DraftKings faces scrutiny over AI-driven promotional targeting
A New York Times investigation says DraftKings developed a machine learning model to estimate which customers were most likely to continue gambling and lose money.
U.S.- DraftKings is facing controversy in the US after reports allege that it developed a machine learning system to identify customers who were more likely to generate more gambling losses after receiving promotional offers. According to an investigation by The New York Times, the model was developed from customer betting data in 2023 and reportedly assessed factors including betting frequency, account balance and historical losses.
The New York Times said customers were assigned scores estimating how much additional money they could generate through promotions. Jayden Butts, a former DraftKings data analyst who worked on testing the model, reportedly said the company wanted to direct free bets and bonuses towards customers expected to gamble and lose more.
The investigation was based on interviews with more than 40 former DraftKings employees, as well as internal documents, Slack messages and betting data from tests involving customers. The company has rejected that characterisation, saying its promotions are “directed towards customers who demonstrate sustained, engaged use of our platform, not toward customers based on their losses.”
The company’s Chief Responsible Gaming Officer, Lori Kalani, said DraftKings also considered technology to identify customers at risk of developing gambling problems, but abandoned those projects because it determined there was insufficient evidence that it was effective.
DraftKings has acknowledged using AI to personalise promotional spending and said data analytics increased margins on promotion-driven sports wagers by 13 per cent last year.
