REPORT: Sports Gambling App Allegedly Uses AI To Target Those Most Likely To Lose Money On Bets

A popular betting company built artificial intelligence to hunt down the customers most likely to bleed money, then flooded them with incentives to keep wagering.

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DraftKings created a machine learning system in 2023 that ranked online casino players by how much they were expected to lose after collecting a free bet or bonus, according to a New York Times investigation published Friday. The Times reviewed internal memos, presentations and betting records, and spoke with more than 40 former staffers.

The tool weighed each gambler’s playing frequency, daily balances and the ratio of losses to wagers, the Times reported. Workers referred to the resulting figure as an “elasticity” score, and a higher number meant a customer was worth chasing with more perks. (RELATED: Sports Betting Industry Playing Its Hand In 2026 Elections)

Jayden Butts, a former data analyst who tested the system on thousands of casino players, grew uneasy about who the math favored. “We are looking for traits and features that we can target that indicate a good investment,” Butts told the Times. “The best investment would be a problem gambler.”

The company could have pointed the same data the other way. A data scientist named Nestor Hernandez began building a model in 2024 to flag gamblers sliding toward crisis, but DraftKings shelved the project, according to the Times. Chief Responsible Gaming Officer Lori Kalani said leaders reached a “collective decision” against predictive tools because the approach was not “evidence-based.”

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DraftKings disputed the reporting. The firm told the Times its promotions go to customers who show “sustained, engaged use” of the platform rather than people singled out for losing, and it called Butts’s test “preliminary and inconclusive.”

The stakes are considerable. DraftKings collected roughly $8.7 billion in gross gambling revenue last year while handing out about $3 billion in promotions, the Times reported, citing Citizens Bank research.

Washington has taken notice. Sen. Richard Blumenthal of Connecticut and Rep. Paul Tonko of New York introduced the SAFE Bet Act, which would forbid sportsbooks from using AI to track betting habits and serve personalized offers, according to AboutLawsuits.com. DraftKings and rival FanDuel, meanwhile, poured record sums into federal lobbying in 2025, with DraftKings roughly doubling its spending to about $900,000, OpenSecrets reported.

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