{"id":78494,"date":"2026-09-22T06:49:51","date_gmt":"2026-09-22T06:49:51","guid":{"rendered":"https:\/\/crowdfundjunction.com\/blog\/draftkings-shelved-a-problem-gambling-ai-while-targeting-likely-losers\/"},"modified":"2026-09-22T06:49:51","modified_gmt":"2026-09-22T06:49:51","slug":"draftkings-shelved-a-problem-gambling-ai-while-targeting-likely-losers","status":"publish","type":"post","link":"https:\/\/crowdfundjunction.com\/blog\/draftkings-shelved-a-problem-gambling-ai-while-targeting-likely-losers\/","title":{"rendered":"Draftkings Shelved a Problem-Gambling AI While Targeting Likely Losers"},"content":{"rendered":"<p><b>(Originally posted on : Bitcoin News )<\/b><br \/>\n<\/p>\n<div>\n<div class=\"@container mb-[25px] rounded-sm overflow-clip py-0.5 pr-0.5 pl-2.5 bg-success-100\">\n<div class=\"flex flex-col gap-m overflow-clip rounded-[6px] !bg-success-10 p-3 @[420px]:p-m\">\n<h2 class=\"m-0 flex items-center gap-s text-[19px] !text-[#1c1c1c] md:text-[20px]\"><svg xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"16\" height=\"10\" viewbox=\"0 0 16 10\" fill=\"none\" class=\"shrink-0 text-success-100\" aria-hidden=\"true\"><path d=\"M1 1.5h14\" stroke=\"currentColor\" stroke-width=\"2.5\" stroke-linecap=\"round\"\/><path d=\"M1 8.5h10\" stroke=\"currentColor\" stroke-width=\"2.5\" stroke-linecap=\"round\"\/><\/svg><span>Key Takeaways<\/span><\/h2>\n<ul class=\"m-0 flex list-none flex-col gap-m pl-0\">\n<li class=\"m-0 flex items-start gap-s !text-[#434248]\"><span class=\"mt-2 size-2 shrink-0 rounded-full bg-success-100\" aria-hidden=\"true\"\/><span class=\"text-body\">The NYT reports Draftkings used AI to aim promotions at gamblers likeliest to lose.<\/span><\/li>\n<li class=\"m-0 flex items-start gap-s !text-[#434248]\"><span class=\"mt-2 size-2 shrink-0 rounded-full bg-success-100\" aria-hidden=\"true\"\/><span class=\"text-body\">Former staff say models built to flag problem gamblers were shut down or shelved.<\/span><\/li>\n<li class=\"m-0 flex items-start gap-s !text-[#434248]\"><span class=\"mt-2 size-2 shrink-0 rounded-full bg-success-100\" aria-hidden=\"true\"\/><span class=\"text-body\">Draftkings rejects any implication its marketing unfairly targets customers.<\/span><\/li>\n<\/ul>\n<\/div>\n<\/div>\n<h2>\u2018The Best Investment Would Be a Problem Gambler\u2019<\/h2>\n<p><a href=\"https:\/\/www.nytimes.com\/2026\/09\/19\/business\/draftkings-ai.html\" target=\"_blank\" rel=\"noopener noreferrer\">The Times<\/a> based its reporting on interviews with more than 40 former Draftkings employees, along with internal research memos, presentations, Slack messages and betting records from experiments the company ran on customers. The report expounds on two separate AI-assisted system buildouts, and the drastically different directions their development took over time.<\/p>\n<p>A model built in 2023 for the online casino division reportedly gave each player an \u201celasticity\u201d score: the higher the score, the more money that gambler was likely to lose for each promotion offered. In mid-2024, a data scientist began developing a predictive model for the company\u2019s responsible gaming division\u2014about 50 people in a workforce of 5,000\u2014to assign customers a risk score that could predict harmful behavior days or weeks ahead. That project that was shut down in early 2025.<\/p>\n<p>Jayden Butts, then a data analyst at the company, is one of the Times\u2019 named sources for this story. Per his recollection, the company tested the former model on about 5,000 casino players in September 2023 and later on a larger group. Butts told reporters he had assumed the goal was to stop wasting promotions on unprofitable customers, but that supervisors said the company wanted to \u201credeploy\u201d its promotional budget, which he took to mean directing more of it at the biggest losers.<\/p>\n<p>\u201cWe are looking for traits and features that we can target that indicate a good investment,\u201d he said, characterizing his own work. Following this to its financial conclusion, he told the Times that \u201cthe best investment would be a problem gambler.\u201d<\/p>\n<p>Draftkings fired Butts in late 2024, for performance reasons, per his own explanation. The company disputed his account of his firing without elaborating, and said his test \u201cappears preliminary and inconclusive.\u201d An internal memo from a year prior found that slots revenue was \u201cmore elastic\u201d than other casino games, meaning promotions were especially effective at driving play on them, and the Times\u2019 own analysis of early-2024 casino data found that high-elasticity players bet more on slots on average.<\/p>\n<p>Eight former employees said Draftkings built similar models for sports betting promotions, and six said the targeting work continued and has been refined as recently as this year. Two analysts told the Times they asked for safeguards against the models flagging vulnerable gamblers as targets, and were told that would be handled by another part of the company.<\/p>\n<p>That safeguarding work would eventually be steered away from working with the same sort of AI-powered tools, per the report. Data Scientist Nestor Hernandez told the Times about the responsible gaming division\u2019s work on the predictive system in 2024. He left the company in November, and the project was shut down a few months later. In early 2025, a team preparing to present a successor model to officials, including Chief Responsible Gaming Officer Lori Kalani, had the meeting canceled on the day. Two other attempts were shelved, according to two former employees.<\/p>\n<h2>Draftkings Pushes Back on Accusations<\/h2>\n<p>Kalani told the Times that company leaders made a \u201ccollective decision\u201d not to use predictive technology for problem gambling because \u201cit wasn\u2019t evidence-based.\u201d The promotional models were reportedly tested on live customers regardless. Draftkings says it monitors more than two dozen behavioral indicators nationwide, following New Jersey guidance, but declined to disclose the thresholds to avoid customers gaming them.<\/p>\n<p>Rivals Fanduel and Fanatics have signed up for third-party risk-scoring tools, but Draftkings does not use them, the Times reported. Days before the investigation ran in the paper, Draftkings <a href=\"https:\/\/www.businesswire.com\/news\/home\/20260914279142\/en\/DraftKings-Enhances-Responsible-Engagement-Efforts-With-New-Customer-Initiatives-Tools-and-Education\" target=\"_blank\" rel=\"noopener noreferrer\">announced a responsible gaming push<\/a> that included custom cool-off periods of up to 364 days and a gamified Mindway AI experience.<\/p>\n<p>Citizens Bank research cited by the Times puts Draftkings\u2019 gross sports and casino revenue last year at about $8.7 billion, with around $3 billion given back in promotions. A Draftkings executive recently told investors that data science lifted margins on promotion-driven sports bets by 13% in 2025, and that the company uses AI to personalize hundreds of millions of promotional dollars. Draftkings says it has 11 million customers, up from five million in 2022.<\/p>\n<p>Asked by the Times whether promotions contribute to problem gambling, Kalani called them \u201ca marketing tool that every company out there uses,\u201d compared Draftkings to Amazon, and said: \u201cShopping can be problematic for people.\u201d Research by Bank of America found online bettors <a href=\"https:\/\/news.bitcoin.com\/igaming\/gen-z-is-twice-as-likely-to-call-sports-betting-an-investment-bofa-finds\/\">typically recover less than 75 cents of every dollar<\/a> they send to betting platforms.<\/p>\n<p>In a statement, Draftkings said it \u201crejects any implication that its marketing practices are unfair or improperly targets customers,\u201d and that promotions are \u201cdirected toward customers who demonstrate sustained, engaged use of our platform, not toward customers based on their losses.\u201d It said it could not respond definitively to the documents or the Times\u2019 analysis because it had not \u201cseen or verified\u201d them.<\/p>\n<p>The report lands days after CEO Jason Robins told Front Office Sports that <a href=\"https:\/\/news.bitcoin.com\/igaming\/draftkings-ceo-says-prediction-market-wins-are-sinking-his-own-stock\/\">the business is \u201cdoing great.\u201d<\/a> Draftkings and rival Fanduel have both boasted publicly about using customer data for promotions, the Times noted, and vendors sell similar tooling across the industry: <a href=\"https:\/\/news.bitcoin.com\/optimove-acquires-smartico-in-igaming-crm-consolidation-play\/\">Optimove\u2019s April acquisition of Smartico<\/a> brought AI-powered player segmentation together with a bonus engine and lifetime-value prediction.<\/p>\n<\/p><\/div>\n<p><a href=\"https:\/\/news.bitcoin.com\/igaming\/draftkings-shelved-problem-gambling-ai-targeting-likely-losers\/\">Source link <\/a><br \/>\n<br \/><\/p>\n","protected":false},"excerpt":{"rendered":"<p>(Originally posted on : Bitcoin News ) Key Takeaways The NYT reports Draftkings used AI to aim promotions at gamblers likeliest to lose. Former staff say models built to flag problem gamblers were shut down or shelved. Draftkings rejects any implication its marketing unfairly targets customers. \u2018The Best Investment Would Be a Problem Gambler\u2019 The [&hellip;]<\/p>\n","protected":false},"author":3947362403,"featured_media":78495,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"om_disable_all_campaigns":false,"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0},"categories":[32],"tags":[],"_links":{"self":[{"href":"https:\/\/crowdfundjunction.com\/blog\/wp-json\/wp\/v2\/posts\/78494"}],"collection":[{"href":"https:\/\/crowdfundjunction.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/crowdfundjunction.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/crowdfundjunction.com\/blog\/wp-json\/wp\/v2\/users\/3947362403"}],"replies":[{"embeddable":true,"href":"https:\/\/crowdfundjunction.com\/blog\/wp-json\/wp\/v2\/comments?post=78494"}],"version-history":[{"count":0,"href":"https:\/\/crowdfundjunction.com\/blog\/wp-json\/wp\/v2\/posts\/78494\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/crowdfundjunction.com\/blog\/wp-json\/wp\/v2\/media\/78495"}],"wp:attachment":[{"href":"https:\/\/crowdfundjunction.com\/blog\/wp-json\/wp\/v2\/media?parent=78494"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/crowdfundjunction.com\/blog\/wp-json\/wp\/v2\/categories?post=78494"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/crowdfundjunction.com\/blog\/wp-json\/wp\/v2\/tags?post=78494"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}