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DraftKings Accused of Targeting 'Losers' With AI
21 Sep
Summary
- AI model reportedly scored users on 'elasticity' for targeted promotions.
- Slots players were identified as more 'elastic' and spent more money.
- Internal crisis prediction models were allegedly shelved by the company.
A recent investigation alleges that DraftKings employed machine learning to identify and target high-value users, colloquially termed "losers." Ex-employees revealed that an AI model evaluated users based on their likelihood to spend more than they receive from promotions. This "elasticity" model, developed in 2023, reportedly indicated that slots players were more responsive to incentives and consequently spent more. Data from early 2024 allegedly showed highly elastic slots players losing more money.
Further reports indicate that efforts to develop a model predicting user crises and offering interventions were discontinued. Multiple attempts to create such algorithms were allegedly shelved, with one team's presentation canceled in early 2025. DraftKings has stated that its marketing practices are fair and do not target customers based on losses, instead focusing on engaged users. The company also claims that risk modeling technology has not proven helpful.
