Massachusetts regulators want to know how licensed sportsbooks use artificial intelligence and machine learning to market to Bay State customers.
- The MGC sent operators a list of questions about their use of AI and machine learning on Oct. 9.
- The commission wants a voluntary response by Nov. 3.
- DraftKings is already under review for AI use following last month’s report.
Massachusetts Gaming Commission executive director Dean Serpa sent a letter to the state’s sportsbooks, dated Oct. 9, with a list of questions concerning the use of artificial intelligence. For now, regulators are asking for voluntary answers that will be kept confidential and applied to policies “related to the use of AI,” Serpa wrote in the inquiry.
MGC chair Jordan Maynard directed the commission to contact sportsbooks in September. Operators have until Nov. 3 to respond in writing.
“Please identify the position or individual within the Operator’s organization who has ultimate responsibility for determining whether AI or machine learning is used and, if so, the purposes and functions for which it is used,” Serpa directed to operators in the letter.
Making a list
This is part of a recent MGC directive aimed at knowing more about how the seven online Massachusetts sports betting operators and three retail sportsbooks are targeting consumers with advertising and promotions with AI, including if it's used to determine marketing strategies that could increase wagering and contribute to problem gambling.
Among the list of questions, regulators are asking about machine-learning applications, human oversight, and how companies use algorithms, models, and customer data, including win-loss records and betting frequency.
The MGC also wants to know how automated or human-reviewed AI systems determine which customers receive marketing materials and promotions.
“Does the system determine the type of promotion offered to an individual patron? For example, can the system select among a bonus bet, odds boost, deposit match, free bet, parlay promotion, or other incentive based on an individual's prior behavior?” Serpa asked in the letter.
Massachusetts regulators are also examining DraftKings following a New York Times report alleging that the Boston-based sportsbook used AI to target customers likely to spend more.
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Just the beginning
Maynard said last month that the MGC was aware of the report, which kicked off the recent inquiry and could lead to new state gaming policies, depending on what the commission uncovers.
“These AI technologies are evolving rapidly across society, and we share the concerns of their application,” Maynard said.
Across the 39 legal U.S. sports betting states, regulators and lawmakers are beginning to ask serious questions about machine learning used in the industry. Last week, the New York State Gaming Commission unanimously advanced a revised proposal that would restrict sportsbooks' use of AI to personalize promotions and wagering recommendations. The proposal will receive further public comment and commission discussion.
