By Gary Steveson
Research into robots and artificial intelligence has captivated imaginations for decades. Variations of bingo have been around for centuries. And cell phones have served as a gaming platform at least since the 1980s. So what brings these seemingly divergent topics together: gambling. As gambling bots become more and more proficient, they are threatening to disrupt the world of online poker. At the same time, online bingo and mobile gambling are leading a dramatic expansion of the online real-money gambling marketplace. This paper tackles all of these issues while also taking a look at the legal climate for online gambling in the United States and abroad.
The term gambling bots – as they are typically referred to by players – includes a variety of automated programs used to play online games such as poker without direct input from a human (Golle & Ducheneaut 2005). These bots may be acting based on a pre-programmed algorithm although newer bots using neural networks have shown the ability to learn new strategies rather than being tied down to a static approach (Eggert 2013, 12. Regardless of the specific technique, gambling bots rely on this artificial intelligence to play games previously considered the sole domain of human gamblers. The strategy behind these non-human bots is two fold. First, by allowing a larger number of hands to be played without personal supervision, bots can increase gamers’ winnings (Ward & Jennas 2012, 2). Second, these bots implement a strictly rational approach which is in marked contrast to the often emotional and ill-advised strategy employed by the novice gamblers prevalent in online poker (Golle & Duchenaut 2005). New developments such as utilizing neural networks rather than algorithms allow bots to simulate billions of hands and actively learn from the results of each hand (Eggert 2013, 12). This has led to bots which can bluff and detect bluffing rather than simply acting based on mathematical probabilities (Eggert 2013, 12). One of the most acclaimed bots – the Vex Bot developed by researchers at the University of Alberta – has actually defeated master poker players in a heads-up contest (Brunker 2004).
As expected, this improved ability to defeat human players has led to resentment from the online poker community. Poker is typically depicted as a game of skill, requiring players to assess an array of complex factors to make an intuitive decision (Golle & Duchenaut 2005). For some players the introduction of a non-human bot disrupts that ecosystem by giving an unfair advantage to the cool, calculating machine (Golle & Duchenaut 2005). However, gambling bots can actually be used to help players improve their strategy. Some companies explicitly market their bots to beginners as a straightforward way to gain experience playing hands while receiving feedback on their strategies (Eggert 2013, 13). In fact, bots are already used in a similar manner by chess and backgammon players to boost their game (Eggert 2013, 13). Perhaps the real reason players dislike bots is simply because they feel like there is an information asymmetry when players do not know they are facing a computer. This situation persists because companies are loath to announce when they detect bots utilizing their gambling platforms (Eggert 2013). Their reasoning is two fold: announcing how a bot was detected essentially gives programmers a blue-print for avoiding detection in the future (Eggert 2013, 15). At the same time, announcing the presence of a bot – even if it has already been dealt with – could undermine gamblers confidence in the provider and push them towards a competitor (Eggert 2013, 15). As a result, there are few accurate statistics regarding the prevalence on bots in online gambling.
The use of bots is not without its drawbacks either. To begin with, most gaming sites explicitly prohibit the use of such programs. As a result any deployment of a bot would constitute a violation of the Terms of Service and provide grounds for the forfeiture of any winnings accrued by the bot (Altman 2013, 13). A related risk is that of detection. Many players will utilize the online chat features in an effort to detect the presence of a bot in the room – a non-human player will not be able to converse naturally (Ward & Jennas 2012, 3). Of course, this method of detection is not foolproof as some human players may choose not to respond to chat messages in order to create the impression for other players that they are actually a bot (Ward & Jennas 2012, 3). Players may also report suspicious betting patterns indicating the use of a bot (Brunker 2004). However, this creates the possibility that an actual player could be falsely accused by rivals seeking to remover them from the room (Altman 2013, 23). As a result, gambling providers typically take into account the length of a player’s history and overall betting patterns before acting on such accusations (Altman 2013, 23). Although it seems unlikely, there is also the risk that a bot will lose money due to a faulty strategy (Altman 2013, 14). For that reason, some players actually embrace playing against a bot – believing that they can use its own strategy against it.
In terms of legality, there is some murkiness regarding the use of gambling bots. In the United States, there is a divide between state or tribal regulation versus Federal regulation (Eggert 2013, 4). Some consumer protection advocates have insisted that the issue of bots needs to be decided at the federal level in order to offer equal protection to consumers regardless of where they live (Eggert 2013). Two approaches suggested are forcing sites to detect these bots themselves and publishing a ratings system for all players (Eggert 2013, 14 & 16). In the case of the first option, experts admit that such an expectation is likely unrealistic for the reasons discussed above. The risk of players being removed due to false positives is also quite unpalatable for companies (Altman 2013). As for publishing a ranking system of each player to ensure that players know their opponents’ skill levels, many pros have publicly claimed that this will hurt the game by de-emphasizing the necessary skill of assessing an opponent’s abilities (Eggert 2013, 16). Additionally, actual prosecution of bot operators would likely prove difficult as the computers could be programmed to destroy evidence or even mimic human betting patterns (Eggert 2013, 13). House Resolution 2666 was introduced in 2013 with the goal of combating the use of gambling bots, but so far no concrete action has been taken (Eggert 2013). Meanwhile in Sweden, the state authorized gambling monopoly – Svenska Spel – is seeking the return of approximately $1.5 million from bot operators who it claims defrauded other gamers (Eggert 2013, 11).
Bingo has long been a staple of retirement communities, but its online equivalent is proving to be a substantial source of revenue for gambling providers. In recent years, online bingo has blossomed into a big business and actually represents the fastest growing sector of the online gambling marketplace (KPMG 2010, 6). In the European gambling market, an independent assessment found that sports betting claimed the largest market share at 32 percent of total gaming revenue followed by online poker and bingo at 15.5 percent apiece (Gambling Data 2012, 4). Although poker, blackjack, and slots may be more recognizable gaming offerings, some companies generate as much as 70-80% of their revenue from bingo alone (Gambling Data 2012, 14. Bingo’s growth is driven in large part by the heavily social aspect of bingo compared to other forms of online gambling combined with the increasing comfort levels with internet gambling in general (KPMG 2010, 6). Due to the heavily social aspect of bingo, gambling operators emphasize the online chatting feature (India PRwire 2012). Chatting is designed to appeal to the major demographic base of online bingo operations – women between the ages of 23 and 40 with small children (Smith 2013, 6). Currently, the largest global market for online bingo is found in the United Kingdom (KPMG 2010, 6. However, markets such as Spain, South American and Eastern Europe are poised for significant growth according to industry observers (KPMG 2010, 6).
Another selling point for online bingo is its relative simplicity. Players can choose between flash games and download games. Flash games are usually hosted online and players can join games almost instantly from any internet connected device (Playmore Bingo 2014). Download games on the other hand require some type of gaming client to be downloaded from the specific provider (Playmore Bingo 2014). In terms of gameplay there are a variety of games and features offered. Many players participate with multiple cards simultaneously. As a result, bingo operators have introduced features like autodaub which ensure that a player does not miss out on prizes due to forgetting to mark their card (Haozous 2013). The two most common game types are 75-ball and 90-ball bingo. 75-ball bingo utilizes a 5×5 card with each column corresponding to a letter and number combination (State of Minnesota 2012, 84). Typically the combinations are B (1-15), I (16-30), N (31-45), G (46-60), and O (61-75) (State of Minnesota 2012, 84). The software’s random number generator chooses a series of these combinations and marks each player’s card accordingly. Depending on the specific game, players can win by forming vertical, horizontal, or diagonal lines, filling up the entire card, or forming more complicated patterns such as chevrons (Texas Lottery Commission 2012). The 90-ball version utilizes a 3×9 card (Addagaming Ltd 2013). Players can win by filling one line, two lines, or the entire care – known as a full house – depending on the game (Addagaming Ltd 2013). Naturally, the highest payouts are reserved for the full house (Addagaming Ltd 2013). There are other variations such as 30 and 80-ball bingo, but they are less prevalent than the two versions previously mentioned.
Online bingo has failed to take-off in the United States due to legal restrictions on online gambling. The Unlawful Internet Gambling Enforcement Act (UIGEA) was passed in 2006 to prevent Americans from participating in real-money gambling online. In a tactical move, the bill was inserted into the national security focused Safe Ports Act at the last minute to circumvent opposition (Rychlak 2011, 1241). The new law was modeled after the prior Unlawful Internet Gambling Prohibition Act of 2003 as it focused on the transfer of money to online gambling services rather than on the provision of the gambling services or act of gambling itself (Conon 2009, 1159). That is, the law imposed penalties on banks and credit card operators who transferred money to the accounts of any online gambling provider (KPMG 2010, 7). In effect, this choked off the possibility of online bingo in the US as players were unable to deposit funds or collect winnings. Although the law allows an exemption for certain activities such as fantasy sports leagues due to the level of skill required to succeed at them, this loophole does not apply to bingo (Conon 2009, 1160).
If the introduction of the internet revolutionized online gambling, the next revolution is likely to mobile gambling. Mobile gaming has been popular ever since people started playing Snake on their phones in the 1980s, and now gambling companies are poised to take advantage of that potential market (Chowfla 2010, 42). Instead of being tied to a computer, today gamblers can access some of their favorite offerings from their smartphone, tablet, or other mobile device (William Hill PLC 2014). This type of gambling appeals to the smartphone customer base comprised of younger, tech-savvy individuals (Smith 2013, 17). With 3G networks abounding in many parts of the world, consumers already use their phones for online banking, stock trading, and other serious pursuits (KPMG 2010, 6). In light of that, it appears to be only a matter of time until mobile gambling experiences a similar widespread acceptance. In fact, mobile gaming is already the fastest growing segment of the online gambling market (William Hill PLC 2014). Since virtually everyone has access to a smartphone or tablet, it is easy to see why this mode of gaming has become so popular.
However, gambling on mobile devices is not without serious drawbacks. As mentioned earlier, one of the most important features of online gambling is its sense of communal interaction built through the chat function (India PRwire 2012). However, the limited screen space of mobile devices means that it can be problematic for players to simultaneously participate in chatting and gameplay (Smith 2013, 17). Another potential concern is the increased likelihood of a disruption of service compared to traditional online gambling (Jakobsson, Pointcheval, & Young 2011). Any mobile gambling platform must be careful not to either reward or penalize players if their gameplay is interrupted due to a loss of service (Jakobsson, Pointcheval, & Young 2011). This includes a method of returning players to the exact point in the game at which they were interrupted (Jakobsson, Pointcheval, & Young 2011).
Mobile gambling providers have also faced some pushback from the titans of the mobile application marketplace – Apple and Google. Until recently, Apple banned any sort of real-money gambling application from its app stores (McCarthy-Brain 2012). Apple has since reversed its position allowing companies like Big Fish Gaming to introduce consumers to their popular applications (MacMIllan 2012). At roughly the same time, Google reversed its stance and banned real-money gambling applications from its Google Play store (McCarthy-Brain 2012). This has led gambling developers to focus on iPhone rather than Android apps (McCarthy-Brain 2012). On the legal front, mobile gambling providers in the United States run into the same problems with UIGEA discussed earlier. In recent years, both Visa and Mastercard have cracked down on customers attempting to use funds for online gambling (KPMG 2010, 7). As expected, this has had little to no effect on the growth of mobile gambling outside the United States.
Like any other sector of the economy, the online gambling market is consistently faced with new challenges and opportunities. While gambling bots are almost universally dislike by players, improvements in the bots’ artificial intelligence is likely to thwart detection and deterrence methods. However, accepting their continued presence may transform the game in ways that end up protecting consumers such as published skill ratings. The growth of online bingo and mobile gambling offers similar promises but is unlikely to bear fruit in the United States without serious legal reforms. Either way, the development of the online gambling industry promises to be as full of excitement as the games the companies offer.
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