DraftKings Sued Over AI "Elasticity" Model Allegedly Targeting Losing Bettors
DraftKings is facing a proposed federal class-action lawsuit alleging the company used an internal artificial-intelligence model to identify which customers were most likely to keep gambling — and losing — if the company sent them more promotions. West Virginia resident Daniel Vest filed the complaint on September 30 in a Massachusetts federal court, where DraftKings is headquartered, seeking to represent a nationwide class of customers he says were similarly targeted.
What the lawsuit claims
The complaint leans heavily on a September 19 investigation by The New York Times, which reported that DraftKings built a machine-learning system to score customers on "elasticity" — essentially, how much a player's betting activity would increase in response to a promotional offer. Customers flagged as "inelastic" reportedly received fewer incentives, while those flagged as "elastic," and therefore seen as more responsive to promotional pushes, were treated as more valuable marketing targets. Vest says he personally received at least 70 emails, texts, and push notifications from DraftKings over a roughly 30-day span ending September 25, and argues the volume and targeting reflect the model described in the Times report.
The legal argument
Vest's suit contends that this use of customer data conflicts with DraftKings' own privacy notices, which state that personal information may be used to help identify potentially problematic betting patterns and connect customers with responsible-gambling resources. The complaint instead frames the "elasticity" scoring as using that same kind of data to do the opposite — identifying customers likely to lose more, or to drift away from the platform, and using that information to keep them wagering. It also cites Massachusetts gambling regulations that bar sportsbooks from using customer data to promote additional wagering through AI or machine-learning systems an operator knows, or should reasonably expect, could make a platform more addictive. The suit seeks damages, refunds, and disgorgement of money tied to the model, plus an injunction barring DraftKings from using it to keep customers gambling.
DraftKings' response and regulatory backdrop
A DraftKings spokesperson denied the core allegation in comments relayed by Boston.com, stating the company does not use AI to target customers based on losses or on signs of potential problem gambling, and said DraftKings intends to defend itself vigorously against the suit. Separately, the Massachusetts Gaming Commission is reviewing DraftKings' and other licensed sportsbooks' use of AI and machine-learning tools in the wake of the Times reporting, though the commission has not made any finding of wrongdoing.
Why it matters to bettors
Regardless of how the case is resolved, it puts a spotlight on something most bettors can't see from their end of the app: the marketing and promotional messages a sportsbook sends aren't necessarily distributed evenly, and some platforms use behavioral data to decide who gets which offers. Anyone who feels promotional contact from an operator has become excessive can typically adjust notification and marketing preferences directly in the app's account settings, and operators licensed in most states are required to provide self-exclusion and cool-off tools for players who want to step back from an account altogether.