Is AI Running Online Sportsbooks? State Regulators Demand Answers

Artificial intelligence is expanding rapidly across industries, and Massachusetts gaming regulators want to determine whether AI has become the norm for online sportsbooks. Fenway Park’s “Green Monster” is pictured with a BetMGM Sportsbook logo. Gaming regulators in Massachusetts want insights on how state-licensed online sportsbooks are using AI in their daily operations. (Image: Shutterstock) The Massachusetts Gaming Commission (MGC) recently notified its licensed online sportsbooks that it wants answers about how they’re using AI and other machine learning technologies in their operations. The state gaming regulator is asking that each online sportsbook reveal how such automated tools are utilized and what sort of safeguards the platforms have on the technologies. The letter asks how AI is involved with marketing and promotions, responsible gaming, and VIP schemes. The MGC says the request is voluntary, and therefore sportsbooks’ disclosures will not be made public. We will consider any responses to be voluntarily provided to the MGC for use in developing policy related to the use of AI and such responses will be kept confidential,” the letter to sportsbooks read. The MGC regulates seven online sportsbooks: Bally Bet, BetMGM, Caesars Sportsbook, DraftKings, Fanatics, FanDuel, and theScore. Sportsbook Compliance The MGC is among the most proactive state gaming regulators in the nation, meeting far more frequently than other state gaming bodies that have many more casinos and online sportsbooks. Massachusetts is home to only three casinos: Encore Boston Harbor, MGM Springfield, and Plainridge Park. The state also dedicates more funding to problem gambling services than any other state. The AI inquiry is to determine if online sportsbooks are benefiting from AI by targeting bettors who often lose, and if audit protections exist to satisfy consumer protection laws. “Does the Operator assess whether a marketing or promotional model could encourage increased wagering or otherwise contribute to problematic or addictive gambling behavior?” the AI letter asks. “What testing or validation does the Operator perform to determine whether an algorithm, AI system, or machine-learning model may encourage increased wagering?” The MGC also asks if AI models recognize a consumer’s gambling-risk indicator in determining how to craft a marketing incentive, and if AI ever excludes a patron that is detected to be exhibiting problematic betting behavior. Massachusetts Sports Betting Sports betting in Massachusetts began in person on Jan. 31, 2023, and online sportsbooks took their first bets on March 10, 2023. Through August 2026, the Commonwealth has collected more than $500 million in state taxes from legal sports gambling. Retail oddsmakers share 15% of their sports betting revenue with the state. Online sportsbooks are taxed higher at 20%. The sportsbooks have taken more than $25 billion in bets, generating revenue upwards of $2.5 billion. The post Is AI Running Online Sportsbooks? State Regulators Demand Answers appeared first on Casino.org.