DraftKings, Other Sports Betting Apps Use AI to Target Vulnerable Users, Report Claims

Concerns about the financial toll of online sports gambling are rising in Florida, mirroring national trends. A recent report indicates that sports betting platforms, including DraftKings, employ sophisticated machine learning to identify and target users most likely to lose money, raising questions about ethical marketing practices in the burgeoning industry.

DraftKings reportedly uses an AI model to score users based on their responsiveness to incentives. This model aims to maximize revenue by focusing on what it identifies as “elastic” users, those who are more likely to spend heavily on the platform. This practice has drawn criticism from legal professionals and former employees.

Attorney Jennifer Hoekstra has filed lawsuits against both DraftKings and FanDuel, alleging that these gambling applications are specifically designed to foster addiction among their users. While DraftKings denies engaging in unfair marketing practices, the lawsuits highlight a growing legal challenge to the industry's operational methods.

Former DraftKings employees have stated that the company did make efforts to predict and intervene in potential crises for users exhibiting risky behaviors. Despite these claims, studies show a clear correlation between the legalization of online sports betting and an increase in bankruptcies and credit card delinquencies in those states.