Massachusetts probes DraftKings after AI targeting report
The Massachusetts Gaming Commission said Friday it would examine how DraftKings and other betting companies licensed in the state used artificial intelligence, following a New York Times investigation into the company’s use of machine learning to target losing gamblers with promotional offers.
Jordan Maynard, chair of the Massachusetts Gaming Commission, said during a public meeting that he had directed commission staff to engage with DraftKings about the findings and to learn more about how all licensed betting companies in the state were deploying AI. “These A.I. technologies are evolving rapidly across our society, and we share the concern over their application,” Maynard said. The commission has not determined that DraftKings committed any wrongdoing.
The New York Times reported that DraftKings deployed machine learning to sift through customers’ wagering histories and pinpoint those who were most likely to keep betting and losing money once they received promotional offers.
The Times said its reporting drew on conversations with more than 40 people who had previously worked at DraftKings, along with internal company documents and records of customers’ betting activity. Half a dozen former employees involved in developing those systems said that they feared the technology could hurt people who were already wrestling with addiction. The company additionally shelved work on applying comparable technology to flag gamblers whose betting patterns suggested they might need help.
DraftKings said in a statement that it “works diligently to comply with all Massachusetts sports betting regulations and vehemently denies the suggestion that we do anything to make our offerings addictive.” The company added that it “does not use A.I. to target anyone based on losses and does not market to customers based on indicators of potential problem gaming.”
Under Massachusetts rules, operators are barred from drawing on customer data to deliver promotions via any automated system AI included — if that system is known or reasonably expected to heighten a gambling platform’s addictive qualities. The state further requires licensed operators to submit reports to the gaming commission no fewer than twice annually detailing how they monitor customer behaviour to support responsible gambling and limit the risk of addictive conduct.
MGC executive director Dean Serpa, along with other staff members, will meet with DraftKings to review the company’s use of AI and machine learning, including how it structures promotional activity. Commissioner Paul Brodeur described the Times’s findings as “troubling” and said the commission needed to determine the facts. Maynard said the results of the inquiry would inform whether any further action or policy-making was needed.