[et_pb_section fb_built=”1″ _builder_version=”4.16″ global_colors_info=”{}”][et_pb_row _builder_version=”4.16″ background_size=”initial” background_position=”top_left” background_repeat=”repeat” custom_padding=”0px|||0px||” global_colors_info=”{}”][et_pb_column type=”4_4″ _builder_version=”4.16″ custom_padding=”|||” global_colors_info=”{}” custom_padding__hover=”|||”][et_pb_text _builder_version=”4.16″ background_size=”initial” background_position=”top_left” background_repeat=”repeat” global_colors_info=”{}”]

Artificial intelligence (“AI”) has undergone tremendous development in recent times, and the gambling sector, particularly online casinos, and IGaming in general (sportsbook, lotteries, skill-based games) are also affected. Recently a player protection software using artificial intelligence has emerged, developped by “Mindway AI” (Front page – Mindway AI). This software has undergone important development recently, and increasingly meets the needs of gaming houses. Even though it may not yet be fully in line with their needs, and practical implementation will most certainly raise a number of issues, there are a few reasons why it’s worth taking an interest now.

1. Which are the relevant legal provisions?

Under Swiss law, gambling operators are required to take appropriate measures to protect gamblers against gambling addiction and excessive gambling (Art. 71 of the Swiss Federal Gambling Act SFGA / Geldspielgesetz, BGS / Loi fédérale sur les jeux d’argent LJAr). Gaming houses and large-scale gaming operators define and establish a program of social measures (“Social concept”) (Art. 76 section 1 SFGA / BGS / LJAr). Taking into account the potential danger and the characteristics of the distribution channel for the various gaming offers, they define there the measures they intend to take to protect players. This “social concept” must be approved by the Swiss Federal Gaming Board (SFGB; ESBK; CFMJ). Protecting players from gambling addiction, over-indebtedness, and more generally from the negative effects of gambling on their private lives, both socially and from a family point of view, is a key concern, and one to which every gaming house must adhere, with all the serious consequences this entails in terms of both staff and costs. And this is true not only in Switzerland, but also in other European countries and worldwide.

2. Could the use of AI become an appropriate measure to protect gamblers in the meaning of Art. 71 and Art. 76 ff. SFGA?

Considering the recent developments, the use of AI-based software could rapidly be considered as an appropriate measure to protect gamblers. However, gambling houses, casinos, online casinos already have measures and social concepts in place approved by the SFGB/ESBK/CFMJ, and the question is rather “why would I have to change my approved system”, considering that AI is not a regulatory requirement yet? What would be the added-value compared with the current measures?

Of course one cannot give a general positive or negative answer to this question, and each gambling house will have to give a tailor-made answer depending on its type (A / B), its size, its structure and organization, etc.

There are however some general aspects described hereunder in Section 3 that tend to demonstrate that the use of AI could provide some added value to the gamblers protection.

3. Why could artificial intelligence resources be an alternative for human resources?

Implementing player protection requires specially dedicated staff. This staff must analyze the “alerts” triggered by players during play (large losses with different thresholds, attempted payouts refused by the card issuer or bank, etc.) and carry out an analysis of the player’s profile (behavioral analysis and analysis of financial documents, which are often requested from players). Gaming houses have implemented this profiling in different and non-uniform ways, some having hired in-house jurists, others psychologists, others people with no particular qualifications at lower costs trained on the job, and others using a combination of these different forms.

The use of human resources employed by the gaming house is not efficient in several respects:

• Costs are high for the gaming house: the more active players it has, the more profilers it needs. But there are strong seasonal fluctuations, and a tendency towards under-staffing, which leads to overloading at peak times.
• The risk of error is high: While the analysis and result are objectivized by objective criteria, the fact remains that the case is often not immediately clear-cut, and the decision is ultimately subjective and human. Moreover, as mentioned above, there are often not enough “profilers” within the gaming house, and they are overwhelmed and tend to botch the player analysis to save time.
• The risk of conflict of interest is also significant, since a player who has to be banned from gambling is also a lost customer for the gaming house. The more the player loses in the gaming house, the more the profiler will tend to be understanding and indulgent in his analysis.

An Artificial Intelligence software such as Mindway AI could optimize profiling and reduce these risks, resulting in better player protection.

4. What could be the technical issues regarding the implementation?

On the technical side, the first thing for the gaming house to do would be to determine whether and how AI software can be integrated into its environment. Online casinos, for example, would need to determine with their external gaming platform software supplier whether and how this integration could take place. In practice, this would result in a contract based on discussions and negotiations between the three parties (online casinos, gaming platform software supplier and AI software supplier). Our lawfirm can assist you in this process.

5. What could be the legal risks regarding Data privacy and protection?

AI technology often relies on large amounts of data to function effectively, which raises concerns about privacy and data protection. There are several laws and regulations in place around the world to protect personal data, such as the Swiss Federal Data Protection Act (FDPA), the General Data Protection Regulation (“GDPR”) in the European Union and the California Consumer Privacy Act (“CCPA”) in the United States. Recently, with the ePrivacy Regulation (officially: Regulation of the European Parliament and of the Council concerning the respect for private life and the protection of personal data in electronic communications and repealing Directive 2002/58/EC), the European Union wants to strengthen the privacy of citizens in online communications and regulate data protection more intensively within the EU (NB: The ePrivacy Regulation is not expected to enter into force before the end of 2023. Taking into account a possible transition period of 24 months from the date of entry into force, this would mean that any new regulations would not come into force before the end of 2025). Also, there is a coming new regulatory requirement that must be taken into account also by Swiss actors, namely the draft Artificial Intelligence Act (“AI Act”:  Proposal for a Regulation of the European Parliament and of the Council laying down harmonised rules on artificial intelligence and amending certain Union legislative Act; the “AI Regulation” (see our newsletter: The EU’s Artificial Intelligence Act: Impact on Switzerland?).

6. What are the risks regarding reliability and liability?

There are legal challenge associated with AI technology regarding liability and accountability. AI systems can make decisions and take actions autonomously, which raises questions about who is responsible for the consequences of those decisions and actions. It will in particular be necessary to determine whether the results and decisions taken by the AI (exclusion from games, loss limits, opening of special investigations, etc.) will still need to be checked by a human being according to the four-eyes principle, or whether the reliability is such that we can do without any checks at all. Then, of course, in the event of a computer problem and AI software unavailability, an emergency procedure will be put in place to handle alerts triggered by players until the problem is resolved.

Before using AI, there should be a risk assessment, and all the issues should be addressed in a contract.

7. Could the use of AI for player protection soon become a legal or regulatory requirement for gaming houses?

At present, at least in Switzerland, there is no legal or regulatory obligation to use AI in the social concept of gaming houses. However, the SFGB/ ESBK / CFMJ supervisory authority has stated that it is closely monitoring developments in the field of AI, and it is clear that it could quickly raise the obligation to use AI to regulatory level if, in its view, the conditions it has set itself are met. In this case, the gaming houses (casinos, online casinos, etc.) will have to react quickly. Gaming houses therefore need to anticipate this issue, and we are here to assist them in this process, particularly in project development and contract negotiation and drafting.

8. If AI is used, would I need to obtain prior authorization from the supervisory authority?

The project must first be submitted to the supervisory authority for approval. Here, too, we can help you prepare your application.

9. Is there any sufficiently developed software available today that has been officially recognized and approved by a supervisory authority?

Not to our knowledge. But that could soon change.

LINDEMANNLAW supports you in the analysis, the project development, the negociations and contract drafting, as well as the preparation and filing of the petition for approval by the SFGB/ESBK/CFMJ.

[/et_pb_text][/et_pb_column][/et_pb_row][/et_pb_section]