The Louisiana Gaming Control Board (LGCB) has voted unanimously on Thursday to conditionally approve DraftKings for a four-month license extension. A final decision is expected on the day after a planned license hearing on February 18, 2027.
LGCB to Look into Certain Aspects of DraftKings Practices Before It Confirms License
The LGCB has deferred a final decision while it studies how sports betting companies are using artificial intelligence when it comes to their customer practices.
This is the latest ramification of a new report published in The New York Times, which interviewed former company employees, arguing that AI was used to stimulate customers more likely to bet more with promotions and bonus inducements, a practice internally coined as “elasticity.”
DraftKings’ current license expires on November 10, 2026, but the company will continue operating under the interim arrangement with no interruption in service. However, this is not the only reason why the company’s license approval has been put on hold.
The Louisiana State Police Gaming Enforcement Division has recently discovered information that certain shareholders, who hold 5% or more of the company, have not gone through the customary suitability report.
These shareholders need to be labeled institutional, argued assistant attorney general Dalancy Houston, but a final decision in the matter is still pending, hence the LGCB’s decision to defer a final ruling on DraftKings’ license.
“The investigation is incomplete at this time. The division also has some concerns about the recent allegations brought against DraftKings and therefore additional time is needed for the division to fully investigate those allegations,” Houston said.
Naturally, anything but a full license approval is highly unlikely in the case of DraftKings, one of two companies that de facto control the majority of the US sports betting market.
No Evidence of Wrongdoing, Just Obligatory Checks
DraftKings President of Operations and cofounder Paul Liberman appeared in front of the LGCB to discuss the aforementioned concerns. Liberman noted that DraftKings kept records of all customers, and that the company understood which gambler was “winning or losing.”
Liberman, however, flatly denied that AI was used in the way that was implied in the reporting, or that DraftKings would leverage the technology to harm consumers.
The LGCB concurred that there was no evidence that DraftKings was indeed breaching any licensing or moral obligation, but Chairman Chris Hebert noted that the board was nevertheless obligated to investigate the matter further.
“This proposal is not a determination that DraftKings has engaged in any wrongdoing. Rather, it is a measured regulatory response that allows us as a Board to fulfill our oversight responsibility,” Hebert noted.