A federal lawsuit filed Wednesday in the U.S. District Court in Boston accuses online gambling company DraftKings of using artificial intelligence to target customers in ways that encourage gambling addiction and increase company profits. The proposed class action, brought by plaintiff Daniel Vest of West Virginia, alleges that DraftKings employed AI models to identify users more likely to engage in repeated gambling losses and subsequently directed targeted promotions to exploit those vulnerabilities.
Vest, who claims to have lost thousands of dollars gambling through the platform, stated that he received around 70 promotional communications in the month leading up to September 26, including emails, texts, and notifications designed to persuade him to continue betting. The lawsuit contends that DraftKings analyzed various data points such as individual spending habits and loss patterns without disclosing the use of AI or machine learning technologies, thereby violating Massachusetts state law.
“DK has weaponized AI to do just that – understand and exploit users’ vulnerabilities to financially benefit the company,” the complaint asserts. It further alleges that DraftKings' failure to inform users about these practices compounds the harm inflicted on customers struggling with gambling addiction.
In response, a DraftKings spokesperson denied the claims, stating, “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.” The company also emphasized its intention to vigorously defend against the lawsuit.
The legal action follows a recent investigation by a major news outlet that highlighted the use of AI in online gambling to promote addictive behaviors. The complaint incorporates significant material from that report. Meanwhile, the Massachusetts Gaming Commission, which oversees gaming operations within the state, announced that it would review the allegations and assess whether DraftKings and other licensed operators have engaged in similar conduct.
The case raises broader questions about the ethical use of AI technologies in the gambling industry and the responsibilities of operators to protect consumers from potentially harmful practices. As online gambling continues to expand, regulators and industry participants face increased scrutiny over technologies that can both personalize experiences and potentially exploit vulnerable individuals.