If you’re looking to better understand the effect artificial intelligence (AI) has — and will have — on the sports betting industry, do yourself a favor and talk to Lloyd Danzig.
As managing partner at Sharp Alpha Advisors, Danzig knows that of which he speaks. The New York City-based venture capital firm invests in early-stage companies in the sports and gaming sectors.
Sharp Alpha’s roster of companies includes Rimble, a developer of esports betting prediction models and analytics, and Kero Sports, an in-game betting solutions provider. How do these companies currently utilize AI to impact the sports betting industry?
“Rimble uses computer vision to turn esports and cricket video streams into game-state data feeds, and then runs that data through machine learning engines to produce real-time odds,” Danzig told Gaming Today.
He added, “Kero Sports leverages human-led reinforcement learning to surface and price contextually relevant micro-betting opportunities for operators in real-time.”
For those of us who don’t know an algorithm from a biorhythm, that makes perfect sense, right? That’s why we rely on the insights of people like Danzig, who took time out to educate us via email exchanges during recent travel for shareholder meetings.
AI Is No Stranger to the Sports Betting Industry
You wonder where all this technology is taking us, but it’s important to understand first how AI is already used by sportsbooks.
“Artificial intelligence has been playing a significant role in the gaming industry for several years with particular focus on tasks that are rooted in pattern recognition such as oddsmaking, risk management, audience segmentation, recommendation engines, and fraud prevention,” Danzig said. “In this context, the AI revolution is well underway.
“Generative artificial intelligence, the specific technique popularized by products like ChatGPT and Midjourney, has more recently captured the world’s attention, as it provides a path to many new use cases across industries.”
Will It Be Man or Machine in the Future of Sports Betting?
In talking to bookmakers, it’s hard to imagine a sportsbook ever trusting AI to completely handle lines and movements. Perhaps that’s just a lack of imagination or sheer ignorance, but more than one oddsmaker has expressed frustration with European vendors that automate props and micro markets.
“History is littered with experts who drastically and, in retrospect, comically underestimated the capabilities of automation,” Danzig said.
That begs another question. Will AI serve as a complementary force that always requires human watchdogs, or is it capable of powering the entire industry by itself one day?
“While some narrow tasks will be completely outsourced to AI agents, just as they are already outsourced to more primitive forms of automation, businesses will remain a collaboration between man and machine for the foreseeable future,” Danzig said.
Sharp Alpha invested in FanPower, a company that uses generative AI to “instantly produce SEO-optimized content en masse for affiliates.” That, of course, hits really close to home if you’re a writer-editor type working for an affiliate in the sports betting industry, and hoping not to be made obsolete in 10 years.
“Mass market keyword-optimized affiliate content will be almost exclusively produced by generative AI engines in the near future,” Danzig said.
Well, shoot. But wait. …
“More nuanced, culturally complex content will take much longer to disrupt, particularly that which contains humor, sarcasm, topical references, and unique perspectives,” he said.
There’s hope for the future.
“Companies like Almost Friday Media and Barstool Sports are not likely to cede editorial control to the robots any time soon,” Danzig added.
How Will Sports Bettors Benefit From AI Moving Forward?
Do you know what a large language model (LLM) is? Google revealed that it’s a type of AI algorithm that helps predict new content and outcomes. Deep learning is involved, among other things that will blow your mind if it’s anything like mine, but the important thing for sports bettors to know is that chatbots might be their best friends moving forward.
“Chatbots powered by the new generation of LLMs should vastly improve the customer service experience,” Danzig said. “Many sports bettors will increasingly turn to chatbots to aid in the bet discovery process, which will decrease decision fatigue and increase customer satisfaction.”
So, the assumption (hope?) is that AI will be able to guarantee a certain level of betting success in the future. Never assume.
“AI will never guarantee success at sports betting, just like a blackjack strategy card does not guarantee success in the casino,” Danzig said.
We still have so much more to learn.