I’ve been a vocal critic of the SAFE Bet Act ever since Rep. Paul Tonko of New York first announced it. And while I’m not particularly concerned the bill — which would basically turn the current state of online sports betting into a federally regulated sides and totals market — will pass, there is concern some of the bill’s core ideas could slide their way into the mainstream.
Some of the ideas are, admittedly, not so terrible: For instance, I’d love to see advertising of gambling — and other vices — curtailed, especially during times when children might be watching.
Other ideas — like banning prop bets — seem ridiculous.
And then there’s Tonko’s stance on artificial intelligence. He is, to be charitable, against it. Pay no mind that Bill Gates calls AI the “most important advance in technology” since the graphical user interface (you know, like Windows), Tonko wants to banish AI from the claws of gambling companies.
Using AI to create betting markets? Tonko says no. Using AI to create personalization for users? Tonko says no. Using AI to create individualized promos for users? Tonko says no.
He’s like a farrier in 1904 waving a horseshoe wildly in the air while screaming “Motor cars are the devil incarnate! Ban the horseless carriage!”
Tonko’s take is simple: Artificial intelligence gives sportsbooks one more way to get one over on us unsuspecting rubes. Never mind there’s no one talking about dissuading retail companies from using AI in their marketing, no one is clamoring for alcohol companies to stop using AI in product development and sales, no one is demanding fast food giants cease allowing their apps to personalize direct advertisements.
Nope. Just the sportsbooks are under the federal microscope on this one.
And, as I mentioned earlier, it’s not just the feds; there’s a bill in Illinois that is almost word-for-word the same as the SAFE Bet Act when it comes to ridding the state of AI in its sportsbooks.
But here’s the thing: Artificial intelligence isn’t some dark art practiced by the White Walkers or something. It’s a set of tools already in use across virtually every industry.
Boogeyman
“I don’t see why AI is being made into some kind of boogeyman, rather than just another tool for operators aiming to improve their product and marketing, which ultimately should better serve customers,” said Brad Allen, senior analyst at Eilers & Krejcik Gaming.
Allen points out that FanDuel has launched a chatbot designed to offer customers stats and suggested parlays, while DraftKings is using AI for customer service interactions and software development.
Chris Reynolds, the co-founder and CEO at Epoxy.ai, a company that helps sportsbooks personalize their offerings to customers, notes gambling companies are not all that dissimilar from other businesses when it comes to artificial intelligence
“Whether it’s Spotify, Netflix, your weather application, eBay, Amazon, all of these services have integrated some type of machine learning or AI into their business to create a better customer experience,” Reynolds said.
Reynolds believes fighting against AI in sports betting is futile.
“It’s swimming against the current to think that you’re gonna be able to extract machine learning and AI from this business or, frankly, any other,” he said.
And there’s a practical problem with banning AI in sportsbooks: How would it even work?
“Let’s say you ban AI in gambling. What does that even mean?” Reynolds said. “How could you even navigate that? How are you going to audit that?”
What is under the hood?
Dr. Timothy Fong of UCLA’s Brain Research Institute and co-director of the school’s Gambling Studies Program is pretty agnostic when it comes to AI in gambling products, though he does note he’s not thrilled with the opaque nature of some of the live and micro-bet offerings.
“From the consumer perspective, we really have absolutely zero idea how the markets are made and placed in front of us,” Fong said.
Fong, who studies gambling disorders professionally and will sometimes enjoy offerings from Underdog Fantasy in California, describes modern online sports betting as “fast food gambling” — highly processed offerings whose creation methods remain mysterious to users.
“Sports betting online leaves a tremendous digital footprint like we’ve never seen before,” he said, noting that these footprints can give sportsbooks a leg up in potentially exploiting users, tailoring -EV bets that AI believes we might be tempted to wager on.
But Fong also sees another side to AI.
“Imagine AI allowing us to detect who’s really problematic in their gambling,” he said. “And then at an earlier stage the companies get to them, preventing them from betting until they talk to someone.”
Joe Maloney, senior vice president of strategic communications for the American Gaming Association, points to responsible gambling tools already in use as a result of AI.
“There are a number of tools that are already in place today,” Maloney said. “Tools that are helping to monitor and determine where somebody’s gambling behavior is becoming irregular.”
Maloney warns that banning AI would set the industry back significantly.
“Let’s say tomorrow they institute a ban on AI in gambling products,” he said. “The apps would look like they were rolled back 10 years.”
And what would 10 years ago look like? Think no live bets, limited prop bets, and very limited markets.
Middle ground
Rather than banning artificial intelligence, Fong suggests a more measured approach.
“I don’t think you can just eliminate a potential business tool that no other business in America is forbidding,” he said.
Instead, he advocates for transparency.
“I think in a perfect world we have the industry be very transparent about how they make the bets,” Fong said. “A video detailing the basic process. And maybe mark options that were created by AI. ‘This bet was powered by AI,’ or something like that.”
Maloney also points out the current laws, rules, and best practices already do much of the heavy lifting.
“We can all agree that the regulated framework in this country, states and tribes, is providing appropriate guardrails, is enforcing rules and restrictions, is sensitive and responsive to the public health concerns,” said Maloney.
In addition to all this, there’s also the ever-looming threat of black- and gray-market operators who are playing the same game without governmental restrictions.
The conversation around AI in gambling is still evolving, but it’s clear that a knee-jerk ban isn’t the answer. Instead, thoughtful regulation that acknowledges both risks and benefits would better serve consumers and the industry.
“The industry can do a better job explaining use cases around AI and how they’re actually helping grow the business in a positive way, and creating better users, better experiences,” said Reynolds.
Tonko’s crusade against AI in gambling feels less like consumer protection and more like some orthodox Luddism. Treating AI as a uniquely dangerous force in sports betting while ignoring its widespread use across all consumer industries isn’t just inconsistent — it’s counterproductive.
