Massachusetts and New York press sportsbooks on AI marketing use

Regulators in Massachusetts and New York have opened separate inquiries into how licensed sportsbooks use artificial intelligence in marketing, following recent reporting on DraftKings' data practices, according to SBC Americas.

The Massachusetts Gaming Commission said Executive Director Dean Serpa sent letters on 9 October to every sportsbook licensed in the state, asking for written answers by 3 November on how they deploy AI across marketing, customer outreach and the evaluation of gambling behaviour indicators.

The questions put to operators include whether algorithms are used to make marketing decisions about individual players or cohorts, whether losses or wagering frequency factor into promotional offers, and whether AI can predict a customer's future betting activity to tailor incentives.

Other questions ask whether systems can trigger a promotion automatically from a player's recent bets, losses or deposits, whether marketing is adjusted based on a user's predicted lifetime value or profitability, and how much human oversight sits over these processes.

The commission also wants to know whether operators weigh a user's risk indicators before sending targeted promotions, and whether signs of potentially harmful gambling behaviour could ever make a customer more likely, rather than less likely, to receive one.

Serpa's letter followed remarks by MGC Chairman Jordan Maynard at a 24 September commission meeting, where he said the regulator would begin assessing operators' use of AI with Massachusetts customers and would interview representatives from each licensee in person to inform possible future rules.

"These A.I. technologies are evolving rapidly across our society, and we share the concern over their application," Maynard said, according to SBC Americas.

The Massachusetts move came after reporting by the New York Times and ProPublica that suggested DraftKings used AI to analyse player activity and direct promotions toward losing gamblers in ways intended to encourage further wagering.

DraftKings chief executive Jason Robins addressed the coverage directly at the SBC Summit in Lisbon in late September, telling a keynote panel that the characterisation was unfair to the company.

"I think a lot of people — and it's frustrating for us — look at us and say, you're motivated by the wrong things," Robins said. "That could not be farther from the truth. Every single person in the company will tell you that it's not at all what we want. That's the worst possible thing for our company, for our industry."

Robins said the company focused on doing its best within an industry where critics often withhold the benefit of the doubt over its motives.

In New York, the largest regulated online sports betting market in the country, commissioners at the New York State Gaming Commission voted unanimously on Friday to advance a package of AI-related measures for sportsbook licensees.

The proposals would bar mobile operators from using AI or algorithmic profiling to personalise promotions and tailor betting recommendations to individual customers based on their data, and would stop operators offering promotions specifically designed to increase a customer's spending, revenue or engagement, unless the customer consents to such targeting.

A separate proposal approved alongside it would require licensees to identify customers showing signs of problem-gambling behaviour and to designate a staff member to engage those players with responsible gambling tools and resources.

NYSGC chair Brian O'Dwyer said the mobile wagering industry has "long maintained that they consider integration of responsible gaming practices a significant element of their business," and that the proposed rules give operators a chance to demonstrate that by sharing the necessary data.

"The industry is on notice by me and this commission that they need to solve" the problem, O'Dwyer said, according to SBC Americas's account of the meeting.