Online gambling companies, including DraftKings, are facing increased scrutiny from federal lawmakers and state regulators in the United States over their use of artificial intelligence (A.I.) and behavioral data to target repeat customers, particularly those experiencing losses. Recent inquiries and regulatory actions highlight growing concerns about whether such practices exploit problem gamblers.
In New York, officials from the attorney general’s office have contacted former DraftKings employees as part of a confidential investigation into the company’s data practices, according to three former employees who spoke anonymously. The state’s gaming commission has also proposed strict regulations that would limit how gambling operators use automated systems to send personalized promotions or suggest bets based on customers’ betting histories or losses. The proposed rules, subject to a 60-day public comment period, seek to restrict companies from leveraging A.I. tools in ways that could encourage continued gambling.
DraftKings has denied targeting customers based on losses or indicators of problem gambling. A company spokesperson stated that it does not use artificial intelligence for such purposes and emphasized ongoing communication with regulators as a normal part of business operations. DraftKings has also expressed concerns that overly broad restrictions could hinder legitimate uses of A.I. that might improve customer experiences.
Similar scrutiny is underway in Louisiana, where the state’s Gaming Control Board voted this month to delay DraftKings’ routine five-year license renewal, instead granting a conditional four-month extension. The board requested additional formal responses from the company regarding its use of A.I. and compliance matters. A DraftKings representative described the delay as a common administrative process allowing more time to complete the renewal application.
In Congress, Democratic Senator Richard Blumenthal of Connecticut, along with Representatives Paul Tonko of New York and Valerie Fousse of North Carolina, sent letters last week to several major online gambling operators—including DraftKings, FanDuel, BetMGM, Caesars, Fanatics, Kalshi, and Polymarket—seeking details about their “V.I.P.” programs and the deployment of A.I. in customer targeting. The lawmakers cited investigative reporting that alleged DraftKings used machine learning—an A.I. technique analyzing customer data—to identify and promote to users likely to keep gambling despite losses. They demanded responses by Nov. 5.
Senator Blumenthal characterized sportsbooks as intensifying gambling addiction by using A.I. to maintain customer engagement. The inquiry follows earlier investigations by regulators in Massachusetts and Michigan prompted by similar concerns.
New York’s attorney general’s office, which includes bureaus experienced in scrutinizing addictive algorithms in social media, declined to comment on the ongoing investigations.
These developments come amid a broader debate about how emerging technologies in online gambling can both enhance customer engagement and potentially exploit vulnerable individuals. Regulators and lawmakers are increasingly focused on balancing technological innovation with responsible gaming measures to prevent harm.