Ben and Ari Fox: "If you're in the gambling industry and not embracing AI, you're really going to miss a lot"

In the second part of their exclusive interview with Yogonet, brothers Ben and Ari Fox, producers of CEC Live! (formerly known as the Casino eSports Conference), delve into the differences between Egaming and iGaming, the importance of catering to the younger segments and why companies in the sector must leverage AI in their operations.

Does esports, or as you and the gamer community call it, Egaming, have a place alongside iGaming?

Ari Fox: Egaming is a term that my brother and I have been using to define that other sector in the gambling space; to differentiate it from iGaming, sports wagering, and brick-and-mortar. Egaming can live on its own and I know of companies that are already doing that. They are the pioneers, like those that did iGaming 20 years ago. They are pioneers in the Egaming space, which has peer-to-peer wagering online, esports wagering on professionally sanctioned events, college esports matches...

That bubble in regard to esports and the professional levels burst. But I see a grassroots building on the college levels of esports in the United States. There could be wagering on that as well. There is an opportunity there. And can Egaming be part of iGaming? Absolutely. Which is what the CEC is discussing.

Can you offer something for a younger group of people on your online casino or on your sports wagering app? And does it have to be actual wagering or can it be a peer-to-peer idea? There's opportunity there. It's engaging that group the correct way and understanding that they will come into your business and want to be part of your community when you show that you're part of their community. It is a viable moneymaking space.

Why is the distinction between E-gaming and iGaming important?

Ben Fox: Hopefully, people will pick it up and see the distinction. Egaming is not a new term. It's been used by the video game industry since its conception. You ask somebody in video gaming about iGaming and they don't even know what that word is. It doesn't exist to them because it's foreign. It was created within the casino industry, and it doesn't exist outside of it. When we use the term Egaming, that applies to video gaming and working together with the casino industry.

There are a lot of similarities between iGaming and Egaming, but there are also differences. The approach is different, the marketing is different. If you boil it down to the action, yes, Egaming happens online, which is what iGaming does. But unlike iGaming, Egaming can live in brick-and-mortar, so it actually lives in two worlds. iGaming, not so much - you're really confined only to the online space as it is. Egaming incorporates tournaments and things like that that are live, so it's more encompassing.

I strongly recommend that people start using that term because in working with the video gaming industry, we have to make sort of a distinction here. We need to start speaking their language as well, because if we don't, then the participation falls apart a little. And that's our mission - to bridge this gap; to bring these two worlds together so that they can communicate properly and move forward in being able to use this as an offering.

How important is that offering?

Ben Fox: When Ari and I first started doing CEC eight years ago, the millennials were the youngest generation. Believe it or not, the millennial age group is now 25 to 40. When we first started having this discussion, they weren't old enough to gamble, but now they are older and they make up 23% of the global population. 

You're missing out if you're in the gambling space and you're not providing anything for them. They all grew up on Nintendo and video gaming. And a large portion of them, I'd have to say about 85% or more, are gamers. So when you start throwing all these other things in Las Vegas to entertain people and you ignore this portion of the business, you're losing a lot. It's time for them to get with it.

What are the barriers you see in the adoption of this new offering?

Ari Fox: There's the question of where's the entry in regards to the gambling side of it. "If we're going to offer esports, we want to offer a main game that the Millennials and Gen Z know." But it doesn't necessarily have to be that. It could be a type of game that is peer-to-peer or competitive, exploratory or just video gaming in general. And that could be offered too.

I think the barrier is the gambling industry. This question of "How do we make money on it? Is this the same as a slot machine?" If I put a slot machine on my floor and it's taking up that two-foot by two-foot space, I'm making X amount of dollars on that machine. Then the question becomes: "If I do the same thing and I put an arcade area where people can get money, how long is that person standing there playing?" They're standing there for longer than five minutes, but it's not making the money that I'm used to making.

Casinos are used to making a certain amount of money. But take this and place it online. There shouldn't be any barrier. It's actually much more affordable to an online casino than it is to a brick-and-mortar. Brick-and-mortar casinos have objections in regard to how much a particular machine is making me on a per-minute basis. But online, there's no physical space that's taking up except server space. And how much does that cost me? Well, considerably less than a brick-and-mortar.

So if there should be any businesses looking to get involved and learn more about how to integrate this, it should be the iGaming and the sports wagering people. We have the baseball season right now. So what are you going to offer to the over 50% of millennials that aren't watching baseball? You lost them.

Technology dominates a big part of the esports conversation. We have the Metaverse, VR, immersive experiences, and now artificial intelligence is here to stay. How real are these technologies and the opportunities they promise?

Ari Fox: We talk about everything on the surface. We now talk about AI everywhere. "Oh, there's ChatGPT. I can put in whatever I want and it's going to write me this article or that article." Then everyone hears those 60-minute pieces on Google Mind and how it's learning on its own and suddenly AI is really scary...

AI is a tool at the end of the day and it's not going to take over the world. Eight years ago when we started, I knew about AI at that point. I had seen some things about Google Mind and what it was doing with a Chinese game called Go, which is like Othello. The computer beat the best player in the world three out of four times.

You can compute the AI to do a specific learning task. If we're talking about AI delving deep underneath the surface, this can be a game changer. It puts the favor of not being able to beat the house in the house's favor, the house being the casino.

You can have AI working for you. I was at a sports wagering conference in May and there are bettors that are using AI to wager on sports. And the bookie is still using some guy in the back room to figure out the numbers. They're now at a disadvantage because the consumer has access to a technology that they're going to use.

Do you see AI making a big impact on sports betting?

Ari Fox: I don't know what the stats are, but the percentage is way in the favor of the bettor. Earlier I talked about if sports betting is ever going to make any money. Look where it is now. It's coming out of only being legal in New Jersey and Las Vegas. Every state is adopting it, but you're adopting something where some of your bettors have access to AI and are using it to make those wagers and be able to beat the house.

Does the house have AI? I know some sports wagering companies that are being run by maybe 4 or 5 people today and the entire thing is on artificial intelligence. Which is great. But those companies have B2B services on statistics and stuff run by AI that are not being utilized properly right now. We're still using sticks and stones to deal with consumers out there that are very savvy in regards to utilizing things like AI.

CEC Live! returns to Atlantic City November 6-7

Is this adoption of AI different in E-gaming?

Ari Fox: When it comes to video gaming or Egaming, AI has to be part of the conversation. If you're going to adopt a new gaming platform on your programming, on your online casino, or in your brick-and-mortar, you better have AI on there. AI that's either tracking players, or playing against the player in a peer-to-peer game; or maybe an exploratory game.

And make sure that the AI keeps learning faster and faster. We're talking about video games that have the ability to just learn on their own. Now you have an employee that's working for you, like the dealer at the poker table. But AI is more in your favor because the program knows: "I'm going to be able to beat this person because I've been learning already." If you're not embracing it as a casino, online or brick-and-mortar, then you're really going to miss a lot.

Ben, what's your take?

Ben Fox: People are fearful of AI. But if you employ it as Ari said, it's going to work for you to combat the things that you're actually afraid of. However, we have to remember that there are nuances that we as human beings have that computers don't possess.

You can see this in writing. You can tell when somebody is using ChatGPT or Bard or any of these other tools because they don't have the same kind of nuance that people do. And we like those nuances. AI is going to find its way and its purpose, but at the end of the day, we as flesh and blood humans have certain things that separate us from AI and we should not be afraid of it.

It is, however, going to play a very big part in technology, and they do have to employ it within the casino world sooner than later. But a couple of attempts have been made that were sort of backward. The skill-based area was very backward in its thinking because they were creating it from the casino concept down and it wasn't really resonating with the gamer community or how they wanted to play. And that's why these ideas have gone by the wayside.

Ari and I work with Next Gaming, and I'm going to give a little shout-out to him because they have nailed skill-based and have this crossover. They have retro gaming in a cabinet that appeals even to young gamers. They like retro games as well; they remember their dad and their mom played Atari. And my brother and I were saying, as an expansion to this, those guys should also be in the online space. They're the closest bridge right now to skill-based built from a gamer perspective that's going to sit on a casino floor.