DraftKings used AI to target losing bettors: ‘The best investment would be a problem gambler’

Former DraftKings employees say the company sent promotional offers to the very gamblers who were most likely to rack up losses, according to a report.

The sports gambling giant used AI and data science to help determine which customers should receive promotional offers, the New York Times reported, citing whistleblowers.

DraftKings internally used a measure it called “elasticity,” to estimate how much more a gambler might wager if offered the right promos.

“The best investment would be a problem gambler,” former DraftKings data analyst Jayden Butts told the Gray Lady.

The company was trying to figure out if the money it spent on promos like free bets would pay off by getting gamblers to place more wagers, Butts explained.

“And if the answer is yes, open the floodgates,” he told the newspaper.

Six former DraftKings employees who worked on promotional targeting said they later regretted helping build technology they viewed as dangerous.

“It is as predatory as it sounds,” one former DraftKings analyst told the Times.

“If you lose more, we give you more, so you keep playing more.”

A DraftKings spokesperson rejected the report, saying it’s “built on a false premise.”

The piece “portrays routine promotional reinvestment practices common across consumer-facing industries as scandalous,” the spokesperson told The Post.

“And it asks readers to accept, on the word of a few former employees, that DraftKings should not have evolved our development efforts from an unvalidated, early-stage data model to a regulator-informed, evidence-based responsible engagement system.”

The company touted its naming of a “chief responsible gaming officer” who reports directly to the CEO, as well as a department of more than 50 full-time employees “focused on responsible engagement.”

“Responsible engagement is not a side initiative,” the company rep said. “It is embedded across our business and essential to DraftKings’ long-term sustainability.”

The starkest example cited by the Times was that of Bryan Biehl, who told the Times he lost nearly $70,000 gambling online, more than half of it through DraftKings.

Biehl said that when he began therapy for gambling addiction in late 2024, promotional emails from DraftKings became a relapse risk.

“I would get flooded with bonuses and deposits,” he told the Times. “If you are in addiction, you are not going to say no.”

Emails reviewed by the newspaper showed that Biehl received 40 DraftKings promotions during the first two weeks of December 2024.

He said he gave in to temptation one final time on Christmas Day, before placing himself on self-exclusion lists that blocked him from gambling apps.

DraftKings declined to comment to the Times on Biehl’s account, though it rejected the suggestion that its promotional practices improperly target customers.

The company told the Times that promotions are “directed toward customers who demonstrate sustained, engaged use of our platform, not toward customers based on their losses,” and said it “rejects any implication that its marketing practices are unfair or improperly targets customers.”

Promotions represent a major part of DraftKings’ business.

The company generated around $8.7 billion in gross revenue from sports betting and online casino customers last year while handing out roughly $3 billion in promotions, according to Citizens Bank research cited by the Times.

DraftKings has also publicly touted its use of data science and AI in its promotional strategy.

An executive recently told investors that analytics helped improve margins on promotion-driven sports bets by 13% in 2025 and that the company used AI to personalize hundreds of millions of dollars in promo spending, according to the Times.

Meanwhile, employees working on responsible gambling developed separate predictive technology designed to identify customers who might be developing gambling problems.

Former DraftKings data scientist Nestor Hernandez began developing a machine-learning model in mid-2024 that used customer behavior — including deposits, withdrawals and efforts to chase losses — along with age and gender to generate risk scores.

“The idea of this model is to be more proactive instead of being reactive,” he told the Times.

“You will basically predict that a user will be in trouble, let’s say, a few days or a few weeks in advance. And you can act accordingly.”

The project was later shut down, according to former employees cited by the Times.

Lori Kalani, DraftKings’ chief responsible gaming officer, told the Times that company leaders made a “collective decision” not to use predictive technology for problem gambling because “we evaluated that it wasn’t evidence-based.”

She said DraftKings believed its existing system was a “better methodology.”