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\n\t\tOpinions expressed by Entrepreneur contributors are their own.\t<\/p>\n
Nigel Eccles co-founded FanDuel. His next company, BetHog, was a crypto casino. Crypto casinos in general are a super competitive industry. The product the team had built internally, an AI blackjack dealer that banters and remembers you, became so popular with their players that they were much better served by\u00a0shutting down the casino\u00a0and selling the dealer to other gaming operators as a B2B product.<\/p>\n
The key insight is that users really love the AI dealer experience. Live dealing is a huge operational cost for casinos, but it\u2019s popular with users. Hence, AI dealing might be a good alternative.<\/p>\n
\u201cVery typically, a lot of video games you can play against computer, or you can play against other people. Playing against computers is actually a lot more popular, right?\u201d Eccles said on my podcast<\/a>. \u201cWe found that AI Live Dealer is 10 times more popular than its Live Dealer equivalent. So people just find it less scary.\u201d<\/p>\n At the same time, I keep meeting founders selling the opposite: verified, live humanity. A prediction market on what a real streamer does next. A paper trading app where retention is other people. People are gonna either want more efficiency and customization, in which case AI becomes the product, or they\u2019re going to want more authenticity, in which case the humanity itself becomes the product. And it\u2019s unclear which use case will prevail. <\/p>\n Why would I choose the AI dealer versus a human, or the AI competition versus a human competition? That part is a little bit unclear, so I asked the founders on each side.<\/p>\n Eccles automated dealers because players were not actually buying the human. \u201cLive dealers are a $15 billion industry. There\u2019s probably about somewhere around 30 or 40,000 people who work as live dealers,\u201d he said. The experience \u201cfrom the player perspective just isn\u2019t great, probably 70, 80% of the time.\u201d<\/p>\n His forecast is blunt: \u201cWithin three to five years, I think 80% of live dealers will be AI-powered.\u201d And he argues automation grows the pie instead of shrinking it. \u201cI actually think we are going to dramatically grow the market because there\u2019s this sort of whole group of people that would play a live dealer, but real humans are a little bit scary. This is the game they can play.\u201d<\/p>\n Paper trading can be a great way to learn about finance and the stock market. But paper trading on your own can be boring, tedious and easy to deceive yourself. Which is why a social paper trading app has been successful in basically having a simulated environment where there\u2019s nevertheless social and human interaction.<\/p>\n It\u2019s a social trading app where people can learn from each other, but without the pitfalls of unlimited losses.<\/p>\n A finance creator who partners with the app told me the same thing about the fake money. \u201cThe problem is when you do paper trading, a lot of people don\u2019t take it seriously,\u201d he said. What makes it work is treating it like the real, social thing it imitates: \u201cYou should have a strategy when it comes to paper trading even though it, like, seems like it\u2019s counterintuitive.\u201d<\/p>\n I spoke to a Gen Z founder who runs a prediction market on live streams, with markets that settle in about a minute. \u201cInstead of trading on the final thing happening in the stream, like, will you win the match? You\u2019re trading on everything happening throughout the stream,\u201d he told me. \u201cHow many grenades will he pick up in the next 30 seconds? How many kills will he get in the next 60 seconds?\u201d<\/p>\n The launch video that pulled in millions of views came from the human side of the platform, not the esports side. \u201cWe had one of our streamers approach 50 women in the streets of Miami, and you were able to trade on each of those interactions \u2014 would he get the number or not?\u201d Rama said. The numbers are his: \u201cWe\u2019ve crossed $10 million in trading volume. We have 42,000 registered users. This is all in the last 45 days of launching.\u201d<\/p>\n Demand, in his experience, follows the humanity. \u201cIt\u2019s more entertaining. And cooler. To trade on an IRL stream or your favorite streamer stream.\u201d<\/p>\n So ask where the human sits in your product and what is going on in that moment. Is it a moment of delight, or is it a moment of friction? And where does the human add value, as a peer, as competition?<\/p>\n One more thing we should mention: The issue is not with the best. Eccles talks about this. It\u2019s not with the best online dealers. The best online dealers have demand, and will always have demand. The issue is with the sort of not-so-good ones, the ones that are basically less efficient. Those will be replaced by AI, because AI will provide a more personalized experience.<\/p>\n At the very high end of most categories, people will still prefer a human experience.<\/p>\n<\/p><\/div>\n Nigel Eccles co-founded FanDuel. His next company, BetHog, was a crypto casino. Crypto casinos in general are a super competitive industry. The product the team had built internally, an AI blackjack dealer that banters and remembers you, became so popular with their players that they were much better served by\u00a0shutting down the casino\u00a0and selling the dealer to other gaming operators as a B2B product.<\/p>\n The key insight is that users really love the AI dealer experience. Live dealing is a huge operational cost for casinos, but it\u2019s popular with users. Hence, AI dealing might be a good alternative.<\/p>\n \u201cVery typically, a lot of video games you can play against computer, or you can play against other people. Playing against computers is actually a lot more popular, right?\u201d Eccles said on my podcast<\/a>. \u201cWe found that AI Live Dealer is 10 times more popular than its Live Dealer equivalent. So people just find it less scary.\u201d<\/p>\n<\/p><\/div>\nWhen the human is a cost center<\/h2>\n
When the human is the peer<\/h2>\n
When the human is the product<\/h2>\n
Key Takeaways<\/h2>\n
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