The New York State Gaming Commission (NYSGC) has moved forward with a plan that would bar mobile sports betting operators from relying on artificial intelligence to tailor promotions and wagering recommendations to individual customers. Regulators said the step is designed to protect consumers.
Commissioners voted unanimously on Friday to advance a revised version of the proposal, which sets limits on how mobile sports wagering licensees deploy AI, algorithmic profiling and other automated systems when they offer promotions and betting advice.
Under the proposal, sportsbooks, along with their affiliates and vendors, would not be able to use AI, automated-decision systems, algorithmic profiling, machine learning or generative systems to analyze customer data for the purpose of personalizing promotions, bonuses, odds, betting limits, messages and product recommendations.
Operators would also be barred from suggesting specific wagers, wager types or amounts, and they would need to refrain from promotions intended to increase spending, revenue or engagement.
The restrictions would not apply to customers who give their consent, and parimutuel horse racing is exempt from the measure.
The Commission modeled the New York rule on a comparable regulation in New Jersey, which does not prohibit the technology outright.
The revised AI rules will go through another round of public comment before they return to the Commission for discussion and a possible vote.
Operators asked to identify at-risk patrons
At the same meeting, the Commission advanced a second proposal that targets bettors who may be at risk. The regulation would require sports betting licensees to identify patrons who may show signs of problem-gambling behavior. Each licensee would also need to designate a person who would engage those patrons on problem-gambling behaviors and issues.
NYSGC Chairman Brian O’Dwyer said he was concerned that a customer whom one operator restricts could open an account with another licensed sportsbook.
“The mobile sports betting industry has long maintained that they considered integration of responsible gaming practices a significant element of their business,” O’Dwyer said after the vote.
He told licensees that the proposed rules give them a chance to demonstrate that 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, then we will address it, and they may not like it or the solution we come up with.”
Both measures form part of Governor Kathy Hochul’s programs to address underage gambling, the marketing of gambling to at-risk customers and gambling addiction. The Democratic governor included the proposals in her State of the State 2026 program, which she announced in March.
Nine licensees, 51% tax rate
New York has authorized and licensed nine mobile sports betting operators: Bally Bet, BetMGM, Caesars Sportsbook, DraftKings, Fanatics, FanDuel, Resorts World Bet, Rush Street Interactive and theScore Bet. The state taxes gross gaming revenue from mobile wagering at 51%.
Joe Maloney, president of the Sports Betting Alliance, said the group will “continue to work with regulators to ensure that any proposed regulations strengthen the regulated market” in New York.
“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,” Maloney said in a statement.
According to Maloney, this framework has ended the illegal market’s monopoly, and regulated operators now generate more than $1 billion in tax revenue each year.