Will the EU AI Act Reshape iGaming?
Artificial intelligence (AI) is revolutionizing the iGaming sector, with the European Union AI Act promising to redefine how gaming operators utilize and manage AI technologies. The imminent rollout of this legislation presents both challenges and opportunities for the industry.
The AI Act and Gaming’s Future
The AI Act is heralded as a transformative piece of legislation within Europe, establishing a harmonized framework that governs AI across various sectors, including gaming. Gaming companies employ AI for numerous purposes, such as facial recognition and behavioral data analytics. As Dr. Cachia highlights, the use of certain AI tools necessitates a risk assessment by gaming operators. High-risk AI systems, especially those involving facial biometrics, are subject to stringent scrutiny due to the potential for fraudulent practices.
When implementing facial recognition technologies, operators must ensure that customers are informed and provide consent for AI usage. Enhanced compliance measures are required for AI applications that carry higher risks, including adherence to a universal code of practice currently being developed alongside the AI Act.
Compliance Roadmaps for High-Risk AI
To prepare for the phased implementation of the AI Act, gaming companies are advised to draft internal codes of practice for AI usage, using models issued by the European Commission as a foundation. Conducting an inventory of AI applications to classify their risk levels is equally critical. For instance, AI utilized for internal tasks, such as drafting contracts, may be categorized as low risk, whereas facial recognition falls into the high-risk category and requires an enhanced risk assessment.
Proactive interest from regulators is already evident, with authorities like Malta’s Gaming Authority conducting surveys to assess the AI technologies employed by industry license holders. This shift indicates a move towards immediate action, highlighting the necessity for operators to align their AI development strategies with legal requirements without delay.
Balancing Regulation with Innovation
The EU’s AI governance structure consists of various bodies aimed at regulating and promoting the responsible advancement of AI. The establishment of an AI regulatory sandbox provides a light-touch regulatory regime for startups, allowing them to offer AI as a service while ensuring player protection and trust.
The EU’s AI office will facilitate ongoing dialogue among stakeholders, including AI providers and gaming operators. Industry participants are encouraged to expedite their preparations, even though full implementation may take five to ten years. Dr. Cachia advises that companies begin drafting internal codes for AI usage as soon as possible.
Conclusion
The EU AI Act is set to fundamentally shape the use of high-risk AI within the iGaming industry through clear compliance obligations and governance mechanisms. Operators should take immediate action to inventory their AI tools, implement comprehensive risk assessments, and develop codes of practice focused on transparency and responsible gaming principles.
