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As artificial intelligence infiltrates almost every aspect of business, it has long played a significant role in the gaming industry with low-level AI monitoring player data, enhancing responsible gambling programs and identifying fraudulent activities.

But with more advanced AI capabilities on the market that some argue is on par with, or even passes, human intelligence, industry executives believe it has become crucial that regulators try to understand the technology, as well as implement regulations to oversee its ethical use in the industry.

“You can’t implement regulation out of ignorance; you have to educate,” said Earle Hall, CEO of AXES.ai, an IoT-based cloud information management platform in Las Vegas and chairman of the International Gaming Standards Association (IGSA).

Hall, who played a key role in IGSA’s decision to establish an Ethical AI Committee, said part of the committee’s education campaign will be publishing one-page papers, like those issued by the United Nations, stating its position on various issues regarding AI.

“The very first step of this Ethical AI Committee is to make our industry aware that you are either for ethical AI or you are against it because you can’t sit on the fence,” Hall told VIXIO GamblingCompliance during a interview.

Hall said he understood that his position could be polarizing to some in the gaming industry because there are “those who are intent on becoming educated and those that don’t care at this stage.”

Hall added that there also needs to be some parameters to make sure the industry adheres to basic ethics, as well as some hardcore standards when it comes to certifying technology that uses AI.

Among its responsibilities, the Ethical AI Committee of the IGSA will curate AI algorithm fairness standards for global gaming markets, with the objective of making sure that any decisions made by AI influenced systems are fair and equitable to human users.

When asked if the gaming industry had been cautious about using AI, Hall agreed, saying the land-based casino business is generally “a defensive industry when it comes to innovation,” but “when you look at the online world, it’s totally different.”

In terms of brick-and-mortar casinos, he attributed their cautious behaviour largely to the fact if you put a slot machine or table game on the casino floor, and it generates the budgeted amount of revenue, “the risk of taking it off the floor to put something new is critical.”

“So, the land-based industry has [a] wariness against technology,” he said. “But as I explained in a speech about six months ago, the slingshot is back now to the point of breaking and we can predict the extinction of the land-based industry if they don’t make the quantum leap forward.”

But to embrace AI, the gaming industry needs to update its policies on cloud storage.

Hall noted that about 80 percent of the casinos in North America are running on a local server, or a casino management system, situated on-property, “which is completely absurd for security reasons.”

In 2023, Hall explained, it is so easy to hack into a data system on-property.

Hall said the main reason for this was regulators requiring servers to be on-property, adding that they are the “first to admit they are lost and years behind where they should be when it comes to technology.”

Hall urged the International Association of Gaming Regulators to move faster on recommending standards to state regulators so they can feel more comfortable moving forward with their own regulations.

“I’m not worried,” Hall told VIXIO. “I’m actually terrified that if we don’t implement ethical AI policies with the most stringent rules possible,” the gaming industry will continue to fall behind others in regulating artificial intelligence.