A proposed Massachusetts class action lawsuit against DraftKings alleges that the sports betting company used artificial intelligence to identify customers most likely to respond to gambling promotions, including people showing signs of problem gambling. Notably, none of these allegations have been proven in court, and the case remains in its early stages.
The Plaintiff Suffered Significant Financial Losses
West Virginia resident Daniel Vest filed the lawsuit in the US District Court in Boston, claiming that he lost thousands of dollars gambling with DraftKings over several years. According to a recent Boston Globe report, Vest claims that the company sent him at least 70 promotional emails, text messages, and other communications over a single month urging him to keep betting.
Vest aims to represent other DraftKings customers he claims the company’s artificial intelligence systems identified as likely to respond to incentives and promotions to keep gambling. The complaint also alleges that DraftKings violated Massachusetts law by failing to inform customers that it was using AI in this way. DraftKings has publicly denied these allegations.
“DraftKings does not use AI to target customers based on losses, nor do we use AI to target customers based on indicators of potential problem gaming.”
DraftKings statement
Massachusetts officials have taken note of the proposed lawsuit. Attorney General Andrea Campbell’s office noted that the allegations raise serious concerns about the use of technology to target consumers who might be vulnerable to problem gambling. State Auditor Diana DiZoglio also weighed in, adding that the accusations would be unacceptable if proven true.
This case stemmed from a New York Times investigation published last month that examined DraftKings’ use of machine learning and other similar technology. Former DraftKings employees told that paper about systems to identify losing gamblers who might respond positively to promotional offers. DraftKings also allegedly explored technology to identify customers prone to gambling problems but later abandoned these efforts
While DraftKings disputed the investigation’s findings, the report remains at the center of Vest’s claims. Many of his allegations rest on quotes from former employees about the company’s marketing practices. Meanwhile, DraftKings maintains that it does not use AI to target customers based on losses or signs of potential problem gambling.
This lawsuit is not the first time DraftKings was accused of targeting problem gamblers. In June, a Chicago-area customer sued the company for repeatedly offering him incentives despite signs of a gambling disorder. His attorneys claim the company deliberately targets high-value customers with personalized offerings to keep them active as their losses mount. That case remains ongoing.