A West Virginia customer has filed a proposed federal class action accusing DraftKings of using artificial intelligence to identify gamblers most likely to lose money and then directing a stream of tailored promotions at them.
Daniel Vest filed the complaint against DraftKings Inc. in the U.S. District Court for the District of Massachusetts on Sept. 30. He alleges that the company used AI and machine-learning tools to encourage larger and more frequent wagers from customers displaying gambling-addiction traits.
Vest says he received roughly 70 emails, text messages, in-app notifications and other promotional messages in the 30 days before Sept. 25, and lost thousands of dollars through DraftKings. The proposed class would cover consumers who allegedly received targeted emails, push notifications and other tailored promotions.
The complaint alleges that DraftKings developed a machine-learning model in 2023 using customers’ betting records to predict who would respond to an offer by gambling, and losing, more. Customers were allegedly scored by their expected loss per promotion, with higher-scoring users targeted with further incentives.
It says the company drew on data including betting frequency, daily account balances, losses relative to bets and the likelihood of a customer stopping gambling. People deemed “elastic” were allegedly sent additional messages and promotions designed to keep them betting, while users classified as “inelastic” received fewer incentives.
Vest contends that these practices were not disclosed, despite DraftKings’ privacy notice stating that it may use customer information to assess responsible play and contact potentially problematic users with support resources. The suit alleges breach of contract, breach of implied contract, and money had and received. It seeks compensatory damages, refunds for the class and an injunction barring the alleged use of AI to encourage further gambling.
DraftKings denied the central allegation. Park Winslow, a company spokesperson, told WBUR that DraftKings does not use AI to target customers based on losses or indicators of potential problem gambling, and said it intended to vigorously defend potential litigation.
Massachusetts Attorney General Andrea Campbell’s office said the allegations raised serious concerns about technology being used to target or exploit people vulnerable to problem gambling. State Auditor Diana DiZoglio said the accusations would be unacceptable if substantiated.
As we reported in September, the Massachusetts Gaming Commission had already opened an inquiry into AI use by licensed sportsbooks, beginning with DraftKings. Commission Chair Jordan Maynard said the regulator would examine how DraftKings and other operators use the technology, while the commission directed Executive Director Dean Serpa to meet with DraftKings and investigate AI practices across betting platforms.
Boston.com reported that Massachusetts law requires betting companies to disclose their uses of AI to the gaming commission and prohibits its use to make a platform more addictive. Operators must also disclose AI uses intended to reduce risky gambling behaviour.
The case arrives amid wider concern about the targeting and volume of gambling advertising. A 2024 Massachusetts Gaming Commission report found national television advertising by sportsbook operators rose from $21.4 million in 2019 to $314.6 million in 2022. The report said the rapid shift toward digital, highly targeted gambling advertising posed particular risks for vulnerable groups and recommended restrictions on campaigns directed at them, limits on advertising intensity and frequency, and restrictions on communications about inducements, bonuses and credits.
