DraftKings Accused of Using AI to Target Vulnerable Gamblers, Lawsuit Says

_{Promotions like this one shown are allegedly a result of DraftKings using AI for marketing purposes. (Photo: Koshiro K / Alamy)}

A class action lawsuit filed in a Massachusetts court on Wednesday accuses DraftKings of using artificial intelligence to target potential problem gamblers in an effort to keep them betting on the platform.

Daniel Vest, who filed the lawsuit in U.S. District Court in Boston, claims in the suit that he was a victim of targeted promotions after having gambled thousands of dollars on DraftKings in West Virginia.

Lawsuit: DraftKings ‘Weaponized AI’ to ‘Exploit Users’

The proposed class action was filed by Vest on behalf of himself and other gamblers who he alleges were similarly targeted.

According to Vest, he received approximately 70 emails, texts, and other messages from DraftKings in a one-month period leading up to Sept. 26. He says that these messages encouraged him to deposit more money into his DraftKings account. According to the lawsuit, DraftKings has collected data points on each of its users to analyze their spending habits and their typical losses.

“New AI tools are also making companies better at understanding customers’ vulnerabilities, which may enable them to manipulate user behavior in ways beneficial for the company but not for customers,” the lawsuit states, quoting Duke University professor Ali Makhdoumi. “DK has weaponized AI to do just that – understand and exploit users’ vulnerabilities to financially benefit the company.”

The lawsuit alleges that DraftKings – which is headquartered in Massachusetts – violated state law and state gaming regulations when it failed to disclose to users that it was using either AI or other machine learning tools for such purposes.

Times Article Outlined DK’s Data Analysis Efforts

Similar allegations were made in a New York Times article published on Sept. 19. In that article, investigative reporters used interviews with former DraftKings employees and internal documents to document the company’s alleged use of tools that would identify which users would make use of promotions to gamble – and eventually lose – more money. The article also cites sources who say that DraftKings has declined to use that same technology to identify, warn, or help potential problem gamblers.

“It’s as predatory as it sounds,” one former DraftKings analyst told the Times, while speaking anonymously. “If you lose more, we give you more, so you keep playing more.”

Vest’s lawsuit heavily quotes the New York Times article, and the Massachusetts Gaming Commission has said that it would look into the allegations. However, DraftKings has denied that it uses such tools.

“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 DraftKings spokesperson said in a statement released Thursday. “We intend to vigorously defend any potential lawsuits on the matter.”

DraftKings issued a similar denial after the New York Times article was published.

The lawsuit seeks to award damages to DraftKings customers who were impacted by the alleged promotions and AI targeting practices. It also seeks an injunction to prevent the company from continuing to use such models to target users with promotions and messages going forward.

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