New York Moves to Restrict AI in Sports Betting Promotions
United States.- 15 October 2026 | www.zonadeazar.com The New York State Gaming Commission (NYSGC) has advanced a regulatory proposal seeking to restrict the use of artificial intelligence (AI) to personalise sports betting promotions, bonuses and wagering recommendations.
Commissioners unanimously approved the revised proposal for further consideration on 9 October 2026, establishing potential new limits for mobile sportsbook operators, technology suppliers and affiliated businesses.
The initiative aims to strengthen consumer protection and prevent automated systems from using personal information to encourage potentially harmful gambling behaviour.
However, the proposal has not yet become a final regulation and must undergo another public consultation process.
Restrictions on Personalised Promotions
A central element of the proposal concerns limiting technologies capable of analysing individual betting behaviour.
Under the proposed rules, operators would be restricted from using AI-driven customer profiling to personalise:
- Promotions and bonuses.
- Betting odds and limits.
- Marketing messages.
- Product recommendations.
- Types of wagers.
- Suggested betting amounts.
The restrictions would cover several technologies, including machine learning, generative AI and algorithmic profiling.
The objective is to prevent automated tools from encouraging customers to increase their spending or gambling activity.
Technology Suppliers and Affiliates Also Covered
The proposal extends beyond companies directly operating mobile sportsbooks.
It would also cover technology providers and commercial affiliates involved in marketing and personalisation.
This approach seeks to prevent operators from circumventing restrictions by outsourcing promotional activities to third parties.
Automated systems operated by external suppliers would be subject to the same requirements when used to develop customer-specific promotions or recommendations.
The proposed rules could therefore affect businesses specialising in digital marketing, data analytics and customer engagement technology.
Exceptions for Customers Providing Consent
The initiative does not seek to prohibit artificial intelligence entirely within sports betting.
The proposed restrictions would not apply to customers who provide consent to receive certain personalised services.
Furthermore, pari-mutuel horse racing would be exempt.
The Commission based its approach on a comparable regulation in New Jersey, which places limits on certain commercial applications of automated technology without introducing a complete ban.
The objective is to establish specific conditions for AI usage rather than prevent its adoption across regulated gambling platforms.
Additional Proposal to Identify At-Risk Bettors
During the same meeting, the NYSGC also advanced a second initiative focused on identifying customers who may be experiencing gambling-related problems.
The proposed regulation would require licensed sportsbooks to identify customers displaying indicators of potentially harmful gambling behaviour.
Each operator would also need to appoint a designated individual responsible for engaging with those customers regarding responsible gambling concerns.
The measure seeks to establish more direct intervention procedures and strengthen existing consumer protection obligations.
This proposal also remains under regulatory consideration.
Brian O’Dwyer Calls for Greater Industry Cooperation
Brian O’Dwyer, Chairman of the NYSGC, raised concerns about customers who face restrictions at one sportsbook subsequently opening accounts with other licensed operators.
According to O’Dwyer, this behaviour could undermine the effectiveness of safeguards intended to prevent gambling harm.
He encouraged licensed businesses to develop cooperation and information-sharing arrangements to address the problem.
The Chairman also warned that if the industry fails to establish effective solutions, the Commission may introduce additional regulatory requirements.
His comments underline the regulator’s expectation that operators should play an active role in identifying and protecting vulnerable customers.
Kathy Hochul’s Responsible Gambling Agenda
Both proposals form part of the initiatives promoted by New York Governor Kathy Hochul during 2026.
The programme addresses:
- Prevention of underage gambling.
- Protection of vulnerable consumers.
- Restrictions on marketing to at-risk customers.
- Gambling addiction prevention.
- Greater accountability for licensed operators.
The measures were included in the Governor’s policy agenda in March 2026.
The NYSGC’s latest action represents another step towards developing these initiatives.
Nine Licensed Mobile Sportsbooks in New York
New York currently has nine licensed mobile sports betting operators.
The authorised businesses are:
- Bally Bet.
- BetMGM.
- Caesars Sportsbook.
- DraftKings.
- Fanatics.
- FanDuel.
- Resorts World Bet.
- Rush Street Interactive.
- theScore Bet.
These operators would be subject to the new requirements if the regulations are adopted.
New York currently applies a 51% tax rate on gross gaming revenue from mobile sports betting, among the highest in the US market.
Industry Responds to the Proposal
Joe Maloney, President of the Sports Betting Alliance, expressed the industry’s willingness to continue cooperating with regulators.
He highlighted that legal mobile sports betting has operated in New York since 2022, under a licensing and regulatory supervision framework.
According to Maloney, the system has enabled adults to access legal betting services through regulated businesses subject to consumer protection obligations.
He also noted that licensed operators currently generate more than US$1 billion in annual tax revenue for the state.
The association believes future regulations should strengthen the legal market while maintaining effective consumer safeguards.
Artificial Intelligence and Consumer Protection
The proposal reflects an increasingly important debate within iGaming: how advanced personalisation technologies can be used without encouraging harmful gambling behaviour.
Artificial intelligence enables operators to analyse extensive customer data and adapt different platform features to individual users.
However, regulators believe safeguards are necessary when these technologies are used to influence betting decisions.
New York’s proposal could particularly affect automated marketing strategies, individualised promotions and wagering recommendation systems.
At the same time, its consent-based exceptions would allow certain uses of AI technology to continue.
Next Steps and Impact
The NYSGC will conduct another public consultation process concerning the proposed AI restrictions and new requirements for identifying at-risk bettors.
Both measures will subsequently return to the Commission for further consideration and a possible vote.
The proposed restrictions are not currently in force.
If approved, New York’s nine licensed mobile sportsbooks and their technology partners would need to review their personalisation, marketing and betting recommendation systems.
The proposal represents a potential shift in the relationship between artificial intelligence, sports betting and consumer protection, with implications for operators, technology suppliers and affiliate businesses.
Its development could provide a reference point for other US states considering limits on the commercial use of algorithms within regulated gambling markets.
Editó: @fonta
