BOSTON — DraftKings built a data science operation that can spot its most profitable customers and steer betting incentives their way, but the Boston-based company has not turned those same predictive tools toward finding gamblers who may be in trouble, according to reporting by The New York Times. The company’s models analyze user behavior to decide who gets free bets, deposit bonuses and odds boosts. Those promotions tend to land with high-value customers — the ones who bet often and bet heavily.
The same machine learning and statistical techniques that flag a heavy bettor for a marketing list can flag the warning signs of problem gambling: chasing losses, rising bet sizes, longer and longer sessions. DraftKings has not deployed them for that purpose.
A tool that cuts both ways
That gap sits at the center of a widening debate over artificial intelligence in the gambling industry. The New York Times report noted that DraftKings has invested heavily in its data science team, which includes dozens of employees with expertise in machine learning and statistics. The company uses AI to personalize the betting experience, recommend bets and optimize marketing campaigns.
Critics argue the same technology could identify and help problem gamblers but is not being used that way, raising ethical questions about where the industry’s priorities lie. DraftKings says it is committed to responsible gaming.
The company points to deposit limits, time limits and self-exclusion options, and says it complies with state regulations. It has partnered with organizations including the National Council on Problem Gambling and has supported research into problem gambling. The Times report suggests the company’s use of AI for profit maximization may outweigh its use for harm prevention.
The stakes are not abstract. The National Council on Problem Gambling estimates about 2 million US adults meet the criteria for severe gambling problems, with another 4 to 6 million experiencing mild or moderate problems.
The American Gaming Association estimated Americans wagered $119.8 billion on sports in 2023, up from $93.2 billion in 2022.
Growth, and the scrutiny that follows it
DraftKings was founded in 2012 and went public in April 2020 through a merger with Diamond Eagle Acquisition Corp., a special purpose acquisition company, trading on the Nasdaq under the ticker DKNG. Its revenue climbed to $3.7 billion in 2023 from $2.2 billion in 2022, a surge fueled as more states legalized sports betting after the Supreme Court’s 2018 decision in Murphy v. National Collegiate Athletic Association struck down the Professional and Amateur Sports Protection Act of 1992.
As of 2024, sports betting is legal and operational in more than 30 states plus the District of Columbia. Jason Robins, a co-founder, is CEO.
Regulators and lawmakers have taken notice of how AI is used in gambling. In 2023, the Massachusetts Gaming Commission fined DraftKings $20,000 for mailing promotional materials to self-excluded individuals, a violation of state regulations. The company has also faced lawsuits over its promotional practices, including a 2023 class-action suit in Massachusetts alleging that a $1,000 deposit bonus offer was misleading.
DraftKings has denied wrongdoing. What to watch next is whether the same models that decide who gets a bonus get repurposed to decide who needs help — and whether regulators, amid growing calls for stricter oversight and more funding for addiction services, decide to require it.
