New York Gaming Regulators Potentially Cracking Down on Sportsbook AI Use

• The New York State Gaming Commission approved a new proposal to limit the use of AI by licensed sportsbook operators
• The proposal denies the use of AI to craft personalized promotions or messages for sportsbook customers
• Regulators also approved a proposal for additional safeguards for at-risk online sports betting customers

The New York State Gaming Commission approved two proposals at their last commission meeting to crackdown on artificial intelligence use by licensed sportsbooks and the requirement of additional safeguards for potentially at-risk online New York sports betting customers.

The commission unanimously approved a proposal that would limit artificial intelligence use by sportsbooks to craft and present customized promotions for customers based on their wagering habits. The second approved proposal will require licensed sports betting operators to follow specific thresholds to identify at-risk online sports betting customers for responsible gaming issues.

Both proposed rules were unanimously approved by the commission and will now undergo a 60-day public comment period.

Artificial Intelligence Under Evaluation

The New York State Gaming Commission will potentially crack down on the use of artificial intelligence by sportsbook operators for gaming promotions and advertisements after this initial rules proposal. The rule will now undergo a 60-day public comment period and come back to the commission for a final vote.

The proposed rule will effectively prohibit New York’s nine licensed sports betting operators from using artificial intelligence, machine learning, or generative systems to customized and deliver promotions, bonuses, odds, limits, messages or product recommendations to users.

Additionally, the rule prohibits operators from using artificial intelligence to suggest specific wagers, wager types, and wager amounts to users, while also barring the systems from creating promotions for users designed to increase spending, engagement, or revenue.

New York is the latest state to evaluate the use of artificial intelligence by its licensed operators. The Massachusetts Gaming Commission last month it would would begin evaluating each licensed sports betting operators’ use of artificial intelligence and how it affects its Massachusetts customer base. The decision to do so was based on a New York Times report in which it investigated DraftKings’ use of artificial intelligence and machine learning, alleging the company used the technology to intentionally target gamblers likeliest to lose.

This week, the commission sent letters to each of its licensed operators requesting answers to questions regarding the use of artificial intelligence and how the technology is utilized in marketing, promotions, customer engagement, and assessment of problematic or addictive gambling behavior in its customer base.

Increased Responsible Gaming Due Dilligence

Additionally, the commission approved a rules proposal that will require operators to install additional safeguards to potentially identify at-risk sports betting customers who may exhibit problem gambling behaviors.

The rule, if approved, will require sportsbooks to follow specific thresholds to identify potentially at-risk bettors. If identified, the operators will have to check-in with the identified customers and assign a representative to educate these players about responsible gaming tools and programs.

Examples of thresholds that can trigger a review are deposits of more than $10,000 in a 24-hour period or betting more than $1 million in a three-month period.

New York State Gaming Commission Chairman Brian O’Dwyer said the proposed rules will allow state operators to “illustrate its commitment” to responsible gaming.

“The industry is on notice by me and this commission that they need to solve this problem. They need to solve this problem because it is a problem. It is a problem that needs to be addressed and one this commission will require to be addressed,” O’Dwyer said. “If they don’t address it, we will address it, and they may not like the solution we come up with.”