TLDR
- A New York Times investigation says DraftKings used AI to send promotions to gamblers likely to lose the most money.
- Former employees say a separate AI tool meant to flag problem gamblers was shelved in 2025.
- DraftKings disputes the characterization and says promotions reward engaged customers, not losers.
- The company said it could not verify the internal documents cited in the report.
- DraftKings reported about 8.7 billion dollars in gross gaming revenue last year, with roughly 3 billion dollars spent on promotions.
DraftKings built a machine learning model in 2023 to predict which gamblers were likely to lose the most money from promotions, according to a New York Times investigation published this week.
The report is based on interviews with more than 40 former employees and internal company documents. It says the company used the tool to guide free bets and bonus offers toward those players.
Jayden Butts, a former data analyst at DraftKings, was one of the people who tested the model. He said each customer received an elasticity score.
A higher score meant a gambler was more likely to lose money for every dollar of promotion sent their way. Butts said he was told the company wanted to redeploy its promotional budget toward these players.
“We are looking for traits and features that we can target that indicate a good investment,” Butts told the Times. He said that by that logic, a problem gambler would be the ideal target.
DraftKings tested the model on about 5,000 casino players in September 2023 before expanding the test. Butts was let go from the company in late 2024, which DraftKings said was for performance reasons.
Sports Betting Models Expanded
Eight former employees told the Times that DraftKings built similar targeting tools for sports betting promotions. Six said this work has continued and been refined into this year.
Two analysts said they asked for safeguards to stop the models from flagging vulnerable gamblers as targets. They were told that issue would be handled by a different part of the company.
At the same time, DraftKings was developing a separate tool meant to catch problem gambling early. A data scientist began building a risk-score model in mid-2024 for the company’s responsible gaming division.
Safety Model Was Shelved
That project aimed to flag harmful betting behavior days or weeks in advance. It was shut down in early 2025 after the employee leading it left the company.
Two planned meetings to present a successor model to company leaders were canceled or shelved, former employees said. Chief Responsible Gaming Officer Lori Kalani told the Times the decision was made because the technology was not evidence-based.
DraftKings said in a statement it rejects any suggestion that its marketing is unfair or improperly targets customers. The company said promotions go to customers who show steady, engaged use of the platform, not to those based on losses.
DraftKings added it could not fully respond to the Times’ findings because it had not verified the internal documents and data cited in the report. Rival companies FanDuel and Fanatics use outside risk-scoring services, but DraftKings does not, according to the report.
Citizens Bank data cited by the Times shows DraftKings had about 8.7 billion dollars in gross sports and casino revenue last year. Around 3 billion dollars of that went back to customers as promotions.
DraftKings said it now has 11 million customers, up from 5 million in 2022. Days before the Times report ran, the company announced new responsible gaming measures, including cool-off periods of up to 364 days.
CEO Jason Robins told Front Office Sports shortly before the report published that the business is doing well.
