New York gaming regulators have advanced proposed rules that would restrict how mobile sportsbooks use artificial intelligence and other automated systems to personalize gambling promotions and wagering recommendations.
The New York State Gaming Commission unanimously moved forward with the revised proposal, which covers AI, machine learning, algorithmic profiling and automated decision-making tools. The measure will receive further public comment before returning to regulators for possible final action.
A separate proposal would require sportsbook operators to identify customers who may be showing signs of problem gambling and assign someone to contact those patrons about gambling-related risks.
Commission Chairman Brian O’Dwyer also called on operators to address a gap in responsible gambling protections when a customer restricted by one sportsbook can continue betting through another.
“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.
He said the industry should demonstrate that commitment “by working together to share the data necessary to make sure that this doesn’t happen.”
AI Proposal Targets Personalized Gambling Offers
The revised rules would restrict sportsbooks, affiliates and vendors from using automated systems to analyze customer data and tailor promotions, bonuses, odds, betting limits, messages or product recommendations.
Operators would also face limits on suggesting specific wagers, types of bets or amounts to individual users.
The proposal would prohibit using automated tools to encourage higher spending, engagement or revenue through personalized promotions.
Customers who provide consent could fall outside some of those restrictions. Pari-mutuel horse racing applications that suggest wagers could also qualify for an exemption where users first opt in.
New York regulators based the measure in part on a similar framework in New Jersey.
The revised proposal also identifies recent bankruptcies, judgments and related debt indicators as possible signs of gambling risk.
Commission staff have been instructed to seek further expert input on AI and gaming before the rules return for additional discussion. No final vote date has been announced.
Regulators Push for Shared Risk Data
O’Dwyer warned that responsible gambling measures may be weakened when operators do not share information about customers they have restricted.
“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.”
The Commission wants sportsbooks to work together on a system that could prevent at-risk customers from simply moving between operators after restrictions are imposed.
New York currently has nine licensed mobile sportsbook operators: Bally Bet, BetMGM, Caesars Sportsbook, DraftKings, Fanatics, FanDuel, Resorts World Bet, Rush Street Interactive and theScore Bet.
Mobile wagering gross gaming revenue is taxed at 51%.
Industry Group Responds to Proposed Rules
The AI and responsible gambling measures were included in Governor Kathy Hochul’s State of the State 2026 programme, which also addressed underage gambling and marketing to vulnerable customers.
Joe Maloney, president of the Sports Betting Alliance, said operators would continue working with regulators.
“Since 2022, New Yorkers aged 21-plus 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. … We will continue our efforts to work with the Gaming Commission to ensure that any additional proposed regulations strengthen the regulated market in New York State,” said Maloney, as Public Gaming (PGRI) reports.
Maloney also said regulated sportsbooks now generate more than $1 billion annually in tax revenue.
The proposals remain under review, with further public comment and Commission discussion required before any final rules are adopted.