Massachusetts to Review DraftKings and Others Use of AI in Sports Betting

The Massachusetts Gaming Commission says that it's planning to review how licensed sports betting operators in the Commonwealth are using AI and machine learning. The review will start with the native DraftKings Sportsbook. This comes after a New York Times investigation that involved DraftKings' promotional targeting. Gambling commissions have been busy lately, as the Indiana Gaming Commission recently denied a request from the NCAA to ban pre-game player prop bets. 

According to the Times, DraftKings used AI to tend to send promotions toward players more likely to lose. The report mentions former DraftKings data analyst Jayden Butts. 

"Mr. Butts’s task was to test that model, prioritizing free bets and bonuses for those likely losers. Soon, a question began to gnaw at him: Aren’t many of these same people prone to addiction? “We are looking for traits and features that we can target that indicate a good investment,” he said. By strict financial logic, 'the best investment would be a problem gambler,' the report said. 

In response, DraftKings told the Times it “rejects any implication that its marketing practices are unfair or improperly targets customers.” Right now, Massachusetts doesn't allow operators to use AI to target promotions in a way that could make the platform more addictive. 

“I’ve requested that Executive Director Dean Serpa and the team engage with the operator to understand the specifics that were reported,” MGC Chair Jordan Maynard said Thursday. 

MGC Commissioner Paul Brodeur mentioned that Massachusetts is perhaps the only state to reference AI in regulation. 

Massachusetts to Review AI Use Across Sportsbooks

DraftKings isn't the only platform that'll be reviewed, though. The MGC will take a look at how all operators are using AI. 

“Any further action or policy making can then be determined by the commission when and if appropriate,” Maynard added.

Massachusetts Regulations Restrict AI Use

Under MGC’s 205 CMR 257.02, this prohibits operators from using player data to promote bonuses/promotions or wagers based on factors such as the following:

"Any computerized algorithm, automated decision-making, machine learning, artificial intelligence, or similar system that is known or reasonably expected by the Sports Wagering Operator or a vendor to the Sports Wagering Operator to make the gaming platform more addictive."

Additionally, operators in Massachusetts must analyze data to develop responsible gambling programs and report trends in said data to the MGC every six months.