20 September 2026
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DraftKings and many other operators are using AI to target lucrative promotions, raising concerns about addiction risk and a need for stricter regulations.
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Revelations about DraftKings' promotional tactics, detailed in a September 2025 New York Times investigation, show that the company has been using an AI-powered system to identify its most profitable customers and target them with marketing incentives. The company said in a public statement that AI was used to personalize over $400 million in customer promotions in 2025 and that "data science and analytics improved margins on promotion-driven sports bets by 12%."
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But AI-driven personalized betting promotions are already facing severe criticism, with campaigns calling for a widespread overhaul by responsible gambling groups.
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These concerns were heightened by a UK High Court ruling in 2025, in the case of RTM v Bonne Terre [2025] EWHC 111 (KB). The judges explicitly condemned "aggressive algorithmic marketing" as a threat to consumer protection and found that Sky Betting & Gaming, the UK's second biggest online sports betting company, carried out extensive algorithmic profiling of a claimant, a 31-year-old compulsive gambler, for marketing purposes without his consent.
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Although DraftKings and FanDuel have discussed using customer data for sales purposes, they have not revealed the full extent of AI's role in their business models. DraftKings told investors that data science improved margins on promotion-driven sports bets by 12% in 2025 and that AI customized hundreds of millions of dollars in promotions.
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The company portrays this as an effort to improve customer loyalty, but critics argue that AI-driven marketing can exploit vulnerabilities and encourage harmful gambling behaviors.
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DraftKings is currently under investigation by the Illinois Gambling Board, with regulators filing a complaint in 2025 about "highly personalized promotional campaigns used by sports betting operators to keep players engaged and maintain long-term value."
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DraftKings isn't the only betting company using algorithms and AI to attract gamblers. The Australian Communications and Media Authority (ACMA) warned in its April 2026 report on AI and interactive gambling that "the commercial deployment of interactive AI in gambling products may, in some cases, prioritize increased engagement and revenue over harm reduction." While AI could improve player safety, ACMA noted that many applications, including gambling promotions, might worsen harmful behaviors.
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Sportsbook operators have been accused of using predictive analytics to target vulnerable bettors. In 2026, a coalition of UK responsible gambling advocates urged the UK Gambling Commission to take action after the RTM v Bonne Terre ruling, arguing that highly targeted marketing contributed to the claimant's gambling addiction.
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DraftKings has acknowledged that AI could have both harmful and positive effects, stating on its website that responsible gambling is "among the most prominent AI use cases in US sports betting." The industry has also recognized the benefits of protecting users from excessive incentives.
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New York may become the first state to regulate AI in gaming. The New York State Gaming Commission is considering a rule to prohibit AI-driven targeted promotions, which would apply to commercial casinos, mobile sports betting companies, video lottery operators, and other gambling businesses.
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As of September 2026, the SAFE Bet Act remains pending in Congress. The bill seeks to ban sportsbooks from using AI to track individual gambling habits, create personalized promotions, or develop AI-driven betting products like algorithmically priced live micro-bets. If passed, it would offer a federal regulatory approach alongside state-level efforts like New York's.
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