DraftKings faces scrutiny over AI use in targeting gamblers

An investigation by The New York Times alleges that DraftKings used artificial intelligence to target its most vulnerable customers with promotions. According to the report, which cites internal documents and interviews with more than 40 former employees, the company developed machine learning models to identify gamblers likely to lose the most money.

One specific tool reportedly assigned customers an elasticity score; a higher score indicated a player was more likely to lose money for every dollar of promotion provided. Former employees claim these models were used to direct free bets and bonus offers toward players showing signs of high loss rates or addiction. While DraftKings disputes these characterizations, stating that promotions are intended to reward engaged customers, the company noted it could not verify the specific internal documents cited in the report.

The investigation further suggests that while tools were being developed to target high-loss players, separate efforts to create AI safeguards to flag problem gamblers were reportedly shelved. DraftKings reported approximately $8.7 billion in gross gaming revenue last year, with roughly $3 billion allocated to promotions.