Artificial intelligence is rapidly transforming the online gambling industry, but the technology that promises enhanced player experiences and better security is also raising serious concerns about addiction and exploitation. As operators race to implement AI-powered tools, lawmakers and regulators are scrambling to keep pace.
The Push for Federal Regulation
The most significant development came in September 2024 when Representative Paul Tonko and Senator Richard Blumenthal reintroduced the SAFE Bet Act. This federal legislation would prohibit sportsbooks from using AI to track individual bettor behavior, generate personalized promotions, or create AI-driven betting products. The bill represents a direct challenge to the industry’s most profitable AI applications.
At the state level, Illinois introduced SB 2398 in spring 2025 to ban AI from creating “harmfully tailored or addictive betting products.” Though the bill stalled, it’s expected to return in 2026. Meanwhile, Massachusetts Gaming Commission chair Jordan Maynard made waves in June 2025 by suggesting that if operators can use AI to target bettors, regulators should mandate its use to promote healthy behaviors instead.
The European Union has taken the strongest stance, classifying gambling AI applications as “high risk” under its AI Act, subjecting them to stringent transparency and algorithmic auditability requirements.
How the Industry Uses AI
The gambling industry argues that AI delivers genuine benefits. Fraud detection has improved dramatically—AI-enhanced platforms have reduced fraud-related losses by 60%, according to Zipdo’s Education Report. The technology can catch bonus abuse, fake accounts, and suspicious transactions in real-time, even detecting match-fixing signals before damage occurs.
AI-powered chatbots now handle up to 70% of customer service queries without human intervention, with projections suggesting that figure will reach 80% by 2029. For operators, this means lower costs and faster response times. For players, it means immediate assistance with account questions and payment disputes.
Perhaps most importantly, AI can promote responsible gambling by monitoring player habits and identifying red flags like chasing losses. When something seems off, AI systems can instantly send alerts or trigger self-exclusion—a capability that’s becoming a regulatory requirement in many jurisdictions.
The Dark Side of Personalization
But here’s where things get murky. The same AI that identifies problem gamblers can also be weaponized to exploit them. Industry insiders acknowledge that AI can trigger targeted nudges after losing streaks, offering limited-time promotions if another bet is placed quickly. This creates a cycle that can lead players to spend more than they can afford.
The technology operates as what experts call a “black box”—opaque systems where even operators may not fully understand how decisions are made. This lack of transparency becomes especially problematic when significant financial decisions are automated.
Operators face a fundamental contradiction: they’re required to collect extensive data on potentially vulnerable individuals to protect them from gambling harm, yet this same data collection raises serious privacy concerns.
Industry Adoption Accelerates
Despite the ethical concerns, AI integration is accelerating. Over 70% of major online gambling operators have already integrated AI-driven tools into at least one layer of their platform. In Asia-Pacific markets, the adoption is even more aggressive—by the end of 2025, all major casino properties in Macau, the Philippines, Australia, and New Zealand are expected to deploy smart table technology incorporating AI.
The Bottom Line
AI in gambling isn’t inherently good or bad—it’s a powerful tool that can either protect vulnerable players or exploit them more effectively. The question facing regulators, operators, and society is whether the industry can be trusted to wield this technology responsibly, or whether strict federal oversight is needed to prevent AI from becoming the house’s ultimate edge.
As the SAFE Bet Act and similar legislation work through the political process, one thing is clear: the gambling industry’s AI revolution is forcing a long-overdue conversation about where innovation ends and exploitation begins.
