DraftKings Faces Proposed Class-Action Lawsuit Over Alleged AI Gambling Promotions

Key Highlights

A West Virginia sports bettor is suing DraftKings after a New York Times investigation revealed its AI usage to target customers more likely to respond to promotions.

Lawsuit Alleges AI Targeted Certain Gamblers

West Virginia gambler Daniel Vest filed a class-action lawsuit against the Boston-based sportsbook and casino operator in Massachusetts federal court on Sept. 30. The lawsuit claims that DraftKings used artificial intelligence to identify customers who could be persuaded to keep gambling through targeted promotions. It also alleges customers labeled “elastic” were allegedly sent more emails, texts, app notifications, and online casino bonus offers designed to encourage additional wagering.

The complaint follows a New York Times report that said DraftKings spent years analyzing customer behavior, including whether gamblers might stop betting and how likely they were to respond to promotions. In the report, a former DraftKings employee discussed creating a learning model that used dozens of data points, such as betting frequency and past losses to direct promotional incentives toward customers expected to be most profitable for the company.

Vest claims customers weren’t told how the AI model was being used. His lawsuit argues that the alleged targeting was unfair and deceptive, and that DraftKings violated contractual duties and Massachusetts law. The complaint also challenges the company’s public commitment to responsible gambling by alleging the technology was used to increase betting among more vulnerable users.

DraftKings Disputes the Claims

Vest says he has wagered thousands of dollars on DraftKings each year for several years and received a large volume of promotional messages. According to the complaint, he received at least about 70 messages during the 30-day period ending Sept. 25. By filing his case as a class-action lawsuit, Vest is hopeful DraftKings will have to pay damages to affected customers for what the suit claims are “predatory” practices.

DraftKings rejects the allegations. In a statement, a company spokesperson said DraftKings does not use AI to target customers based on losses or indicators of potential problem gambling. The company said it plans to vigorously defend itself against lawsuits tied to the matter.

Sports law professor Michael McCann of the University of New Hampshire said the case could face legal hurdles. He noted that private companies generally have the ability to use available technology, suggesting that the use of AI by itself may not be enough to create legal liability.

Regulators Also Examine AI Use in Gambling

The allegations are also drawing attention from Massachusetts regulators. At a recent Massachusetts Gaming Commission meeting, Chairman Jordan Maynard directed staff to investigate how betting platforms use artificial intelligence. “I think that this is a place where legislators and regulators really need to step in and make sure the tools are being used for good,” added Marlene Warner, executive director of the Massachusetts Council on Gaming and Health.

The case could add pressure on the gambling industry to explain how automated systems influence promotions, customer engagement, and responsible gaming practices. On Oct. 1, a spokesperson for Maine’s Gambling Control Unit said that the agency is monitoring the issue of AI use by sports betting apps. Maryland Governor Wes Moore also discussed introducing a law that would ban betting apps from using “algorithmic and other means” to target users who display signs of problem gambling.

For now, the allegations remain unproven, and the dispute will center on what DraftKings’ technology actually did, how customers were selected, and whether those practices violated the law.