Massachusetts’s gambling regulator said on Thursday that it would examine how DraftKings and other betting companies that operated in the state used artificial intelligence. The inquiry follows a New York Times investigation that showed how DraftKings has deployed the technology to target losing gamblers with promotions that encouraged more betting.
Jordan Maynard, the chair of the Massachusetts Gaming Commission, which licenses and sets rules for gambling operators in the state, said during a public meeting that he had instructed the commission to “engage with” DraftKings about what The Times reported, and to learn more about how all licensed betting companies in Massachusetts were using A.I.
“These A.I. technologies are evolving rapidly across our society, and we share the concern over their application,” Mr. Maynard said during the meeting. Another commissioner, Paul Brodeur, described The Times’s findings as “troubling” and said the commission needed to “find out what the facts are on the ground.”
The Times reported that DraftKings had used machine learning, a form of artificial intelligence, to analyze customer betting records and identify those most likely to continue gambling — and losing — when sent promotional offers. Six former employees who built those systems told The Times that they worried the technology would harm people struggling with addiction. The company has also sidelined efforts to use similar technology to predict which gamblers may need an intervention based on their betting activity, The Times found.
DraftKings said in a statement that it “works diligently to comply with all Massachusetts sports betting regulations and vehemently denies the suggestion that we do anything to make our offerings addictive.”
“DraftKings does not use A.I. to target anyone based on losses and does not market to customers based on indicators of potential problem gaming,” the statement added.
Massachusetts prohibits using customer data to offer promotions based on any automated system, including those using artificial intelligence, that is “known or reasonably expected” to make a gambling site more addictive. The state also requires licensed operators to report to the gaming commission at least twice a year how they analyze customer behavior to promote responsible gambling and mitigate potential addictive behavior.
DraftKings has submitted those reports, said a spokesperson for the commission, who declined to provide them.
Operators can face discipline for not complying with regulations, including fines or a suspension or repeal of their license. Mr. Maynard said the commission would use the results of the inquiry to determine when or if any further action or policy-making was needed. The spokesperson said the commission had not previously taken any enforcement actions related to the use of A.I.
FanDuel, which also operates in Massachusetts and is DraftKings’ largest competitor, said in a statement that it used machine learning and other technology to look for signs of harmful play by customers so it can better protect them. It did not address whether or how it used A.I. for other business purposes.
A handful of other states either have or are considering rules governing how gambling companies use A.I. This week, Maryland’s governor, Wes Moore, called for a law that would stop gambling companies “from using algorithmic and other means to identify and target users showing problem-gambling patterns.”
Federal lawmakers have proposed a bill that would set nationwide standards for the industry. It includes a ban on the use of A.I. to monitor betting activity and target customers with individualized promotions.
A co-sponsor of the bill, Senator Richard Blumenthal, Democrat of Connecticut, said at a news conference on Wednesday that gambling companies “are relentlessly and tirelessly taking advantage of vulnerabilities, simply to make more money.” He added that The Times’s investigation “provides graphic and powerful proof of what their business model is.”
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