US lawmakers and states question gambling apps using AI for promos

In short: US lawmakers and state regulators are increasing pressure on online gambling companies over whether AI is used to personalize promotions in ways that encourage more betting.

What's going on

Questions are growing in Congress and in several states about how online gambling companies use artificial intelligence, also called AI (computer systems that look for patterns and make predictions). The focus is on marketing, especially personalized promotions that are chosen based on a person’s past behavior.

In Congress, Senator Richard Blumenthal sent letters on October 22 to BetMGM, Caesars, DraftKings, Fanatics, Kalshi, Polymarket and others. He asked how VIP programs work, how customers qualify, and whether AI is used to tailor promotions. The companies must respond by November 5.

States are also moving. The Massachusetts Gaming Commission asked licensed operators to explain how AI and “machine learning” affect marketing and outreach. Machine learning is a type of AI that learns from past data, like a spam filter that improves after seeing more emails. Massachusetts says replies are voluntary, due November 3, and it has not announced any finding of wrongdoing.

New York’s gaming commission advanced proposals that would limit AI-based personalized sportsbook promotions and add stronger protections for people considered at risk. Louisiana regulators gave DraftKings a conditional four-month license extension while they review concerns that include AI and customer-data practices. Maryland officials have called for laws to restrict targeting of people showing signs of problem gambling, and Maine says it is monitoring the issue.

What to watch

This scrutiny follows reporting that DraftKings used models to predict who might keep betting after getting a promotion. DraftKings has denied targeting people based on losses or signs of gambling problems. Watch for whether new state rules, or a broader federal push, sets clear limits on how gambling apps can use personal data for promotions.

Source: NYTimes