DraftKings Used AI to Identify and Target High-Loss Gamblers with Promotions

Investigators uncovered that DraftKings created a machine-learning tool in 2023 to evaluate online casino players on how much they were expected to lose, using metrics such as play frequency, daily balances and loss-to-wager ratios. The resulting “elasticity” score guided the company’s marketing, with higher-scoring gamblers receiving more free bets and bonuses to encourage continued wagering. Former data analyst Jayden Butts, who tested the system on thousands of accounts, said the model appeared to prioritize problem gamblers as the best investment.

A separate effort by data scientist Nestor Hernandez to develop a risk-alert model in 2024 was reportedly shelved, and Chief Responsible Gaming Officer Lori Kalani said leadership deemed predictive tools insufficiently evidence-based. DraftKings rejected the allegations, asserting its promotions are aimed at users with sustained, engaged activity and labeling the test results as preliminary. In response, Senator Richard Blumenthal and Representative Paul Tonko introduced the SAFE Bet Act to prohibit sportsbooks from using AI to track betting habits for personalized offers, while DraftKings and rival FanDuel increased federal lobbying spending in 2025.