DraftKings Accused of Using AI to Target Problem Gamblers for Promotions

Former DraftKings employees have alleged that the company utilized artificial intelligence and data science to target customers, including those struggling with gambling addiction, with promotional offers. These employees claim that internal models were designed to identify gamblers who were most likely to increase their wagers if presented with incentives, a practice described as predatory.

According to a report citing these former employees, DraftKings developed a metric called "elasticity" to estimate the potential increase in a gambler's wagers based on promotional offers. One former data analyst, Jayden Butts, stated that a problem gambler represented "the best investment" for the company, as the goal was to determine if promotional spending would yield more betting.

"And if the answer is yes, open the floodgates," Butts told The New York Times. Another former analyst described the technology as "predatory" and explained the strategy as, "If you lose more, we give you more, so you keep playing more."

DraftKings has disputed the report's premise, with a spokesperson calling it "built on a false premise" and characterizing the reporting as portraying "routine promotional reinvestment practices common across consumer-facing industries as scandalous." The company stated it has evolved its development efforts from early-stage data models to a "regulator-informed, evidence-based responsible engagement system."

The company highlighted its commitment to responsible gaming, noting the appointment of a chief responsible gaming officer who reports directly to the CEO and a department of over 50 employees focused on responsible engagement. "Responsible engagement is not a side initiative," the spokesperson said, "It is embedded across our business and essential to DraftKings’ long-term sustainability."

The report detailed the experience of Bryan Biehl, who lost nearly $70,000 gambling online, with over half of that amount through DraftKings. Biehl stated that even after beginning therapy for gambling addiction in late 2024, he received numerous promotional emails and bonuses from the company, which he felt were a significant relapse risk. Emails reviewed by the newspaper showed Biehl received 40 promotions in the first two weeks of December 2024.

Biehl eventually placed himself on self-exclusion lists after a final gambling session on Christmas Day. DraftKings declined to comment on Biehl's specific case but reiterated that its promotions are "directed toward customers who demonstrate sustained, engaged use of our platform, not toward customers based on their losses." The company also stated it "rejects any implication that its marketing practices are unfair or improperly targets customers."

Promotional spending is a significant aspect of DraftKings' business. The company reportedly generated approximately $8.7 billion in gross revenue from sports betting and online casino customers in the previous year, while distributing about $3 billion in promotions, according to research cited by The Times. DraftKings has previously acknowledged its use of data science and AI to personalize promotional spending, with an executive reportedly telling investors that analytics improved margins on promotion-driven bets.

Separately, employees working on responsible gambling initiatives developed predictive technology to identify customers at risk of developing gambling problems. Former data scientist Nestor Hernandez began working on a machine-learning model in mid-2024 to predict potential trouble for users days or weeks in advance based on their behavior. This project was reportedly later shut down. Lori Kalani, DraftKings' chief responsible gaming officer, told The Times that the company decided against using such predictive technology for problem gambling identification because it was not considered "evidence-based."