UNLV Study: Casinos Are Struggling to Turn AI Into Action

^{Slot players will likely be the first to experience AI on the casino floor. (Photo: Marc Meltzer / Casinos.com)}

During G2E last year, it seemed like casino executives were just learning what AI could do for their businesses. A new study from UNLV shows that not much has changed.

The State of AI in Gaming report notes that gambling companies scored only 45 out of 100 on the AI Maturity Index. While the industry wants to use AI, it still lacks the infrastructure and expertise to do so properly.

"What the data shows is a clear gap between ambition and execution," said Rick Arpin, executive editor and KPMG U.S. gaming lead.

Casinos Still Trying to Figure Out AI

The media regularly reports on how AI is being used across all facets of life. Casinos are a different story.

Fewer than half of the gaming companies studied say they have a formal AI strategy to use for current projects. It comes as no surprise that land-based casinos, including those in Las Vegas, lag behind their online counterparts worldwide.

One of the biggest challenges is integrating AI into casino operations and existing systems. Casino rewards programs face similar challenges and are roughly five years behind in terms of technology.

That said, the industry isn't ignoring it. “Flexible loyalty points programs” rank third in AI patents for the gaming industry, though it will likely still be years before they reach consumers.

There will be positives and negatives when casinos learn to integrate AI into their rewards systems. Casinos will gain deep insight into a player's habits, both on the floor and potentially beyond it, but they'll also be able to offer more personalized and useful rewards in return.

Don't expect changes anytime soon. The report says marketing has "not yet become a clear priority" despite its potential. The gaming industry is more focused on cutting costs and improving efficiency than on driving revenue growth. That’s a rarity as prices continue to increase for everything from hotel rooms to burgers in Las Vegas.

Currently, only 20% of companies report achieving meaningful returns from AI. Most don't expect a return on their AI investment for at least two years.

The talent pipeline helps explain the lag. Nearly half of the companies surveyed say they have plans for AI-specific hiring, suggesting much of the workforce buildup is still ahead.

Expect to See AI Used in Slots First

AI remains mostly behind the scenes in the gaming industry. Gamblers will likely encounter it through gaming manufacturers before they see it used by the casinos themselves.

The study shows more patents have been filed for AI applied to slot machines than any other casino game.

Beyond the games themselves, there are significant patents for network gaming and server systems, which are used to link slots with large progressive jackpots. There are also patents for game math and RNG control, which governs house edge and return-to-player settings in slot machines.

The broader implementation of AI in machine games will likely contribute to more misleading slot revenue data in Nevada.

AI is already in use at online casinos, and sports betting holds the second-most patents among casino game categories. Online gamblers should already be noticing improvements in game and bonus recommendations, a trend that will only improve for both players and operators.

Table game players will likely be the last to feel AI's impact. Patents exist for smart tables, a concept that was first introduced more than 15 years ago with little success. Perhaps the next wave will be more appealing.

Progressive jackpots are a growing segment of table games, and AI figures to elevate that further. There are numerous patents covering bonuses and jackpots in this space.

Patents also exist for smart shoes, which allow dealers to distribute cards more quickly. Since the house holds a mathematical edge in every game, more efficient shoes mean more hands per hour, and faster losses for players.

The Bottom Line

At G2E, casino executives and gaming manufacturers had a noticable difference in their understanding of AI. Manufacturers seemed to have a better grasp of the technology, and that gap doesn't appear to be closing by much.

The gaming and casino industry still has a long way to go when it comes to AI. For better or worse, a paradigm shift in the casino experience isn't coming anytime soon.