DraftKings hit with proposed class action over alleged AI-driven promotion targeting
A West Virginia gambler has filed a proposed nationwide class action in Boston federal court accusing DraftKings of using a machine learning model to target gamblers likely to lose more. DraftKings denies the claims.
DraftKings faces a proposed class action lawsuit alleging it used artificial intelligence to identify vulnerable gamblers and target them with promotions designed to make them bet — and lose — more.
West Virginia gambler Daniel Vest filed the suit on Wednesday in Massachusetts Federal Court in Boston. He is seeking to represent a nationwide class of users who were allegedly flagged by a machine learning model as likely to respond to incentives by gambling more, according to CDC Gaming.
The complaint accuses the Boston-based sportsbook of building the model in 2023 from customer betting records, labelling the customers it flagged as “elastic”. It says the company “weaponised AI” to “understand and exploit users’ vulnerabilities to financially benefit the company”, aistockwire reports. The suit leans heavily on a New York Times investigation published on 19 September, which reported that DraftKings had spent years analysing gamblers’ behaviour, including their likelihood of stopping and their susceptibility to promotional offers.
Vest, who the complaint says has wagered thousands of dollars a year with DraftKings for several years, received about 70 promotional emails, texts and app notifications in the roughly 30 days before 25 September. The complaint currently alleges breach of contract, breach of implied contract, and “money had and received”, built around the company’s privacy notices. His lawyers, from Block & Leviton and Lynch Carpenter, sent a demand letter under Massachusetts consumer protection law on 30 September and plan to add that claim in about 30 days if there is no settlement.
DraftKings rejects the central allegation. “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. We intend to vigorously defend any potential lawsuits on the matter,” a spokesperson told The Boston Globe.
The Massachusetts Gaming Commission has said it will examine the allegations against DraftKings and other licensed operators. DraftKings shares closed at $19.00 on 30 September, down 12.6% from $21.75 on 18 September, the last trading day before the Times report.
Read next: the NYT investigation that started it all on our AI ethics coverage — more on the DraftKings saga via our technology hub at /topics/draftkings/
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