Massachusetts opens formal review of DraftKings’ use of AI in sports betting promotions

The Massachusetts Gaming Commission (MGC) has started a formal review of how DraftKings and other regulated sports betting operators in the state use artificial intelligence to target promotions. The issue matters for high-risk PSPs because the case sits right at the intersection of automated marketing, player data, and regulator scrutiny.

1. The review follows a The New York Times report that said DraftKings used machine learning to identify customers most likely to keep betting and losing money after receiving offers. MGC chair Jordan Maynard said in a public meeting that he asked CEO Dean Serpa and Commission staff to contact DraftKings and get more detail on the practices described in the report.
2. So far, the regulator has not concluded that DraftKings violated any rules. But the review is active, and Serpa plus the Commission’s technical team are expected to meet with DraftKings representatives to examine how the company applies artificial intelligence and machine learning in promotional activity.
3. The New York Times report was based on interviews with more than 40 former DraftKings employees, internal company documents, and customer betting records. According to that reporting, DraftKings built machine-learning systems that could analyze users’ betting histories to identify those most likely to continue gambling and losing after a promotion.
4. Former employees quoted in the report said they were concerned the technology could harm people with gambling addiction. The report also said DraftKings allegedly scrapped an internal project designed to detect bettors who might need help based on their behavior patterns.
5. DraftKings denied the report’s conclusions, saying it categorically rejects any suggestion that its products are designed to create addiction. The company also said it does not use AI to rank customers by losses or to target advertising based on signals of a possible gambling problem, and it said it complies with Massachusetts sports betting rules.

Massachusetts already has specific rules on automated technology in sports betting marketing: regulated operators are prohibited from using customer data to send promotions through automated systems, including AI, when they know or should know the recipient has a gambling problem. That is the part compliance teams will be reading twice, not once.