DraftKings Under Scrutiny for AI-Driven Customer Targeting

DraftKings is facing increasing regulatory and legislative pressure over how the online sports betting giant uses artificial intelligence to identify and market to customers, according to reporting by The New York Times. The scrutiny arrives as lawmakers at both the federal and state levels sharpen their focus on the broader online gambling industry's data practices.

Concerns center on whether AI-powered targeting tools are being used in ways that could exploit vulnerable individuals, including problem gamblers. Officials in Congress and across multiple states have been raising questions about the mechanics behind these systems and the degree to which companies like DraftKings rely on algorithmic tools to drive user engagement and spending.

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The online gambling sector has expanded rapidly since the Supreme Court opened the door to widespread sports betting in 2018, giving companies vast troves of behavioral data on their customers. Critics argue that sophisticated AI systems can use that data to pinpoint users most likely to spend heavily — or to relapse into problem gambling — and then serve them with precisely timed promotions.

The mounting pressure on DraftKings reflects a wider reckoning with how technology companies across industries deploy AI in consumer-facing contexts, particularly when the product itself carries inherent risk. Regulators have yet to establish uniform national standards governing the use of AI in gambling marketing, leaving a patchwork of state-level rules that the industry has navigated with varying degrees of transparency.

Continue reading at NYT > Business.