The House That AI Built

Last night the Los Angeles Dodgers secured their 8^th World Series title in a thrilling comeback victory against the New York Yankees. In the hours leading up to the game, baseball fans and sports commentators debated whether or not the Yankees—who had lost the first three games of the series—would still be able to win the series. History was not on their side, since no team in major league history has ever come back to win the World Series after going down 0-3. Even a franchise as exalted as the Yankees wasn’t able to rewrite that history. 

However, while today’s headlines will focus on either the triumph of the Dodgers or the collapse of the Yankees, few (if any) headlines will report on the countless American sports fans who are suffering emotional despair and financial ruin as a result of AI-powered online sporting betting. 

Historically, professional sports leagues have adamantly opposed legalizing sports betting. They believed it would lead to corruption and game-fixing which would undermine fans’ confidence in the sport. After all, sports’ unpredictable nature is one of its most captivating characteristics. However, as certain sports betting companies rose to prominence in the wake of a 2018 Supreme Court decision, professional sports leagues couldn’t resist the promise of new revenue streams derived from advertising and industry partnerships with sports betting platforms. 

Since the Supreme Court decision, 38 states have legalized sports betting. Over $300 billion have been spent on sports bets in the US over the last 5 years—with an average of 16 million adults betting on sports daily. Thanks to massive investments in marketing and advertising, sports betting has now become synonymous with the fan experience and obscure gambling terminology has now become commonplace in sports bars around the country. 

But what’s so wrong with adults betting on their favorite teams to make the fan experience more enjoyable? The problem is that online sports betting platforms—powered by AI systems trained on massive sports datasets—possess an inconceivable advantage over the average consumer while consumers have little to no protection or recourse against these platforms. 

There are private companies whose sole job is to buy data from every sports league. These companies then use AI to process all the data and repackage it before selling it to sports betting platforms who then use the data to set their betting odds. These models are highly sophisticated and allow platforms to update odds constantly which ensures that “the house will always win”. But sports betting platforms take it a step further. In addition to analyzing massive amounts of data on teams and players, sports betting platforms also track multiple datasets on every user. This data is used to customize their experience to ensure they place as many bets as possible. Like social media platforms before them, sports betting apps are constructed with one central goal: keep the user on the platform for as long as possible. 

Sports betting apps do this by creating enticements (promotions, free bets, matching bets) and manipulating their users until they get hooked. But unlike social media apps, sports betting also incorporates real-life financial stakes into the user experience. Combine the already-addictive nature of phone apps with the additional addictive lure of AI-powered gambling and the recipe spells disaster for many consumers. 

Since 2018, the rates of gambling addiction have drastically increased. Calls to gambling hotlines have doubled and even tripled in some states. Gambling addiction is classified in the same category as alcohol and drug addiction. But out of all the addictions, gambling addicts are the most likely to commit suicide. There are more than 8 million people who are currently struggling with some form of problem gambling in the US. But you’d never know it from the glamourous, celebrity-filled sports betting ads that have been running constantly throughout the World Series. 

If you or someone you know is struggling with problem gambling, please check out the resources available here or search for gambling support groups in your area. 

In sports, there is always only one winner. One fan base feels elated and the other feels dejected. Then, eventually, everyone moves on with their lives. This is the rightful cycle of sports and fandom. But with the introduction of AI-powered online sports betting, the relationship of fans to sports has been forever transformed. What’s the next industry that AI will super-charge and how quickly will AI transform the nature of that industry? Who will suffer the most harm from these innovations and what responsibility should AI developers and tech platforms take for the harmful impact of their products? 

At CAIP, we will continue to champion policies that advance safety, responsibility and accountability for the design, development, and deployment of AI. Learn more here.