KEY TAKEAWAYS
- The company acknowledged one instance of using a tactic similar to that employed repeatedly by FanDuel in disclosing a video made by New York Knicks player Miles “Deuce” McBride.
- DraftKings told federal lawmakers that it does not target problem gamblers, after members of Congress quizzed the company about its loyalty program, VIP practices, and AI use.
- Sen. Richard Blumenthal, Rep. Valerie Foushee, and Rep. Paul Tonko wrote to numerous sports betting and sports event contracts operators on Oct. 22, asking for responses by Nov. 5.
DraftKings told members of Congress that it does not target problem gamblers or use AI to tailor promotional offers based on customer gambling activity.
In the same letter responding to a Congressional inquiry, the company acknowledged it sent a personalized Cameo video from New York Knicks guard Miles “Deuce” McBride to a gambler, similar to the one from Bryce Harper sent by a FanDuel host to a VIP customer.
“As a general practice, DraftKings does not rely upon personalized content from professional athletes or major celebrities as an incentive for eligible DraftKings Rewards customers,” the letter reads in part. “We are only aware of the loyalty team sending one Cameo of Miles McBride – an American professional basketball player for the New York Knicks – to a customer.”
The confirmation came in response to a question to operators from Sen. Richard Blumenthal (D-CT), Rep. Valerie Foushee (D-NC) and Rep. Paul Tonko (D-NY), about whether they sent videos featuring athletes or celebrities to users.
After the furor surrounding its use of a video featuring Harper to contact a former VIP member with known gambling struggles, FanDuel confirmed that it sent roughly 30 similar videos over the past two years. In an Oct. 20 letter to the legislators, the operator said the outreach was intended as “customer-appreciation gestures and were not commissioned or sent to induce continued gambling.”
Congress broadened inquiry to include DraftKings, others
Blumenthal, Tonko, and Foushee wrote to numerous sports betting and sports event contracts operators on Oct. 22 to ask the to explain by Nov. 5 how they use AI and VIP programs, amid a backdrop that includes:
- The lawmakers’ back-and-forth with FanDuel about its use of videos featuring athletes like Bryce Harper to contact users
- Mainstream media reports that DraftKings used AI in an attempt to keep potential problem gamblers and bigger losers wagering
In a written response to the lawmakers on Nov. 5, DraftKings denied deliberately targeting marketing and promotions toward users who show risk indicators or a higher likelihood of losing money.
“DraftKings does not target anyone based on indicators of potential problem gaming, nor does it seek to identify the customers most likely to lose and get them to bet more,” read the letter.
In response to the legislators’ question about whether the company uses AI to track and target gamblers with perks and “predatory promotions,” DraftKings acknowledged that it uses data science and machine learning to target promotions based on customer preferences, which it called “a basic marketing practice.” However, the company wrote that it does not use generative or agentic AI to do so.
DraftKings says VIP outreach not automated
DraftKings also responded to questions about its VIP and loyalty programs. It noted that customers are automatically enrolled in its DraftKings Rewards program when they sign up, and that the higher tiers of the program provide certain eligible customers with perks and rewards. In some cases, that includes assigning personal hosts to high-tier customers.
The operator added that hosts have discretion to tailor offers for individual customers using information about the customer’s playing habits, but that the process is not automated and uses “human judgment.”
In response to a question asking whether DraftKings ever coaches or trains VIP managers to develop personal relationships with clients “in order to encourage more gambling,” the company responded that the primary goals of such interactions are to keep customers engaged and encourage long-term retention.
The company declined to provide the “average loss/gain” data that the members of Congress requested about DraftKings Rewards users, calling that information “competitively sensitive.”
Throughout the letter, DraftKings made several references to the ways it promotes responsible gambling, including:
- Maintaining a “multi-layered Responsible Engagement program” combining in-app tools and resources, automated behavioral monitoring, customer engagements, and review by trained personnel.
- Employing a Chief Responsible Gaming Officer on its C-suite leadership team
- Mandating that employees receive annual responsible engagement training
- Keeping a list of customers who are ineligible to receive promotions based on criteria such as self-exclusion or self-enforced “cool-off” periods or opt-outs from certain or all gaming-related communications
- Requiring VIP host to conduct a “Responsible Engagement Check” on 10 randomly assigned client customers each month, which includes direct contact with the users on the topic of how their gambling affects their quality of life and finances
Lawmakers wrote to sportsbooks and exchanges alike
Blumenthal, Foushee, and Tonko sent similar letters on Oct. 22 to five other companies with the same questions and Nov. 5 deadline:
- BetMGM
- Caesars
- Fanatics
- Kalshi
- Polymarket
SBC Americas reached out to the other recipients seeking confirmation of whether other companies responded. A Fanatics Betting and Gaming spokesperson confirmed that the operator wrote back to the legislators before the deadline.
AI use in gambling under the spotlight
Federal lawmakers are not the only people asking sportsbooks to explain themselves amid concerns over AI usage.
DraftKings and other licensed sportsbooks faced similar interrogation from the Massachusetts Gaming Commission, which asked them to explain by Nov. 3 how they use AI in activities including marketing and promotions, customer outreach and engagement, and evaluation of user gambling behaviors.
The Massachusetts regulator wrote to licensees after its chairman, Jordan Maynard, promised to investigate operators’ customer-facing use of AI as part of a process of evaluating whether future regulations are needed.
Meanwhile, New York’s gambling regulator proposed new AI-related measures for sportsbook licensees that include restricting the use of AI and algorithmic profiling for the purpose of personalizing promotions, and the office of Maryland Gov. Wes Moore announced plans for new “AI principles” that includes assessing how to ban gambling operators from targeting users showing problem-gambling patterns.
