netzer explains. “They don’t want to sift through an entire esports or sports event – they want highlights, push notifications and data-driven insights linked to key moments.
“AI is the only way to process tens of thousands of events in real time, surface those insights and deliver them instantly to players. On the operator side, as in-play betting grows, AI will ensure prices remain accurate, risks are flagged and any anomalies are corrected in real time.”
Keeping the human touch
One challenge facing operators – and indeed any business – is to strike the right balance between innovation and maintaining control. There is a broad acknowledgment that losing the human touch would be potentially problematic, and therefore AI should be used to augment human decision-making, rather than replacing it.
For instance, Netzer believes AI sports betting will not completely replace traditional manual sportsbook systems.
“As a technologist, I’d love that idea, but I have to be realistic,” he says. “The risk of relying entirely on automation is too high. The expertise of traders and risk managers is not something AI can replace overnight.
“AI will certainly replace many traditional processes in terms of speed, accuracy and scalability. But in a highly regulated industry like gambling, a full replacement isn’t likely in the near future. What we’ll see instead is AI handling core processes – automated odds calculation, risk flagging, alerts – and surfacing insights to human experts, who then make the final calls.”
Finding the ‘sweet spot’
Netzer adds that the “sweet spot” should be to use “AI for efficiency and humans for empathy”, with the latter focusing on relationship-driven work like VIP management, dispute resolution and strategic decisions that require cultural or ethical judgement.
“AI should automate data-heavy, time-critical tasks like large-scale player behaviour analysis,” he says.
“I expect to see more human-AI feedback loops, where AI provides insights and humans validate and contextualise them. That way operators achieve operational excellence while still building trust through human engagement.”
Netzer cites cybersecurity and healthcare as examples of sectors that are navigating the challenge successfully.
In cybersecurity, trust and customer success depend on strong human engagement, while the software itself has to be “bulletproof”. Meanwhile, he adds, gambling can learn about transparency and ethics from healthcare, with operators building trust through responsible practices to ensure data is safe, compliance is rigorous and customers are protected.
‘Gen Z users are coming into sportsbooks with very different expectations’
Future-proofed for AI
For sportsbooks planning ahead for such opportunities, the priority is to ensure they have a flexible, data-rich infrastructure so that their platforms are future-proofed for sports betting AI.
“Operators need unified data sources, high-quality data, cloud-based architectures for rapid deployment and modular systems where AI components can be added or swapped easily,” Netzer explains.
“At LSports, we’ve spent the past three years future-proofing our infrastructure and architecture so we can adopt new technologies quickly and deliver benefits to clients as soon as they emerge.”
Netzer adds that removing restrictions around official data rights would be a significant step, unlocking opportunities for innovation.
In July, LSports CEO Dotan Lazar insisted that the exclusive agreements that underpin the sports betting data battleground need to be scrapped if the space is to become sustainable for sportsbooks, sports rights-holders and the data providers themselves.
“It would be similar to what we’re seeing in generative AI, where open-source models have driven incredible innovation,” Netzer explains. “In just six months, the progress has been equivalent to a decade of advancements in other technologies.”
Embedded at every level
With next-generation solutions on the horizon, AI is set to become a foundational layer in every sportsbook’s strategy, from pricing models and personalisation to real-time engagement and predictive analytics.
The onus is on sportsbooks to establish the infrastructure, nurture the talent and build the trust required around emerging technologies to maximise the opportunity at hand.
Five years from now, Netzer believes AI will be “embedded at every level” of sports betting – from automated trading desks settling bets in milliseconds to hyper-personalised customer journeys that anticipate needs before they are expressed.
Responsible gambling is also expected to shift from a reactive to predictive footing, so that operators can identify at-risk players early and intervene appropriately. Meanwhile, compliance will become continuous and automated, reducing errors and improving reporting.
Netzer is particularly excited by the opportunity to leverage AI in combination with other technological innovations.
“With advances in augmented reality and virtual reality, fan engagement will be far more immersive,” he says. “AI will be invisible to the user, but indispensable as the ‘co-pilot’ behind the scenes.”
Daniel Netzer, chief product and technology officer at LSports
Daniel Netzer, chief product and technology officer at real-time sports data solutions provider LSports, explains how AI will play an integral role in the future of sports betting – and operators that fail to seize the opportunity will be left behind.