DraftKings is using artificial intelligence to identify customers who are most likely to place losing bets, according to a report by the Electronic Frontier Foundation. The online sports betting company trains machine learning models on its customers' betting records to pinpoint individuals whose gambling patterns suggest they will lose money. Once identified, these customers receive personalized advertisements designed to lure them back to the platform to place additional bets—bets that DraftKings anticipates will be losing ones.
The image visualizes the surveillance aspect of DraftKings' AI-driven behavioral advertising, where users' gambling patterns are monitored to target them with ads.
This practice constitutes online behavioral advertising, where a company uses collected personal data to deliver targeted promotions. DraftKings relies solely on its own first‑party data—information gathered directly from users' betting activities—to power its AI models, avoiding the need to purchase additional data from third parties. The report notes that AI operates as a black box, making it difficult for developers to predict which data points are most useful, which drives continual collection of more data and enables rapid processing of large datasets, thereby amplifying the harms associated with behavioral advertising.
A direct consequence of this data collection is that the information gathered for ad targeting is being sold to insurance companies, banks, and state and federal law‑enforcement agencies such as CBP, with ICE also expressing interest in using the data for investigations. Because DraftKings’ model depends only on its own data, the Electronic Frontier Foundation argues that policies limiting only third‑party data sharing would be ineffective; instead, a comprehensive ban on all behavioral advertising is necessary to remove the incentive for companies to collect and exploit personal information.