The Massachusetts Gaming Commission (MGC) announced Thursday it will evaluate sportsbooks’ use of artificial intelligence following a report on DraftKings' AI practices.
Key Takeaways
- The Massachusetts Gaming Commission will examine AI use by DraftKings and other licensed sportsbooks.
- The review follows a New York Times investigation into DraftKings’ use of AI to target customers with promotions.
- The MGC formed an AI task force after a 2025 study found a regulatory “governance gap.”
A Saturday report from The New York Times alleged DraftKings directed employees to develop a machine learning model to identify customers most likely to respond to promotions and then lose money.
The New York Times' investigation was based on interviews with more than 40 former DraftKings employees, internal company communications and customers’ betting records.
The MGC has not determined that Boston-based DraftKings committed any wrongdoing. However, chairman Jordan Maynard announced the commission will seek to “understand the specifics” of the situation.
“The commission is aware of a report from The New York Times regarding the use of AI and machine learning by an operator,” he said. “These AI technologies are evolving rapidly across our society and we share the concerns over their application.”
MGC executive director Dean Serpa and staff will speak with DraftKings to understand the company’s use of AI and machine learning, including its promotional practices.
DraftKings reportedly used an “elasticity” metric to estimate how much more a gambler might wager after receiving a promotional offer.
“Any further action or policy-making can then be determined by the Commission when or if appropriate,” Maynard said.
Enjoying Covers content? Add us as a preferred source on your Google account
AI and gambling risks
AI has had a growing impact across industries, including Massachusetts sports betting.
As the technology continues to develop, Maynard said Maynard said the MGC has been monitoring its use in gambling. It commissioned a first-of-its-kind study through the University of Nevada Las Vegas’ International Gaming Institute, examining AI's use in promotions, player acquisition, responsible gaming tools, and player health.
The AI and Player Risk Identification and Response study was released last November. It recommended the creation of the AI task force that Serpa now leads and said there was a “governance gap” between technological advancements and existing company practices and regulatory guidelines.
The MGC formed the task force shortly after the findings were published. That group will be used to evaluate DraftKings’ operations.
“We need to find out the facts on the ground, with no disrespect to The New York Times, but also recognize that this is a very important issue with gaming and gaming regulation,” MGC commissioner Paul Brodeur said. “This is something that is true across any retail experience, anything that is customer-facing.
“It has the same challenges in determining the potential for AI to potentially exploit customers. These are great steps.”
What’s next?
The MGC said it would look into how all of its licensed sports betting operators were using AI - not just DraftKings.
Sportsbook promotions can be offered to new and returning customers. Promotions can vary based on a customer’s betting activity, loyalty, account history, and previous promo usage.
The MGC could consider additional guidelines or regulatory measures depending on the findings of its review.
