Artificial intelligence could face new restrictions in New York’s online sports betting market, as regulators move to limit how sportsbooks use customer data to personalize gambling offers and influence betting decisions.
The New York State Gaming Commission (NYSGC) unanimously advanced a revised proposal on Friday that would restrict licensed mobile sportsbooks, their affiliates and vendors from using AI, machine learning, algorithmic profiling and other automated systems to tailor gambling products to individual customers.
Personalized Betting Offers Under Scrutiny
The proposed rules would prohibit operators from using these technologies to personalize promotions, bonuses, odds, betting limits, marketing messages and product recommendations.
Sportsbooks would also be barred from recommending specific wagers, bet types or betting amounts. Promotions designed to increase customer spending, revenue or engagement would face restrictions as well.
The proposal includes an exception for customers who provide consent, while parimutuel horse racing would remain exempt. Rather than banning AI outright, the measure targets specific applications of the technology in sportsbook marketing and customer engagement.
New Rules Would Also Target Problem Gambling
New York is pursuing additional safeguards aimed at customers who may be experiencing gambling-related harm. The NYSGC also advanced a separate proposal requiring licensed sportsbooks to identify patrons showing signs of problem gambling and designate staff to engage with potentially at-risk customers.
Commission Chairman Brian O’Dwyer warned that customers restricted by one operator could open accounts with another. He called on sportsbooks to share relevant information to address this issue, cautioning that regulators could intervene if the industry failed to find a solution.
Both proposals form part of broader efforts to tackle underage gambling, gambling addiction and the marketing of gambling products to vulnerable customers.
As it turns out, the NYSGC modeled its revised AI proposal on a comparable regulation in New Jersey, highlighting how regulatory approaches in one state can inform discussions elsewhere. However, New York’s measures are not yet final. The AI proposal must undergo another round of public comment before returning to commissioners for further discussion and a possible vote.
Could Pennsylvania and Other States Be Next?
Pennsylvania’s booming casino and online gambling market makes the state’s regulatory direction worth watching as scrutiny of AI-powered betting products increases. Although New York’s proposals do not automatically change Pennsylvania law, their eventual implementation could provide a reference point for other regulators considering sportsbook marketing practices and responsible gambling requirements.