Attorney Jennifer Hoekstra has filed lawsuits against FanDuel and DraftKings, claiming the gambling apps are designed to addict users and prey on those who are already losing.
A recent article in The New York Times exposes DraftKings' use of Artificial Intelligence to target individuals with gambling addiction tendencies. Per the report, the AI models identify those with "significant losses or extended time on the platform" and sends them more marketing and promotions. Alerts include bonus money and profit boosts, to entice users to continue gambling
The explosive report says DraftKings is maximizing profits, like every other business, but critics argue that it exploits those struggling with addiction.
FanDuel disputes claims of fueling addictive behavior, saying they invest in responsible gaming and actively remove users exhibiting problematic behavior. But insiders who built the DraftKings system say they explicitly use tactics to keep customers betting, including rewarding VIPs with luxury experiences and personalized attention.
The more you spend, the more you lose, the more valuable the rewards.
Multiple employees who worked on promotional targeting at DraftKings told The Times they regretted building technology, and now view as dangerous.
“It is as predatory as it sounds,” said a former DraftKings analyst who requested anonymity because he feared retribution. “If you lose more, we give you more, so you keep playing more.”
In a statement, DraftKings said it “rejects any implication that its marketing practices are unfair or improperly targets customers.” The company said in-app promotions are “directed toward customers who demonstrate sustained, engaged use of our platform, not toward customers based on their losses.”
Lori Kalani, DraftKings’s chief responsible gaming officer told the Times its business depended on “customers who are betting within their means, are betting for entertainment and betting for fun.”
And it's big business. DraftKings says it has 11 million customers, up from five million in 2022.
