DraftKings Sued Over AI Model That Targeted Losing Bettors

A proposed class action filed Wednesday in U.S. District Court in Boston accuses DraftKings of building artificial intelligence models that identify gamblers likely to lose money and then pushing promotions at them to keep them betting. The plaintiff, Daniel Vest of West Virginia, says he lost thousands of dollars on the platform and received at least 70 emails, texts, app notifications and other messages from the company between late August and Sept. 25, many of them offering incentives to place more wagers.

"DraftKings has weaponized AI to do just that — understand and exploit users' vulnerabilities to financially benefit the company," the complaint states. A DraftKings spokesperson rejected the characterization: "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."

The filing lands a week after the Massachusetts Gaming Commission said it would review the allegations raised in a September investigation by The New York Times, and days after DraftKings chief executive Jason Robins called that reporting "slanderous" in an interview with the outlet The Wrap.

What the complaint says the model did

According to the lawsuit, which quotes heavily from the Times investigation, DraftKings assigned customers scores derived from their betting histories, with higher scores indicating a player expected to generate more losses for every promotion offered. Former employees told the Times that one internal system flagged customers who appeared to be trying to quit the platform so the company could pull them back, and that another program increased promotions for players gambling "more aggressively than usual."

The complaint cites a company executive's statement to investors that data science and analytics improved margins on promotion-driven sports bets by 13 percent in 2025, and that DraftKings used AI to personalize hundreds of millions of dollars in promotional spending. It also cites Citizens Bank research showing the company took in roughly $8.7 billion in gross revenue from sports and casino gamblers that year while distributing about $3 billion in promotions.

The Times also reported, and the lawsuit repeats, that a separate machine-learning model designed to assign customers risk scores for problem gambling was sidelined. DraftKings told the Times that promotions were aimed at customers with sustained engagement, not at customers selected for their losses.

Vest is asking a federal judge to certify the case as a class action, award damages to affected customers, order the return of money he says the company obtained through the practices, and issue an injunction barring DraftKings from using AI models to target users with messages or offers that encourage more gambling. The case is at its earliest stage, and no ruling has been issued on the substance of the claims.

The Massachusetts rules at issue

The complaint argues the promotions violated state sports wagering regulations, which bar operators from using a customer's personal or confidential information to promote specific wagers or offers based on an AI or machine-learning system the operator knows or reasonably expects will make its platform more addictive. Massachusetts also requires gambling companies to disclose all use of AI and automated capabilities to the Gaming Commission and to report how they analyze customer data to mitigate addictive behavior.

The commission declined to comment on active litigation. "The New York Times does a very good job of reporting and checking their facts. But, as a government agency, we need to do some fact finding on the ground," spokesperson Thomas Mills said, adding that the review will "start with a conversation." DraftKings has held a full five-year Category 3 sports wagering license since July 25, 2025, and began accepting bets in the state in March 2023.

A widening legal front

The Boston case is not the first to test how far gambling companies can go in using customer data to drive engagement. A separate proposed class action filed in a federal court in Pennsylvania in April alleges that DraftKings targeted users with gambling addictions through its VIP program and misleading promotions. The company is also defending suits related to illegal gaming offerings and to products described as misleading and addictive.

Clinicians and public health researchers describe the AI allegations as a threshold question for a product that can be engineered to be more or less harmful. "Enticements and promotions have been going on since the dawn of regulated gambling," said Dr. Timothy Fong, a psychiatry professor and co-director of the Gambling Studies Program at the University of California, Los Angeles. But AI's capacity to predict and analyze user behavior raises what he called a darker possibility: "If they are scrubbing AI platforms to find the users who are clearly vulnerable, who are already addicted or going to become addicted ... that would be a tremendous violation of the spirit of business."

Mark Gottlieb, executive director of Northeastern University's Public Health Advocacy Institute, compared the mounting litigation to the state and federal policy changes that followed lawsuits against tobacco companies in the 1990s. "Their conduct is coming to light and the resulting wave of litigation will soon provide a level of transparency needed to make these products safer for the public," he said.

The institute is one of the organizations behind a national campaign launched in Washington on Sept. 23 that seeks federal minimum standards for sports betting advertising, affordability checks and automated promotions — the same practices at issue in the new suit. That effort, built around the SAFE Bet Act, is described in an earlier report on the campaign.

For the roughly 2 to 3 million Americans who meet the criteria for gambling disorder, the practical stakes extend past consumer protection into treatment capacity. Only a fraction of people with the condition ever reach care, and states have moved unevenly to fund it; Illinois became the first to fold gambling disorder into its substance use statute without requiring a co-occurring drug or alcohol diagnosis. The National Council on Problem Gambling estimates that about one in five compulsive gamblers has attempted suicide, a figure that has framed the treatment gap as a public health problem rather than a matter of personal discipline.