AGS GameON: AI-centric operators stand to reap knowledge and profits

June 20, 2023 8:30 AM
Photo: CDC Gaming Reports
  • Mark Gruetze, CDC Gaming Reports
June 20, 2023 8:30 AM
  • Mark Gruetze, CDC Gaming Reports
  • United States

No offense to gaming conferences, but they’re not necessarily the best place to learn how technology can improve casino operations, a gaming-conference speaker said.

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Attending a technology forum targeted at retailers would be an eye-opener for casino operators, Gaming Analytics, Inc., Founder and CEO Kiran Brahmandam told attendees of the AGS GameON conference on June 14 in Reno.

“A retailer’s job is to optimize square footage for product, pricing, and placement and they do it at scale. A casino’s job is the same thing: product, pricing, and placement,” Brahmandam said. “Fundamentally, it will help you change the way you look at your marketing, your decision making, everything that you do in the organization.” The National Retail Federation, for example, sponsors the annual Nexus conference for senior-level technology, marketing, and digital innovators.

Brahmandam said operators who become AI-centric, compiling terabytes of data from multiple types of customer interactions and using artificial intelligence to sift it for insights, will increase revenue and customer satisfaction.

“The key here is that it’s really easy to make a sale when you can predict what the customer wants,” he said. For example, Amazon makes 35 percent of its revenue from its recommendation engine, which suggests products based on your purchases.

In an AI-centric organization, “The humans’ job is to define the goals and define boundaries on what this technology can and cannot do,” he said. “And the AI executes it.”

Just as Amazon now sells almost everything in addition to the books it started with, casinos have so many offerings besides slot machines and table games that “customer touch points are all over the place.” AI is capable of sifting through the data from all those areas to determine what type of customer plays a particular game and can improve game placement by grouping those with similar characteristics.

He said AI is “really good” at jobs that are efficiency-based and involve repetitive tasks. “When you think about AI, the instant image that you get is it’s the ‘Star Wars’ kind of experience, where you have intelligence beyond our current brains. But there’s another set of AI that actually works at the same level as humans, but does it really fast and doesn’t take vacations or get sick.”

Most decisions about which slots are placed on a casino floor and how they’re grouped in banks and zones are made without considering who actually plays them, because that level of detail typically isn’t available, Brahmandam said. Grouping games with similar denominations, paybacks, play modeling, and most importantly, the type of players they attract has increased session times by 8 percent to 19 percent, he said.

Suppliers offer strong strategies on how to bank machines. “But the point that’s missing is you don’t know what the players actually want,” he said. Those favoring high-volatility machines want energy and excitement, while those preferring lower volatility want to play longer. “We’ve seen that there’s an imbalance between what players prefer and want versus the supply of those games.”

Brahmandam said Gaming Analytics has found that 83 percent of its customers had a volatility imbalance on their slot floors. Volatility is difficult to define, with manufacturers not agreeing on a standard. He said Gaming Analytics devised a volatility ranking for all slot games in the industry, so floor managers could make more informed purchasing decisions.

While the gaming industry is posting high revenues now, Brahmandam said that “we’re leaving a lot of money on the table,” due to inefficiencies. “What has worked for the past 20 years will not scale for the future, because you guys are running your business differently.”

For the industry to grow overall, casinos must expand their offerings. “The entertainment dollar is where you grow the pie,” he said. “Historically, the pie has gotten bigger when you had more casinos opening, or companies were just eating each other’s lunch, meaning the pie relatively stayed the same. If you want to grow the pie, you’re going to have to get outside what you do now.”

Becoming an AI-centric operation can make the difference, he said. “Imagine a world where you say, ‘Hey, can I get an extra 3 percent coin-in for this month?’”