Casinos can do more with AI than enhance customer service and replace humans, experts say

But ‘there just isn’t that much money’ in compliance

By Dana Gentry

Nevada Current

From kiosks designed to speed customer check-in to vibrant casino games, Nevada’s tourism industry is putting artificial intelligence to work. But one of AI’s potential best uses — its ability to assimilate massive amounts of data and identify patterns that could detect fraud and money laundering — is taking a back seat to automating table games and replacing bartenders.

“AI is being used on the operations side, but not necessarily on the compliance side,” says attorney Michael Beckwith of Dickinson Wright, who is speaking Tuesday at the Global Gaming Expo in Las Vegas about maximizing the ability of AI to analyze massive amounts of data, discern patterns, and detect other cues valuable to casinos in preventing fraud and money laundering. He says casinos are already employing AI technologies for those purposes “but not on the large scale, and not the most cutting edge technology.”

The hang up, according to Beckwith, is a perceived lack of profitability in ferreting out fraud.

“There just isn’t that much money in it,” he says, adding investment in AI is likely “to go to the operation side of casinos first. Eventually, if there’s a benefit there, maybe it filters back to compliance.”

A study published by MIT found most efforts to grow revenue via AI are a bust, with only about 5 percent of AI pilot programs driving substantial increases in revenue.

“Most projects die in pilot purgatory. Meanwhile, headlines are warning of an ‘AI bubble,’ and some investors are shorting AI stocks on the idea that generative AI’s big enterprise moment is already stalling out,” Forbes reports.

AI, and its subfield, ML (machine earning), a form of AI that uses algorithms to learn from data, recognize patterns, and make predictions, are used by some casinos. Their use by compliance executives and crooks remains a double edged sword for the gambling industry.

In casinos, AI can speed up ‘Know Your Customer’ protocol via biometrics and rapidly analyze identification sources. It can identify customers with a history of criminal activity. Additionally, it can monitor transactions to flag efforts to avoid cash reporting thresholds, and large cash deposits that are cashed out in casino chips after minimal play. It can also reduce work for compliance executives by automating Suspicious Activity Reports.

Criminals, on the other hand, are upping their game through the use of AI.

In Vietnam, a gambling ring evaded biometric ID measures by generating deep fake videos courtesy of AI, and online gamblers have been known to create fake identities, complete with forged documents, for the purpose of opening accounts.

The International Gaming Institute at UNLV intends to “explore everything from the opportunities of the technology for the industry to the risks of the technology as well,” says Kasra Ghaharian, IGI’s Director of Research. “How is the industry currently using AI? How are they thinking about using it? What do they think is going to be the impact on the workforce? Where are they seeing significant returns on their AI investments?”

Additionally, IGI wants input from policy makers and regulators to learn if gambling regulation is equipped to deal with the technology in “upholding regulatory principles such as keeping gambling safe and protecting the public from potential harms,” Ghaharian says. He warns that operators must be deterred from crossing ethical lines in which AI is used to exploit vulnerable gamblers.

IGI’s findings are expected to be released in a report to be presented next year at the International Conference on Gambling and Risk Taking.

“While AI is still a developing technology, its capability to identify behavioral patterns and transactional anomalies in real-time could potentially help analyze betting trends and movement of funds across platforms that could be beneficial in combatting (sic) money laundering,” Nevada Gaming Control Board chairman Mike Dreitzer said via email.

Crime pays

Despite the potential assistance from AI, not all casinos are eager to throw out ‘undesirable’ players.

“It’s the casino’s job to make sure that they keep unwanted people out. And if they’re not, it’s almost like they’re letting tainted money come in,” illegal bookmaker Matt Bowyer told the Current last week, just days before he is scheduled to report to prison to serve a one-year sentence for money laundering.

Bowyer, an associate, and another illegal bookie, Damien LeForbes, lost close to $24 million in ill-gotten gains at Resorts World in a little more than two years. The casino, which intentionally altered records to conceal Bowyer’s source of income, according to a complaint filed against the casino by regulators, incurred a $10.5 million fine from the Nevada Gaming Commission.

“Resorts World made $14 million but I’m going to prison,” Bowyer observed.” I was committing a different crime than they were, but what they did is still a crime. Let’s be real. They were definitely allowing money laundering. They were allowing illegal bookmakers to play.”

Dreitzer of the GCB declined to comment when asked whether the state’s fine was sufficient to deter licensees from allowing gamblers to play with dirty money.

Under President Donald Trump’s administration, an anticipated non-prosecution agreement between Resorts World and the DOJ has yet to materialize.

Beckwith, a former prosecutor for the Eastern District of California, acknowledges AI “is only as good as the humans overseeing it. And we want human oversight. Red flags may come up and they may be ignored, but there’s going to be a history of them. The records are easily attainable, like a bank record. Using AI would likely encourage better behavior.”

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Dana Gentry is a native Las Vegan and award-winning investigative journalist. She is a graduate of Bishop Gorman High School and holds a Bachelor's degree in Communications from the University of Nevada, Las Vegas.