Super Bowl LVIII is set. When the Kansas City Chiefs and San Francisco 49ers meet on Feb. 11, they will do so at Allegiant Stadium in Las Vegas—the undisputed global capital of sports betting. Before last year’s game, the American Gaming Association estimated that more than 30 million Americans would place a legal bet on the Super Bowl—up 66 percent from 2022 and expected to surge even more this year.

But, despite the Super Bowl’s location this year, the Vegas sportsbooks aren’t where much of the action on the game will take place. In the states where it is legal, online sportsbooks led by DraftKings, FanDuel, BetMGM and Caesars will have users compulsively checking their phones and making bets for the next two weeks and even during the game—with AI driving a complete transformation of the experience.

According to Statista, between 2018 when the Supreme Court cleared the way for states to legalize online betting and 2022, sports betting revenue grew from less than half a billion dollars annually to more than $7.5 billion. So, there are lots of people out there making lots of bets, peaking over the next two weeks. Like the tango, however, it takes two to wager: one party makes the bet and one party takes the bet. And, in the online space, both parties are relying on AI for an edge.

The Bettors

The online sportsbooks have made betting more convenient than it has ever been. Millions of amateur bettors who once made wagers on the game with friends or maybe bought a few squares are turning to their phones and making bets with legal sports books, sometimes for significant stakes. And they’re all looking for information that will help them cash in.

Bettors have traditionally looked to human experts for that information—an entire industry has grown up around delivering that information to bettors through all types of media. But with the massive publicity around Chat GPT and other generative AI technology, people are more familiar with and comfortable working with AI tools, opening a new avenue to optimizing betting.

Chat GPT itself has been an invaluable tool for bettors. Increasingly, betting platforms are integrating Chat GPT or other generative AI that give bettors access to improved predictive accuracy, it can surface betting patterns and identify helpful trends, and it can provide personalized betting strategies.

Some notable tools that incorporate either generative AI technology or predictive engines relying on proprietary models include RebelBetting, Zcode System, StatisticSports, SportsBetting AI, Gameday AI, NeuroBetting and many more. AI is useful for sports bettors in the same ways it is for businesses—it enables the analysis of massive amounts of data, including historical game results, player statistics, injuries, weather conditions, and other relevant factors to generate insights, predictions and strategies.

The Books

For the sportsbooks that make the markets and take the bets, the usefulness of AI mainly involves improving the user experience and generating more bets. The books certainly use AI for its predictive ability, but volume is the most important consideration.

In a recent interview with InnoLead, Paul Liberman, president of global product and technology for DraftKings, said the Boston-based betting service has been using AI to personalize certain aspects of its UX since shortly after it got its start as a fantasy sports site in 2012. Liberman said the technology made wading through the hundreds of contests easier for users and also applied it to marketing.

“As we’ve done more work in personalization, machine learning and AI, we’ve seen our cost for customer acquisition come down quite a bit,” he noted.

With the introduction of generative AI, though, Liberman says the number of applications for AI at DraftKings has grown quickly. The site is using it mainly to enhance operational efficiency—identifying and fixing coding issues faster, automating simple procedures, etc. It is also starting to apply the technology to enhance marketing through copy and image generation.

“But really across the board, our team is taking a step back to say, ‘How do we improve our operational efficiency? How do we deliver value to customers and shareholders faster?’ There are a lot of companies out there, there’s a lot of products, and this space is heating up quite quickly.”

Welcomed by All

So both sides of the wager are betting on AI to make them better. And both sides, perhaps surprisingly, are embracing the efforts of the other side. While it makes sense that bettors accept the implementation of AI by the books—a cleaner, faster experience that presents more options for betting—it perhaps isn’t as intuitive that the sites would welcome the use of AI by the bettors.

Conventional thinking might suggest that bettors who use AI predictive algorithms to process vast amounts of data related to betting and produce very intelligent forecasts leading to more winners would not benefit online sportsbooks.

The opposite is actually true. If customers have a better shot at winning, the sites will attract more people to play. And, just as it has always been for in-person betting at casinos, their goal is to equalize the betting on both sides and collect the “vig”—the small percentage they charge for taking the bet. Predictive analytics in legal online betting powered by AI means all sides are playing with better information, leading to more participation and an industry that might be poised for even more explosive growth.