Massachusetts Gaming Commission Investigates DraftKings’ AI-Driven Promotional Targeting

The Massachusetts Gaming Commission (MGC) has opened an investigation into how DraftKings and other regulated sportsbooks use artificial intelligence to target bettors with promotions.

The investigation follows a New York Times report alleging DraftKings used machine learning to identify customers who were more likely to continue betting and losing after receiving promotional offers.

MGC Chair Jordan Maynard announced the review during a public meeting Thursday and directed staff to speak directly with DraftKings.

What the New York Times Investigation Revealed

The New York Times report included interviews with more than 40 former DraftKings employees, internal company documents, and customer betting records.

According to the report, DraftKings developed machine learning systems that analyzed users’ betting histories. These systems could identify customers who were more likely to keep gambling and losing after receiving a promotion.

Several former employees who worked on the systems told the Times they were concerned the technology could harm people struggling with gambling addiction.

The report also claimed DraftKings stopped separate work on technology designed to identify bettors who might need help based on their gambling patterns.

DraftKings Pushes Back

DraftKings strongly denied the allegations.

The company said it “vehemently denies the suggestion that we do anything to make our offerings addictive.”

DraftKings also said it does not use AI to target customers based on their losses or market to users based on signs of potential problem gambling.

The company said it works to follow all Massachusetts sports betting regulations.

However, the MGC investigation will continue. Executive Director Dean Serpa and commission staff plan to meet with DraftKings to review how the company uses AI and machine learning, including in its promotional activities.

Massachusetts Regulations Already Address AI Promotions

Massachusetts already has rules covering how sportsbooks can use automated technology for marketing.

Regulated sportsbooks cannot use customer data to send promotions through an automated system, including AI, if the technology is known or reasonably expected to increase the addictive qualities of the platform.

Sportsbooks must also submit reports to the MGC at least twice per year explaining how they monitor customer behavior to support responsible gambling and reduce addictive conduct.

These rules will help the commission determine whether DraftKings violated state regulations and whether enforcement action is needed.

A Broader Regulatory Reckoning for AI in Gambling

Massachusetts is not the only state looking closely at AI in gambling.

The MGC created an AI task force following a 2025 UNLV study that found a “governance gap” between the rapid development of AI technology and the regulations designed to control it.

The task force, now led by Serpa, will play a role in the DraftKings investigation.

Maryland Governor Wes Moore has also called for legislation that would stop gambling companies from using algorithms to identify and target customers showing signs of problem gambling.

Other states have also considered or introduced rules covering how gambling companies can use AI.

What’s Next

MGC staff are expected to begin meeting with DraftKings soon.

Maynard said the findings could determine whether the commission takes enforcement action or considers new regulations.

Commissioner Paul Brodeur called the Times’ findings “troubling.”

With regulators across the country paying more attention to AI, the Massachusetts investigation could influence how other states approach the use of algorithms for sportsbook promotions.