New York Moves to Restrict AI-Tailored Gambling Promotions

The New York State Gaming Commission (NYSGC) used a call Friday to spell out proposals limiting the use of AI in personalized gambling promotions.

New York has a relatively new online sports betting industry. However, regulators are concerned with the way some operators use artificial intelligence to tailor promotions to customers.

The NYSGC has now decided to implement measures to restrict operators from using AI and profiling.

AI, Suggested Wagers to be Curbed

The wide-ranging meeting addressed two key areas for New York’s regulated online gambling sites.

First is the use of artificial intelligence to personalize and tailor promotions to customers. While AI won’t be outlawed altogether, its use in targeting customers will be.

Also out would be a sportsbook recommending certain sports wagers based on customer data. However, customers may be able to opt out of the restriction, depending on how the measure progresses. Changes in the use of AI at sportsbooks will be brought back for a vote among regulators at a future date.

What Was Voted On: A Snapshot

• A ban proposed on AI-driven promotions
• Suggested wagers for customers will be prohibited
• Operators required to detect customers with problem gambling behaviors
• Data-sharing initiative to protect consumers across multiple platforms

Move to Protect Vulnerable Gamblers

The NYSGC will also advance protections for at-risk gamblers at New York’s nine licensed online sportsbooks. The list includes some major operators, including DraftKings and FanDuel.

Sportsbooks must now identify customers who show evidence of problem gambling and engage. This would bring New York’s framework in line with more established industries, such as New Jersey’s.

Under the proposals, customers making large daily deposits will be flagged and contacted.

The mobile betting industry, NYSGC chair Brian O’Dwyer said, “has long maintained that they considered integration of responsible gaming practices a significant element” of their business operations.

If the industry doesn’t address responsible gambling, he added, the commission will step in and “they [mobile sportsbook operators] may not like the situation or the solution that we come up with.”

NYSGC: New York Gambling Operators ‘On Notice’

New York launched retail sports betting in 2019, with mobile sportsbooks going live three years later.

The number of sports betting operators is still small compared to other states with regulated gambling. However, the NYSGC obviously feels enough is not being done to protect current customers.

The new rules, O’Dwyer said, were designed to “provide an opportunity for the industry to illustrate its commitment” to better consumer protection.

The gambling industry, he added, was “on notice” to tackle problem gambling.

New York Betting Revenue Down

New York’s sports betting industry is, like other states, experiencing a drop following the World Cup summer.

However, it’s an industry worth protecting in one of the country’s most populous states.

Despite New York only having nine sports betting operators and a post-World Cup lull, overall handle is looking healthy.

Mobile sports wagering handle for August 2026 was $1.7 billion, with GGR (Gross Gaming Revenue) at $168.4 million. That marked a drop of nearly $50 million on the previous month. Overall handle was nearly $400 million down on April, despite August traditionally attracting preseason bets on the new NFL season.

Prediction Markets in Crosshairs

New York regulators are also fighting to protect its sports betting operations with a parallel battle against the prediction markets.

Gov. Kathy Houchul, a long-term advocate for better betting practises in the Empire State, last month issued a lawsuit to Polymarket.

Hochul and New York AG Letitia James allege that Polymarket is advertising illegally to New Yorkers in violation of state gambling laws.

Given that the New York gaming regulators are tightening up the state’s sports betting best practises, expect more battles on the prediction market scene too.