DraftKings Accused of Using AI to Target Losing Gamblers in Class Action

DraftKings “weaponized” artificial intelligence to identify gamblers most likely to lose money and target them with promotions encouraging them to keep betting, according to a proposed federal class-action lawsuit. A new lawsuit alleges DraftKings used machine learning to determine which customers could be encouraged to gamble more through promotions. Plaintiff Daniel Vest claims he received dozens of promotional messages in a single month. (Image: Shutterstock) West Virginia resident Daniel Vest filed the complaint Sept. 30 in Massachusetts federal court, accusing the Boston-based gambling giant of using customers’ personal betting data in ways that conflicted with its promises to promote responsible gambling. DraftKings denies the allegations. Vest, who says he has gambled thousands of dollars annually with DraftKings for several years, claims he received at least 70 emails, texts, push notifications, and other messages from the company during roughly 30 days ending Sept. 25. The plaintiff seeks to represent a nationwide class of DraftKings customers allegedly identified by the company’s AI systems as particularly responsive to gambling incentives. ‘Elastic’ Gamblers The lawsuit cites a September investigation by The New York Times, which reported that DraftKings developed a machine-learning model to determine which customers were most likely to gamble—and lose—more after receiving promotions. According to the Times, the system assigned customers an internal “elasticity” score. Gamblers deemed “inelastic”—meaning promotions were unlikely to substantially increase their activity—received fewer incentives. Those considered “elastic” were potentially more valuable promotional targets. One former employee quoted in the Times investigation said the model was designed to determine whether a customer would give DraftKings more money than the company gave them in incentives. If so, the employee said, the approach was to “open the floodgates.” Vest’s lawyers argue that clashes with DraftKings’ own privacy notices, which say customers’ personal information may be used to identify potentially problematic play and provide responsible-gambling resources. The suit alleges the company instead used such data to identify customers likely to lose more or leave the platform and encourage them to continue gambling. Massachusetts regulations prohibit sportsbooks from using customer data to promote wagers through AI or machine-learning systems that operators know, or reasonably expect, could make their platforms more addictive, notes the lawsuit. DraftKings Pushes Back “DraftKings does not use AI to target customers based on losses, nor do we use AI to target customers based on indicators of potential problem gaming,” a spokesperson told Boston.com, adding that the company intends to “vigorously defend” itself. The Massachusetts Gaming Commission is separately reviewing the use of AI and machine learning by DraftKings and other licensed sportsbooks following the Times investigation. The commission has not found that DraftKings committed wrongdoing. Vest is seeking damages, refunds, and disgorgement of money allegedly obtained through the model, and an injunction barring DraftKings from using it to encourage customers to continue gambling. The post DraftKings Accused of Using AI to Target Losing Gamblers in Class Action appeared first on Casino.org.