TLDR
- Louisiana regulators voted to delay a routine license renewal for DraftKings, partly to investigate its use of AI and customer data.
- September reporting found DraftKings used machine learning to find customers most likely to keep gambling and losing when sent promotions.
- New York attorney general lawyers reportedly contacted former DraftKings employees about the company’s data practices.
- The New York State Gaming Commission proposed sharp limits on how gambling operators can use AI.
- Three members of Congress sent letters to online gambling companies asking about VIP programs and AI use.
Louisiana gambling regulators have delayed a routine license renewal for DraftKings. The move is partly meant to give them time to look into how the company uses artificial intelligence and customer data.
The delay is one of several actions involving DraftKings in recent weeks. Federal lawmakers and officials in New York, Massachusetts and Michigan are also asking questions, according to a New York Times report published October 26.
The questions focus on how DraftKings and other online gambling companies use AI and behavioral data. Officials want to know how these tools were used to target repeat customers based on their losses.
What the September Reporting Found
The scrutiny follows reporting in September about DraftKings and its use of machine learning. That reporting found the company used the technology to analyze customer records.
The goal was to identify customers most likely to keep gambling and losing when sent promotions. Those customers could then be targeted with offers.
Regulators in Massachusetts and Michigan responded shortly after the reports came out. Both states announced they were looking into the issue.
New York and Congress Step In
New York officials have taken action on more than one front. Sources said consumer protection lawyers from the state attorney general’s office contacted former DraftKings employees.
The lawyers wanted to discuss the company’s data practices, according to those sources. The details of those conversations have not been made public.
At the same time, the New York State Gaming Commission has proposed sharp limits on how operators can deploy AI. The proposal covers gambling companies operating in the state.
In Washington, three members of Congress sent letters last week to online gambling companies. DraftKings was among the companies that received them.
The letters asked for details about the companies’ VIP programs. They also asked how the companies use AI.
VIP programs are offered to some frequent customers. They often include special promotions, bonuses and other perks.
In Louisiana, regulators voted to delay the DraftKings license renewal instead of approving it. The renewal is normally routine, but the delay gives regulators more time to investigate.
The reports did not include a response from DraftKings. The inquiries in Louisiana, New York, Massachusetts, Michigan and Congress are still ongoing, and no findings have been announced.
