An AI Revolution May Forever Transform the Gaming Industry

Artificial intelligence (AI) is becoming a transformative force in the gaming industry, with companies like DraftKings, Light & Wonder, and Marriott leveraging the technology to enhance their offerings and operational efficiencies. According to Jefferies Equity Research analyst David Katz, these firms stand at the forefront of AI integration in gaming and hospitality.

AI Can Significantly Streamline Operational Processes

A recent investor note saw Katz revisit a June 2023 white paper that explored the potential impacts of AI on gaming and hospitality. He highlighted several innovative applications, such as using AI to enforce responsible gambling by automating the process of cutting off players who bet beyond their financial abilities, which aligns with state-level regulations.

DraftKings, a pioneer in AI investment for over a decade, exemplifies the potential of AI in the gaming industry. Katz suggests that AI could significantly reduce DraftKings’ 500-person trading team and improve promotions by predicting long-term customer value more accurately. He sees AI as a game-changer in customer service, which dominates odds-setting and operating expenses.

“Having the most advanced technology in the competitive OSB market could drive differentiation over time.”

David Katz, Jefferies Equity Research analyst

Light & Wonder is another company embracing AI, with CTO Victor Blanco leading the initiative. The company uses AI to optimize manual tasks and enhance slot machine math models, ensuring the creative element provided by talented designers remains central to their business. Light & Wonder hopes to capitalize on emerging trends to stay ahead of the competition and sustain its momentum.

The Technology Has Broad Applications

Marriott International, a strategic partner of MGM Resorts International, highlights how AI can empower the hospitality sector. The company is taking a cautious yet optimistic approach to the technology, exploring its potential to personalize travel experiences, facilitate hotel bookings, and improve customer service. Marriott retains some ethical considerations, soliciting employee feedback on AI usage and taking measures to ensure proper accountability.

Katz emphasized the potential of AI to enhance customer service by proactively predicting and addressing issues rather than requiring customers to seek solutions themselves. The technology can also significantly streamline market analytics, with innovative solutions promising accurate data to help businesses make informed decisions and leverage emerging opportunities.

As gaming industry pioneers continue to explore and integrate AI technologies, the industry is poised for significant advancements and efficiencies, offering a glimpse into the future of gaming and hospitality. The technology should also spearhead new developments in gambling harm prevention, revolutionizing operations, customer service, and personalized experiences.