FanDuel’s co-founder believes live casino incumbents will lag behind on innovation. Eccles says BetHog’s closure had nothing to do with regulatory strain on crypto casinos in the US. <\/p>\n
Businesses in the gambling industry tend to die due to over-regulation, litigation or exhaustion \u2013 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<\/a>, while it is still functioning, still growing and still, by his own account, a very good product.<\/p>\n The reason is not failure but refocus. Everything BetHog built \u2013 its engineers, its technology, its lessons \u2013 is being folded into Sentient Studios, a spin-off<\/a> 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\u00a0products.\u00a0<\/p>\n \u201cWe ran the risk that if we didn\u2019t put 100% behind it, we\u2019d fail at AI live dealer \u2013 the one thing we were really excited about,\u201d Eccles tells iGB.\u00a0<\/p>\n The story of how he and his company arrived at that conclusion says a good deal about where online casino is heading.\u00a0<\/p>\n Is AI casino dealer a niche too small?<\/p>\n Let\u2019s start with the disappointment that made the decision easier. BetHog\u2019s founding thesis, hatched with Eccles\u2019 long-time collaborator Rob Jones, was that a superior product would win in crypto gambling. It did not.<\/p>\n \u201cI think we built a really great product,\u201d Eccles says. \u201cWhat we found was that crypto casino doesn\u2019t really compete on product as much as marketing.\u201d In a market ruled by streamer deals and bonuses, craftsmanship counted for little. And even victory would have been small. \u201cWe 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,\u201d he notes. <\/p>\n 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\u2019s game \u2013 \u201cA very small number of players, but they play high stakes, high volume,\u201d as Eccles puts it.<\/p>\n The AI tables behaved differently. \u201cThe game plays more like an original,\u201d he says, drawing in lower-staking players who dip in and out. In industry terms, it was mass market \u2013 the same quality that made slots-style \u201coriginals\u201d the engine of modern casino economics.\u00a0<\/p>\n Ask the dealer\u00a0<\/p>\n Player interviews explained why. Many people find human dealers intimidating. \u201cNew players find it a little intimidating, because they think, \u2018I don\u2019t really know what I\u2019m doing,’\u201d says Eccles, who himself has played blackjack for 30 years. <\/p>\n Sitting on a 15\u00a0against a dealer\u2019s 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 \u2013 a button on the interface.\u00a0<\/p>\n The turning point came in April, when the company began talking to operators: a mix of crypto casinos and, more tellingly, \u201clarge global regulated operators\u201d. The regulated giants harbour deep frustrations with live dealer. Some jurisdictions ban it outright;\u00a0others allow it only under certain conditions, such as requiring streams from a physical casino. <\/p>\n The inflexibility of traditional live casino development<\/p>\n 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. \u201cWe could probably do that in one to two weeks max,\u201d says Eccles. \u201cWe can change the uniform of the dealers. The dealers themselves [can even change] \u2013 how they talk, their personalities, what they look\u00a0like.\u201d Capacity becomes flexible too: \u201cThere\u2019s no \u2018you have 20 tables\u2019 \u2013 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\u2019s not a problem.\u201d\u00a0<\/p>\n 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\u00a0any case been migrating naturally. \u201cGradually everybody moved over to AI live dealer, because that was the exciting thing to be working on,\u201d Eccles says. \u201cIt was one of those decisions where, as soon as I thought about it, I was like: this is obvious.\u201d\u00a0<\/p>\n The making of a virtual croupier\u00a0<\/p>\n 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.\u00a0<\/p>\n 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 \u2013 all before the moment passes. \u201cWhen we started, we didn\u2019t appreciate all of that,\u201d Eccles concedes.\u00a0<\/p>\n Early models overacted: \u201cIf you want her to be shocked, she looks terrified \u2013 and you\u2019re like, no, just slightly frightened.\u201d\u00a0<\/p>\n 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.\u00a0Underneath it all, the base models keep improving. \u201cTrillions of dollars have been invested in these base models,\u201d Eccles notes.\u00a0<\/p>\n \u201cWe look at our product from eight months ago and compare it to today and it\u2019s just quite stunning. Every release, it improves.\u201d\u00a0<\/p>\n Live casino rivals face innovator dilemma<\/p>\n 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 \u2013 a rival is \u201cvery, very close to being live\u201d, he says \u2013 and he claims to welcome competition: \u201cI\u2019ve been in markets where I was the only one, and it turned out it wasn\u2019t a very good market.\u201d\u00a0<\/p>\n But he argues the incumbents face a classic innovator\u2019s 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.\u00a0<\/p>\n Evolution has previously been very dismissive of AI live dealers, calling them deepfakes. Embracing them now, Eccles argues, would cannibalise their own product.\u00a0Eccles\u2019s forecast is immodest: \u201cIn five years\u2019 time, 80% of live dealer will be AI-based avatars.\u201d\u00a0<\/p>\n Trust beyond the table\u00a0<\/p>\n 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 \u201c90% of the time you\u2019ll\u00a0see absolutely zero communication\u201d.\u00a0<\/p>\n As for trust issues, Eccles recalls:\u00a0\u201cLive dealer definitely came about in an era when trust was a major factor \u2013 people were saying, \u2018I don\u2019t know if I trust these sites.\u2019 Physical cards do help drive trust. But the interesting thing is that physical cards aren\u2019t the only way you can drive trust.\u201d\u00a0<\/p>\n