TLDR
- A West Virginia bettor filed a proposed federal class action against DraftKings on Sept. 30 in Massachusetts.
- The lawsuit claims DraftKings used AI to find gamblers most likely to bet and lose more after promotions.
- The plaintiff says he received at least 70 promotional messages in about 30 days.
- DraftKings denies using AI to target customers based on losses or problem gambling signs.
- The Massachusetts Gaming Commission is separately reviewing AI use by sportsbooks.
DraftKings is facing a proposed federal class-action lawsuit. It accuses the sports betting company of using artificial intelligence to target gamblers most likely to keep betting and losing money.
West Virginia resident Daniel Vest filed the complaint on Sept. 30 in federal court in Massachusetts. DraftKings is based in Boston.
The lawsuit claims the company “weaponized” AI by using customers’ personal betting data to decide who should receive promotions. DraftKings denies the allegations.
What the Lawsuit Claims
Vest says he has gambled thousands of dollars each year with DraftKings for several years. He claims he received at least 70 emails, texts, push notifications, and other messages from the company in about 30 days ending Sept. 25.
He wants to represent a nationwide group of DraftKings customers. That group would include people the company’s AI systems allegedly identified as especially responsive to gambling incentives.
The complaint relies on a September investigation by The New York Times. The newspaper reported that DraftKings built a machine-learning model to predict which customers would gamble, and lose, more after receiving promotions.
According to the Times, the system gave customers an internal “elasticity” score. Customers labeled “inelastic” were unlikely to bet much more because of promotions, so they received fewer incentives.
Customers labeled “elastic” were seen as better targets for promotions. A former employee told the Times the model checked whether a customer would give DraftKings more money than the company spent on incentives. If so, the employee said, the approach was to “open the floodgates.”
Vest’s lawyers say this conflicts with DraftKings’ own privacy notices. Those notices say personal information may be used to spot possible problem gambling and to offer responsible gambling resources.
The lawsuit claims the company instead used that data to find customers likely to lose more or leave the platform. It says DraftKings then encouraged those customers to keep gambling.
The complaint also points to Massachusetts rules. The state bars sportsbooks from using customer data to promote wagers through AI or machine-learning systems that operators know, or should expect, could make their platforms more addictive.
DraftKings Responds as Regulators Review AI Use
DraftKings rejected the claims in a statement to Boston.com. “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 said.
The spokesperson added that the company plans to “vigorously defend” itself in court.
Vest is asking for damages, refunds, and the return of money allegedly earned through the model. He also wants a court order stopping DraftKings from using the model to encourage customers to keep gambling.
Separately, the Massachusetts Gaming Commission is reviewing how DraftKings and other licensed sportsbooks use AI and machine learning. The review began after the Times investigation was published.
The commission has not found that DraftKings did anything wrong. The case is still in its early stages, and no court has ruled on the claims.
