Losing gamblers pushed to bet more by DraftKings’ AI, report says

Two separate investigations have raised concerns about betting site DraftKings’ marketing to target problem gamblers, including its use of AI. On September 19, the New York Times reported that the company’s machine learning model targeted people who were more likely to respond to betting promotions by gambling and losing more money.

The model crunched data on each customer, including how often they bet, how much they lost, and what their daily account balances were. According to the report, it used this information to send targeted advertising to lure those people back to the site with promotions. DraftKings uses promotions to entice users into betting more. These offers include profit boosts on winnings.

At news nonprofit ProPublica, journalist Jake Pearson made himself an experimental subject. He spent thousands of dollars betting on the DraftKings app in an experiment to see how the company’s marketing would play out. He reported receiving more promotions as his losses mounted.

After he lost nearly $1,800 betting on basketball in a single evening, DraftKings invited him to a VIP tryout. Full membership followed later.

DraftKings would occasionally send automated messages reminding him to bet responsibly, he said. But he found they were no match for the product design pushing him to do more gambling.

DraftKings denied unfair targeting of gambling customers, arguing instead that its promotions reward engagement rather than losses.

The company’s machine learning model, which former insiders say was developed starting in 2023, replaced a cruder system that crunched basic numbers to report on a user’s behavior.