DraftKings uses AI to target likely losing gamblers, EFF says
The Electronic Frontier Foundation (EFF) says online sports betting company DraftKings is using AI to target customers who are most likely to place losing bets and respond to gambling promotions. The EFF describes this as a form of online behavioral advertising: companies personalize the ads they show based on the data they have collected about you, and the more data they have, the more personalized the ad can be.
According to the New York Times, as the EFF cites it, DraftKings is using its customers' betting records to train a machine learning model to find losing gamblers. Once found, these customers get targeted advertising designed to lure them back to the site to place more bets, bets that DraftKings thinks will be losing ones. The EFF argues DraftKings has a business incentive to keep losing gamblers coming back, because these are the users actually making the company money. It also says that people considered "problem gamblers", meaning people who repeatedly gamble despite harm to themselves, their finances and their relationships, are highly likely to be targeted by the model. In the EFF's words, by re-engaging them through promotions aimed at keeping them on the platform, DraftKings is capitalizing on their vulnerability for profit instead of mitigating their risk.
The EFF's broader argument is that predatory behavioral advertising is not new, but AI has magnified its harms. Behavioral advertising already pushes companies to collect vast quantities of data. Adding AI means even more data is collected to train and refine models. Because AI operates as a black box, the people building the models can rarely predict which data points are most useful, which drives them to keep collecting more. AI also lets companies process enormous data sets much faster.
The EFF also links ad-tech data to the wider surveillance industry. It says data collected for targeted ad placement is being sold to insurance companies, banks, and state and federal law enforcement agencies such as CBP. It adds that earlier this year ICE published a Request for Information "seeking information to better understand how the industry's commercial Big Data and Ad Tech providers can directly support investigations activities."
One point cuts against a common policy fix. DraftKings seems to be using solely "first party data", meaning only data it collects directly from its users, with no data bought from third parties. The EFF concludes that policies limiting only third-party data sharing and selling would not be enough to stop such ads. Its position: policymakers must ban online behavioral ads. If companies cannot send personalized ads, they will have less incentive to collect the behavioral data that powers them. The post closes by pointing readers to the EFF's Surveillance Self Defense project and its tips for protecting yourself on mobile apps and websites.
Key facts
- Per the EFF, citing the New York Times, DraftKings trains a machine learning model on customers' betting records to find likely losing gamblers.
- Those customers then get targeted ads meant to lure them back to place more bets that DraftKings thinks will be losing ones.
- The EFF says problem gamblers are highly likely to be targeted by the model.
- DraftKings seems to use only first-party data, so the EFF argues limits on third-party data sales are not enough and calls for a ban on online behavioral ads.
- The EFF says ad-tech data is sold to insurers, banks and law enforcement agencies such as CBP, and that ICE issued a Request for Information on commercial Big Data and Ad Tech providers.
Why it matters
The case shows machine learning applied to a very specific commercial goal: finding the customers who lose money and drawing them back. The EFF's point is that this is where AI-driven behavioral advertising ends up when the incentive is profit from repeat losers. It also uses the case to make a policy argument: because DraftKings seems to rely only on data it collects itself, rules that restrict only third-party data sales would not touch this practice.
Who it affects
Most directly, DraftKings customers whose betting records feed the model, and in particular those the EFF calls "problem gamblers", people who repeatedly gamble despite harm to themselves, their finances and their relationships. The EFF also frames the wider ad-tech data supply as an issue for anyone whose data is collected for ad targeting, since it says that data is sold to insurance companies, banks, and law enforcement agencies such as CBP.
How to use it
The post is an advocacy piece, not a tool. For readers who want to limit their own exposure, the EFF points to its Surveillance Self Defense project and to tips for protecting yourself on mobile apps and websites. For policymakers, the EFF's ask is a ban on online behavioral ads rather than limits on third-party data sharing alone.
How solid is it
The description of DraftKings' practice is the EFF's account of a New York Times report, not the EFF's own investigation. The post does not say when the Times report was published or who wrote it. The EFF says DraftKings "seems" to use only first-party data; it does not state this as confirmed. No figures are given, such as the number of customers targeted. The post's conclusions about banning behavioral advertising are the EFF's stated long-held position.
Risks and caveats
The post is an opinion and advocacy piece from an organization that has long argued all behavioral advertising should be banned, so its framing is not neutral. No response or comment from DraftKings is given. The post does not say that DraftKings sells or shares its data with ICE, CBP or anyone else; the data-sale claim is about ad-tech data in general. No legal action, regulator response or specific law is mentioned, and the model's technical details are not described.
“DraftKings has a business incentive to keep losing gamblers coming back to their site, because these are the users actually making DraftKings money.”
— Electronic Frontier Foundation