New York proposes ban on AI personalization in betting

The New York State Gaming Commission proposed on 9 October 2026 to prohibit any licensee in the state from using AI systems to personalize offers or suggest bets, and it presumes any personalized offer to be unlawful unless proven otherwise. In the same session the Commission also proposed a specific rule for mobile sports betting that requires identifying, contacting and, if appropriate, closing accounts of bettors deemed to be at risk.

Rule on AI in betting in New York

The proposal would introduce a new section, Part 5404, into the regulations of the New York State Gaming Commission. It applies to all licensees in the state: casino operators, mobile sports betting operators, video lottery agents, racetracks, off‑track betting corporations, account wagering providers and lottery messengers, as well as any affiliate, agent or vendor acting on their behalf.

No licensee may use an automated decision system, algorithmic profiling, machine learning or generative system that processes a customer's data to select, personalize, time or deliver any promotion, bonus, odds, limit, message or product recommendation, "regardless of purpose or effect", nor to suggest a wager or amount. Human review does not exempt the activity and customer consent is not an exception, except for a single consent route authorized for horse‑racing apps (see below).

The rule creates a rebuttable presumption: any offer whose recipient, content, timing or amount varies between customers in a way associated with their data is presumed unlawful, unless the licensee proves by clear and convincing evidence — supported by records — that the variation arose solely from published, objective criteria. Required records must inventory each system that processes individual data and retain inputs, outputs, model versions and recipients for seven years. The licensee's chief executive must certify compliance annually. Each affected customer would count as a separate violation.

It remains legal to offer uniform promotions to all eligible customers and to use systems dedicated exclusively to fraud prevention, anti‑money‑laundering compliance, age verification or responsible‑gaming interventions. Promotional criteria may not be based on wagering history, spend, losses or inferred vulnerability, except for loyalty tiers based on volume.

Limited exception: horse racing

The only consent route allows a separate opt‑in app for horse racing that may suggest pari‑mutuel bets based solely on the customer's racing history. That option is disabled by default and requires re‑affirmation of consent every 12 months.

Detection of at‑risk players in mobile sports betting

The second proposal focuses on mobile sports betting and draws on a New Jersey proposal, according to staff memoranda. The text establishes 11 automatic triggers that would force a customer review and a three‑stage intervention procedure that can culminate in account closure.

Financial triggers include: deposits greater than $10,000 in 24 hours, deposits over $100,000 in 90 days and wagers exceeding $1,000,000 in 90 days. Behavioral triggers include three incomplete visits to the self‑exclusion page within 30 days, three consecutive limit increases in one week and a 50% increase in login start time.

The proposed intervention process is sequential: first the operator will send an email explaining limits and available supports; second, before the customer may bet again they must watch a Commission‑approved video; third, the operator's responsible‑gaming officer will make a telephone call. If the officer cannot reach the customer after three calls, the account will be suspended. If, after the call, the customer is still considered at risk, the account will be closed. Withdrawals may not be cancelled for three days, and cooling‑off periods must last at least 72 hours with no reversal allowed.

Chair Brian O'Dwyer said after the vote that "the industry is on notice" and urged the nine licensed mobile operators to share data to prevent a restricted customer at one house from opening an account at another; however, the proposed text does not impose that obligation.

Context, timelines and administrative process

The Commission voted in favour of both proposals at its 9 October 2026 meeting in New York City; ProPublica reported the vote was unanimous. Both texts reference Governor Kathy Hochul's State of the State 2026 program, according to Commission memoranda. Earlier drafts, circulated in March, received industry comments. The proposals now enter a 60‑day public comment period before returning to the Commission; no final vote date has been set.

Staff memos and the meeting book contain the full text of the Part 5404 proposal (AI) and the amendments to section 5330.34 related to at‑risk customers.

Expected reactions and friction points

The most controversial change is not the ban itself but the reversal of the burden of proof: the presumption of illegality will cause most targeted offers to start as presumed violations and will force operators to maintain records many were not designed to produce. Counting each affected customer as a violation could turn a campaign into thousands of breaches. The scope is also broad: it reaches physical casinos, video lottery agents and racetracks as well as online platforms.

ProPublica cited an experiment in which a reporter deposited $21,600 in less than eight weeks without triggering a review, and noted that DraftKings says it already follows New Jersey thresholds. The Responsible Online Gaming Association submitted comments in May; the president of the Sports Betting Alliance, Joe Maloney, said the industry will continue to cooperate with regulators. Massachusetts has asked about the use of AI by sportsbooks and Maine has said it has no AI gambling rules.

Operators, compliance advisers, and CRM and model providers must study the recordkeeping requirements, the definitions of "individual data" (including device identifiers and cohorts), and the practical operation of the triggers before submitting comments during the 60-day period. To follow the official documentation consult the regulation section of the commission.

"The industry is on notice," said Brian O'Dwyer after the vote, according to coverage by CDC Gaming and ProPublica.

The Commission's decision will set the scope of control over algorithmic personalization and mandatory interventions in a market that taxes mobile revenue at 51%, adding a fiscal dimension to the debate.