Boston law firm probes DraftKings over AI targeting of gamblers
Boston class action firm Shapiro Haber & Urmy, LLP says it is investigating potential consumer claims against DraftKings over its alleged use of artificial intelligence and machine-learning models to identify gamblers likely to lose money and target them with promotions. The firm says the conduct may have violated DraftKings' terms of service and Massachusetts law.
- Shapiro Haber & Urmy, a Boston class action firm, is investigating potential consumer claims against DraftKings.
- The firm alleges DraftKings used AI and machine learning to find users likely to lose money and target them with promotions.
- It says this may have violated DraftKings' Privacy Notices, Massachusetts gaming regulations and consumer protection law.
- Users who received such offers, including VIP status, and lost money may have a claim, according to the firm.
- The announcement describes an investigation and allegations, with no court findings or DraftKings response.
What the firm alleges
According to Shapiro Haber & Urmy, a Boston-based boutique class action firm, DraftKings used AI and machine-learning models to analyze customer data. The firm says the goal was to identify gamblers who were most likely to lose money or continue gambling, and then to target those users with promotions, incentives and notifications designed to encourage more betting. The stated aim, according to the firm, was to increase company revenue from those customers.
Based on its investigation, the firm believes DraftKings developed a model that scored users on how likely promotional offers would be to make them gamble more and lose more money. Those gamblers were then targeted with promotions, the firm says. These are the firm's allegations and beliefs, not findings by a court or regulator, and the announcement does not include a response from DraftKings.
Privacy notices and Massachusetts rules
The firm says DraftKings publicly promised to use customer data to promote responsible gaming. In its words, the company instead "used customer data to exploit behavioral vulnerabilities for profit." Shapiro Haber & Urmy believes this may have violated DraftKings' Privacy Notices, which, according to the firm, promised that customer information would be used to assess whether patrons were gambling responsibly and to provide assistance when problematic behavior was detected.
The firm also points to Massachusetts gaming regulations. It says these limit how sports-wagering operators may use patrons' personally identifiable and confidential information. It adds that they prohibit using AI, machine learning, computerized algorithms or automated decision-making systems to promote wagers or promotional offers when those systems are known or reasonably expected to make gambling more addictive. The firm further says the conduct may have breached Massachusetts consumer protection law.
Who may be affected
The firm is inviting DraftKings users to get in touch. It says that people who received such promotional offers, including those who were awarded VIP status, and who lost money on the DraftKings platform may have a claim. Interested users can contact Shapiro Haber & Urmy LLP at (617) 439-3939.
The announcement describes an investigation, not a filed lawsuit. It does not say how many users might be affected, what damages could be sought, or whether a case will be brought.
Why it matters
The allegations touch on a question facing sports-betting operators: how far they can go in using AI on customer data to drive engagement when they have also promised responsible gaming. The firm's argument rests on the contrast between what DraftKings said it would do with personal information and what the firm believes it did. Whether the claims hold up will depend on facts that the announcement does not provide. For DraftKings customers in Massachusetts, the notice signals that a law firm is gathering potential claimants.
