Businesses in the gambling industry tend to die due to over-regulation, litigation or exhaustion – almost never by choice. Yet on 31 July Nigel Eccles, the co-founder of FanDuel, will voluntarily shut BetHog, the crypto casino he launched with several FanDuel alumni, while it is still functioning, still growing and still, by his own account, a very good product.
The reason is not failure but refocus. Everything BetHog built – its engineers, its technology, its lessons – is being folded into Sentient Studios, a spin-off whose sole product is a photorealistic AI dealer: a conversational avatar that deals blackjack in real time, with no studio, no shift patterns and no human behind the cards. Eccles believes it is the biggest opportunity of a 25-year career in gambling products.
“We ran the risk that if we didn’t put 100% behind it, we’d fail at AI live dealer – the one thing we were really excited about,” Eccles tells iGB.
The story of how he and his company arrived at that conclusion says a good deal about where online casino is heading.
Is AI casino dealer a niche too small?
Let’s start with the disappointment that made the decision easier. BetHog’s founding thesis, hatched with Eccles’ long-time collaborator Rob Jones, was that a superior product would win in crypto gambling. It did not.
“I think we built a really great product,” Eccles says. “What we found was that crypto casino doesn’t really compete on product as much as marketing.” In a market ruled by streamer deals and bonuses, craftsmanship counted for little. And even victory would have been small. “We can definitely carve a niche in crypto casino, but crypto casino is probably less than 10% of online casino. And we have a product here that is really unique,” he notes.
That product began as a side project last summer, when the team started deploying an AI dealer on BetHog itself. The data defied expectations. Live dealer is conventionally a high-roller’s game – “A very small number of players, but they play high stakes, high volume,” as Eccles puts it.
The AI tables behaved differently. “The game plays more like an original,” he says, drawing in lower-staking players who dip in and out. In industry terms, it was mass market – the same quality that made slots-style “originals” the engine of modern casino economics.
Ask the dealer
Player interviews explained why. Many people find human dealers intimidating. “New players find it a little intimidating, because they think, ‘I don’t really know what I’m doing,’” says Eccles, who himself has played blackjack for 30 years.
Sitting on a 15 against a dealer’s 10, novices did something they would never dare at a human table: they asked the dealer what to do. Sentient turned the behaviour into a feature – a button on the interface.
The turning point came in April, when the company began talking to operators: a mix of crypto casinos and, more tellingly, “large global regulated operators”. The regulated giants harbour deep frustrations with live dealer. Some jurisdictions ban it outright; others allow it only under certain conditions, such as requiring streams from a physical casino.
The inflexibility of traditional live casino development
However the main problem was inflexibility. An operator wanting to rebrand a live studio around a flagship sports partnership is typically quoted three to six months, at great cost, with long commitments attached. “We could probably do that in one to two weeks max,” says Eccles. “We can change the uniform of the dealers. The dealers themselves [can even change] – how they talk, their personalities, what they look like.” Capacity becomes flexible too: “There’s no ‘you have 20 tables’ – you can have one table or 10,000 tables. If you need several hundred of them on a Friday night and hardly any on a Saturday morning, that’s not a problem.”
Players loved it; operators wanted it; several tier-one licensees are expected to go live later this year. At that point, running two companies in parallel stopped making sense, Eccles explains. The 15-strong engineering team, all based in Britain, had in any case been migrating naturally. “Gradually everybody moved over to AI live dealer, because that was the exciting thing to be working on,” Eccles says. “It was one of those decisions where, as soon as I thought about it, I was like: this is obvious.”
The making of a virtual croupier
None of this means the product was easy to build. Generating photorealistic video has become almost trivial; while generating responsive photorealistic video has not, Eccles explains. The slick clips flooding social media take minutes to render. A dealer has seconds.
When a player is dealt two aces, the avatar must register the hand, compose a remark, choose an emotion, sync her lips and coordinate hands and posture – all before the moment passes. “When we started, we didn’t appreciate all of that,” Eccles concedes.
Early models overacted: “If you want her to be shocked, she looks terrified – and you’re like, no, just slightly frightened.”
The first version, launched in October, was deliberately cartoon-like; photorealism arrived in April, and fortnightly releases have gradually made the characters feel more natural since. Underneath it all, the base models keep improving. “Trillions of dollars have been invested in these base models,” Eccles notes.
“We look at our product from eight months ago and compare it to today and it’s just quite stunning. Every release, it improves.”
Live casino rivals face innovator dilemma
The competitive question writes itself: What stops, for example, Evolution, the Swedish giant whose vast studios and thousands of human dealers dominate live casino, from building the same thing with deeper pockets? Eccles expects imitation – a rival is “very, very close to being live”, he says – and he claims to welcome competition: “I’ve been in markets where I was the only one, and it turned out it wasn’t a very good market.”
But he argues the incumbents face a classic innovator’s dilemma. His analogy is De Beers, which greeted lab-grown diamonds with a marketing war insisting they were not real, before grudgingly selling them as an inferior line.
Evolution has previously been very dismissive of AI live dealers, calling them deepfakes. Embracing them now, Eccles argues, would cannibalise their own product. Eccles’s forecast is immodest: “In five years’ time, 80% of live dealer will be AI-based avatars.”
Trust beyond the table
Sceptics will raise two objections against AI live dealers. The first is authenticity: surely the point of live dealer is that it is live? Eccles counters that the sociability of live tables is largely mythical. Visit a public Evolution blackjack table and “90% of the time you’ll see absolutely zero communication”.
As for trust issues, Eccles recalls: “Live dealer definitely came about in an era when trust was a major factor – people were saying, ‘I don’t know if I trust these sites.’ Physical cards do help drive trust. But the interesting thing is that physical cards aren’t the only way you can drive trust.”
If they were, Eccles says, there’d be no way that slot providers like Pragmatic Play or Hacksaw would work.
“No user understands what their RNG system is and whether it’s fair, but they’re trusted because of the brand. So we think there are other ways you can build trust, not just physical cards. The current industry already uses a lot of virtual elements, and users accept it.”
Trust in Sentient’s dealer has risen as production values have improved, and the games can be made provably fair. Regulators have proved unexpectedly relaxed: strip away the avatar and “at its core, it’s just an RNG product”, Eccles says.
The dealer has no knowledge of upcoming cards, which sit with a separate, certified engine, and responsible-gambling behaviour is trained in: if, for instance, a dealer hears a player admit he is out of money, it will warn him off.
Operating in the cryptocasino grey zone
The second objection is sharper. BetHog operated in the crypto-casino grey zone at a moment when American regulators were hunting unlicensed operators. Was the closure really about opportunity, or about walls closing in? “Almost none of the latter,” Eccles insists: the firm avoided contested markets, used crypto as payment rails rather than as a shield, and was exploring regulated licences before the pivot. Any remaining balances, he promises, will be reimbursed: “If somebody emails me in two months’ time and says, ‘I had $500 in there,’ we would honour it.”
Nor does his marathon lawsuit against FanDuel’s former board – whose fraud and fiduciary-duty claims a New York court recently allowed to proceed – intrude on the new venture. “At this point, it’s not significant. It’s a multi-million-dollar case, so it’s heavily staffed. It is something that rumbles on, but it has no influence on our business otherwise – it’s completely separate.”
Too good for the room
The strangest problem Sentient now faces is excellence, which again ties back to authenticity. Paradoxically, the issue can be that the product simply is too good. Eccles highlights audio quality as an example:
“The audio quality of live dealers is typically very poor – oftentimes you can’t really hear the dealer that well, because the microphones are on the table and they pick up a lot of background noise. When we create our dealers, the audio quality is just way too high. So there’s this weird thing where we have to dirty the sound quality and interweave it with background noise, otherwise it just breaks that theatre.”
As for unease about machines replacing people, Eccles reaches for the ATM, once shunned, and the self-checkout, once cursed. “People say ‘I don’t know, I want it to stay traditional’ – and then it all just kind of moves.”
Punters who have sworn they would never gamble against an avatar may soon find themselves doing exactly that.
Original article: https://igamingbusiness.com/tech-innovation/artificial-intelligence/nigel-eccles-all-in-ai-live-dealer-bethog/
