New York regulators seek to close problem gambling gaps, establish AI regulations
New York gaming regulators are seeking to prohibit sports betting operators from using artificial intelligence to personalize promotions and wagering recommendations to protect consumers.
The New York State Gaming Commission (NYSGC) unanimously advanced a revised proposal restricting how mobile sports betting licensees use AI, algorithmic profiling and other automated systems to provide promotions and wagering advice.
The panel also advanced a proposal for at risk bettors that would require sports betting licensees to identify patrons who may be at risk for problem gambling behaviors. Under the proposed regulation, a licensee would be required to designate a person to contact the patron and engage on problem gambling behaviors and issues.
NYSGC Chairman Brian O’Dwyer expressed concern that a customer restricted by one operator could move on to another licensed sportsbook operator.
“The mobile sports betting industry have long maintained that they considered integration of responsible gaming practices a significant element of their business,” O’Dwyer said after the commission vote on Friday.
O’Dwyer reminded licensees these proposed rules provide them an opportunity to illustrate their commitment “by working together to share the data necessary to make sure that this doesn’t happen.”
“The industry is on notice by me and this commission that they need to solve this problem,” O’Dwyer said. “It’s a problem that this commission will require to be addressed and if the industry does not address it than we will address it, and they may not like it or the solution we come up with.”
New York gaming regulators have authorized and licensed nine mobile sports betting operators. The operators are Bally Bet, BetMGM, Caesars Sportsbook, DraftKings, Fanatics, FanDuel, Resorts World Bet, Rush Street Interactive, and theScore Bet.
Gross gaming revenue from mobile wagering is taxed at 51%.
The commission’s revised AI rules will receive additional public comment before being brought back before regulators for discussion and a possible vote.
Both proposals were included in a Governor Kathy Hochul, a Democrat, programs to address underage gambling, marketing of gambling to at-risk customers, and curbing gambling addiction.
The proposals were included in Hochul’s State of the State 2026 program announced in March. New York regulators based their AI measure on a similar regulation in New Jersey, which doesn’t outright ban the use of the technology.
What the proposal does is restrict sportsbooks, their affiliates, and vendors from using AI, automated decision systems, algorithmic profiling, machine learning or generative systems to analyze customer data and personalize promotions, bonuses, odds, betting limits, messages, and product recommendations.
Sports betting operators are also banned from suggesting specific wagers, types of wagers, and amounts while also avoiding promotions to increase spending, revenue or engagement.
The measure wouldn’t apply to customers who consent, while exempting pari-mutuel horse racing that offer a dedicated application that suggests wagers, provided the patron first affirmatively opts in.
Joe Maloney, president of the Sports Betting Alliance (SBA), said they’’ continue to work regulators to ensure that any “proposed regulations strengthen the regulated market” in New York.
“Since 2022, New Yorkers aged 21plus have been able to place legal wagers in a trusted, regulated market with licensed operators held to account by regulators that ensure commitments to consumer protection, responsibility, and integrity,” Maloney said in a statement.
As a result of this framework, Maloney said they’ve ended the illegal market’s monopoly, and regulated operators now generate over $1 billion annually in tax revenue. Gaming regulators have not set a date for a final vote on the proposed regulations.
https://cdcgaming.com/new-york-regulators-seek-to-close-problem-gambling-gaps-establish-ai-regulations/