Ex-DraftKings staff say AI targeted free bets to gamblers most likely to keep losing. Vivian Tran Tue, September 22, 2026 at 4:47 PM PDT * Former DraftKings employees revealed the company used AI to target customers most likely to bet more and lose more, raising concerns about responsible gambling practices. A New York Times investigation is raising new concerns about how artificial intelligence is used in online gambling after former DraftKings employees said the company used machine-learning models to identify customers most likely to respond to promotions by betting more - and losing more. Here's what to know. According to Jayden Butts, a former DraftKings data analyst, one 2023 assignment involved evaluating a model built to estimate how much casino users might lose after getting a promotion. DraftKings spent hundreds of millions of dollars each year on offers like free bets, profit boosts, and deposit bonuses, and tried to determine which promotions were most effective. Butts said that goal disturbed him because "the best investment would be a problem gambler." He was not the only former employee to raise concerns. Six people who worked on promotional targeting said that DraftKings continued improving those methods, while former staffers involved in responsible-gambling efforts said projects aimed at predicting addiction risk were delayed or shut down. In response, DraftKings said its marketing does not improperly target users and maintained that promotions are directed at "customers who demonstrate sustained, engaged use of our platform, not toward customers based on their losses." Lori Kalani, the company's chief responsible gaming officer, said DraftKings tracks "potentially risky behaviors." She also said the company chose not to use predictive risk-scoring technology because it had not been shown to be helpful. More background. Since the Supreme Court's 2018 decision opened the door for states to legalize online sports betting, companies such as DraftKings and FanDuel have helped turn smartphones into always-available gambling platforms. DraftKings says its customer base has grown from five million in 2022 to 11 million. DraftKings brought in about $8.7 billion in gross revenue in 2025 and gave out roughly $3 billion in promotions, citing Citizens Bank research. Researchers and public health experts have long regarded gambling as addictive, and the paper pointed to signs of mounting strain, including sports-betting-related calls to Ohio's problem gambling help line rising more than fourfold after legalization in 2023. Former DraftKings data scientist Jacob Shulkin said the offers work in part because of how they feel to users. "I feel I'm getting free money," he said, "but really it's dragging me back in." What's being done? DraftKings says it has a range of safeguards in place, including cool-off periods, self-exclusion lists, help-line information, and a nationwide monitoring program that tracks more than two dozen indicators of potentially risky behavior. If a customer triggers those markers, the company may send responsible-gambling messages, educational videos, questionnaires, or, in some cases, shut the account. Kalani said that DraftKings does not send promotions to users who have already been flagged or to people who have taken themselves off the platform. The company also said it uses large-language models to review customer messages for signs of distress. Former employees, however, said that those measures are mostly reactive. A separate internal project led by former data scientist Nestor Hernandez was intended to use machine learning to identify trouble earlier, potentially days or weeks before a customer would otherwise need intervention. "The idea of this model is to be more proactive instead of being reactive. 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," said Hernandez. Other gambling companies, including FanDuel and Fanatics, have said they use third-party risk-scoring tools. "It is as predatory as it sounds. If you lose more, we give you more, so you keep playing more," said a former DraftKings analyst. The DraftKings report also points to bigger questions about an industry shaped by aggressive promotion, weak guardrails, and growing scrutiny. These articles cover nonstop betting ads aimed at young men, a sports-betting fraud case, criticism of another gambling company, and a separate fight over AI costs. - In federal court, a sports betting influencer admitted paying a player to alter performance. - At Penn Entertainment, shareholder criticism of executives deepened questions about conduct across gambling companies. - In British Columbia, fears over disproportionate energy consumption sparked unusual government precautions on AI. Get TCD's free newsletters for easy tips, smart advice, and a chance to earn $5,000 toward home upgrades. To see more stories like this one, change your Google preferences here.

DraftKings reported 15% year-over-year growth in sportsbook handle at the start of the NFL season, while maintaining its target of approximately $1 billion in adjusted EBITDA for 2026. CEO Jason Robins said the company expects earnings to grow materially in 2027. The company's prediction markets business is scaling rapidly, with trading volume reaching nearly 2.5 times July levels. More than 1 million customers are now participating, and DraftKings claims a near-double-digit share of sports prediction-market activity. DraftKings has built three times as many NFL markets as competitors, along with roughly 1.5 times as many college football and Major League Baseball markets. The company's iGaming business has also begun regaining market share in certain states.

DraftKings fights to revoke Interactive Games geolocation patent. September 21, 2026 Key Points * The contentious patent centers on geofencing technology * DraftKings claims that the patents are not specific enough * Similar claims against FanDuel were largely dismissed Gambling giant DraftKings has petitioned the US Patent and Trademark Office to challenge US Patent No. 12,406,284, held by Interactive Games LLC. This development follows a lawsuit by global financial services firm Cantor Fitzgerald, accusing DraftKings of violating patents allegedly belonging to its now-inactive gambling-technology arm, Cantor Gaming. DraftKings now seeks to attack the patent itself. DraftKings claims the Patent contains nothing new. US Patent No. 12,406,284 gives gambling companies a means to block users from placing wagers when they are in a jurisdiction where such activities are prohibited. This geofencing solution also controls the distribution of promotional materials and alerts users when they are in a restricted area. However, DraftKings claims that none of the patent's claims are actually new inventions. According to the gambling giant, the patent's concepts were well-known long before its 2009 filing. DraftKings claims that such technology is now ubiquitous and cannot be protected by the contentious Interactive Games patent. The company also contends that the claims are obvious in view of prior art, making the claims unpatentable. During prosecution, the Examiner did not apply the material prior art or straightforward combinations presented here, which render every challenged claim obvious. DraftKings petition Two of the five patents involved in April's lawsuit between Interactive Games and DraftKings were invented by US Secretary of Commerce Howard Lutnick during his time as Cantor Gaming CEO. These patents are now the property of Interactive Games and are at the center of the current clash with DraftKings. Geofencing technology is critical for mobile wagering. This dispute is also developing outside of the Patent and Trademark Office. Interactive Games took DraftKings and FanDuel to court, alleging that the two sportsbooks had violated five of its patents. DraftKings tried to dismiss the challenge, arguing the patents were overly abstract and were ineligible for proper protection. The implications of this clash could stretch far beyond the companies involved. Geofencing technology has become an operational necessity for many gambling operators in the US. Individual states have different gambling regulations, so mobile wagering companies aiming to remain compliant must track individual customers and ensure they cannot place a bet from a prohibited jurisdiction. Past precedent would favor DraftKings in this case. FanDuel faced a similar challenge from Interactive Games, and the Patent Office eventually ruled that only one of the several claims was patentable. The Patent Trial and Appeal Board must now decide whether DraftKings' petition has merit. It may then launch an investigation and take appropriate action.