The New York State Gaming Commission has proposed new regulations that would require licensed mobile sports betting operators to strengthen their monitoring of potentially harmful gambling behaviour and restrict the use of artificial intelligence in targeted promotions.
The proposals would affect licensed betting apps such as DraftKings and FanDuel, introducing mandatory responsible gambling oversight, automatic reviews of potentially risky customer activity and new limits on how AI and machine learning can be used to personalise betting offers.
The draft rules will undergo a 60-day public comment period before the commission decides whether to adopt them.
Operators Could Face Mandatory Player Risk Reviews
Under the proposed framework, every licensed mobile sports betting operator would have to appoint a dedicated responsible gambling lead. This employee would be responsible for identifying customers who may be at risk of problem gambling, ensuring they receive information about treatment and support resources, and restricting their access to direct advertising materials.
The commission also wants betting apps to automatically flag accounts for a due diligence review when specific activity thresholds are reached.
These include deposits exceeding $10,000 within 24 hours, deposits totalling $100,000 over 90 days, or wagers exceeding $1 million over the same period.
Additional triggers would include ending two or more betting sessions in the same week with a balance below $1, increasing total wagers from one session to the next within that week, or depositing funds from more than two sources in a 24-hour period.
The proposed thresholds are intended to help operators identify potentially harmful gambling patterns. Similar requirements already exist in neighbouring New Jersey.
Proposed Rules Would Restrict AI-Powered Betting Promotions
The commission has also proposed restrictions on the use of artificial intelligence and machine learning in mobile betting products.
Under the draft rules, operators would be prohibited from using these technologies to select, customise, time or deliver certain promotions, bonuses, odds, limits, messages and product recommendations to targeted users. The proposals would also restrict AI-driven suggestions for wagers, wager types and wager amounts, as well as promotions designed to increase spending, engagement or revenue.
The initiative comes amid growing scrutiny of how betting companies use customer data and automated systems to personalise their products. Recent reporting has raised questions about whether AI-driven marketing can target people who may be more vulnerable to gambling-related harm.
Gaming Commission member John Crotty acknowledged that the proposed AI rules would benefit from further expert input, noting that the commission does not have specialist expertise in every aspect of the technology.
Regulators Warn Operators to Take Action
Commission Chair Brian O’Dwyer said the industry had an opportunity to address problem gambling concerns itself, warning that regulators would intervene if operators failed to take adequate action.
The proposals come as mobile sports betting faces increased scrutiny over its impact on younger adults and the wider population. A University at Albany study cited by the Times Union found a 15% increase since 2022 in the proportion of students participating in some form of gambling, with more than half reporting gambling activity.
The commission has also acknowledged a potential weakness in account-level restrictions: customers excluded from one betting app could move to another licensed platform. New York has eight legal mobile betting apps, according to the report.
The Sports Betting Alliance, which represents the mobile sports betting industry, said operators were willing to work with the commission on additional regulations while emphasising the role of the existing regulated market and its consumer protections.
60-Day Consultation Period Ahead
The proposed regulations are not yet in force. Following their introduction, they will undergo a 60-day public comment period, after which the commission will consider whether to proceed with adoption.
If approved, the measures would place additional responsibilities on licensed operators in New York, particularly in customer monitoring, responsible gambling interventions and the use of AI in marketing and product personalisation.
The outcome could also influence wider discussions about how gambling regulators should oversee data-driven betting products while balancing commercial practices with player protection.