Learn how to – Does the Rise of AI Spell Doom for Online Casinos & RNG?

Learn how to – Does the Rise of AI Spell Doom for Online Casinos & RNG?.

Artificial
intelligence or AI is a hot field of research right now. And there is
a lot of hype and buzz being created in the public realm as well,
given how fascinated we all are about killer robots and murderous AI.
We may have Hollywood to thank for such a negative perception about
AI in general.

But killer
robots aside, the implications from the rise of AI are all too real.
While it could be very helpful in many industries, AI could easily
put a lot of people out of business. If the fears of some experts are
real, that could include online casinos as well.

Understanding Casino RNG

Both AI and
online casinos occupy a common ground – both exist in the digital
realm and owe their entire existence to software code. All modern
casinos use software for their most popular games – slots. Even the
machines inside bricks and mortar casinos use software to run the
games.

And the
entire i-gaming industry relies on the continued success of this
particular software, which is called a Random Number Generator, or
RNG. A casino makes money by hosting games of chance, where neither
the player nor the host casino can accurately predict the outcome.

Even in these random games, the casino holds an advantage known as the ‘house edge’. It is linked to the famous saying about casinos – “no matter what, ultimately, the house always wins.” This is actually a fair mechanism – after all, casinos are businesses too and they need to turn a profit. The house edge is like the fee a player pays to the casino.

And in
online casinos, the RNG software is responsible for ensuring that
games remain random, or unpredictable. The software uses complex
algorithms that are constantly calculating outcomes, even when the
machine is not being played. In this way, the results of consecutive
plays are never linked.

But if the casinos design the software, can the results be trusted? This is where regulatory bodies like the UK Gambling Commission and industry bodies enter the picture. They mandate that the RNG software behind all casino games be tested at independent labs to ensure that they remain fair and not rigged excessively in favor of the casino.

Can RNG Software be Predicted

There is a
reason why casinos protect their RNG software like the Holy Grail. If
the software falls into the wrong hands, it could be “cracked,”
leading to serious repercussions for any casino running that
software.

It has already happened in the industry, as highlighted by this story that ran in Wired a few years back. A long intriguing read, it tells the story of Alex, a Russian math and programming genius who reverse-engineered the RNG software inside major western casinos.

The
information he gained by decoding the algorithms enabled Alex to
correctly predict when a slot machine is going to payout. He used
this knowledge to make millions of dollars targeting slot machines
all over the world.

Instances
like the one involving Alex can be prevented to an extent. Casinos
just have to take extra care to keep the algorithms safe. And in the
event one does get “lost,” they could just decommission it
and get another one. Those are expensive measures, but still better
than getting bled dry by the hackers.

How AI Could be More Dangerous than
Humans

Though they
call it “Random Number Generator,” the correct technical
term for the RNG software found in modern casinos is Pseudo RNG or
PRNG. For the most part, creating a truly random number generator is
incredibly complex and expensive. It can be done, but you would need
to base it on natural phenomena, like the decay of a radioisotope.

You cannot
use that kind of mechanism in casino games and run a profit. Instead,
casinos develop long and complex mathematical algorithms to create
RNG that appears random to humans. These RNG do exhibit patterns that
can be measured and predicted, but doing that would take humans a
long time indeed.

But AI is a different kind of intelligence. Modern advances in creating AI are centered on things like big data, machine learning, and neural networks. All these have ominous implications for casinos and RNG.

For
starters, the output of an RNG system over a period of time like
weeks or months can include millions of calculations and results. It
is a textbook definition of big data, which are basically massive
volumes of data that would overwhelm humans.

But AI
thrives on big data. Machine learning is a technique used to teach AI
to do things. It involves feeding tons of data and specific
instructions. The AI combines the two and seeks out patterns hidden
in the data. Once the AI has built up a huge enough collection of
patterns, it can then reliably make predicts related to that data.

Does that
sound familiar to anything we touched upon earlier? If someone
creates an AI and instructs it to study the outcomes spewing from
casino software, it would be just a matter of time before the AI
manages to learn the pattern. Since machines don’t get tired, the AI
could crack the RNG in a very short time indeed.

How will the casino industry respond
to this threat?

There are
no easy answers to this question. One option might be to get smarter,
more complex RNG software, possibly those based on AI themselves.
There is no reason why it has to be all doom and gloom for the
casinos.

The rise of
the AI promises a lot of benefits for the casinos as well. There is
already much talk of using AI to run casinos on their own, dealing
with customers using chatbots, and using predictive analysis to give
players a more personalized experience.

After all,
human ingenuity is not just about developing new technology, but also
about harnessing it for both offense and defense. If the other side
uses tools to cheat, casinos too can play the same game. The cat and
mouse game between casinos and cheaters is as long as the industry
itself. The AI may add a new edge to it, but it will probably not end
the game for good.