Massachusetts to review AI use by all licensed sports betting firms

In short: Massachusetts regulators plan to review how every licensed sports betting company uses AI after reporting about DraftKings’ targeting practices.

What happened

The Massachusetts Gaming Commission said it will review how each licensed sports betting operator in the state uses AI and machine learning. Machine learning is a type of AI that looks for patterns in data, like a system that learns from past behavior to make guesses about what someone might do next.

The review follows a New York Times report about DraftKings. The report said DraftKings used machine learning tools to identify customers who were more likely to lose more money, and then aimed more promotions at them. The Times also reported that DraftKings used an internal “elasticity” score to help decide where to spend money on promotions.

The commission’s executive director said the agency will first assess DraftKings’ use of the technology. After that, it will look at other licensed operators as well. The commission said it wants to understand the specifics of the reporting before deciding whether any new rules are needed.

DraftKings disputed the implication that its promotions target users based on losses. The company said its offers go to customers who show sustained engagement, meaning people who keep using the app.

DraftKings is licensed for sports betting in New York, according to the New York State Gaming Commission. However, the review described here is being carried out by Massachusetts regulators, not New York regulators.

Why it matters

Sports betting apps can use AI to decide who gets discounts and special offers, similar to how stores send coupons to certain shoppers. Regulators are signaling they want to know whether these systems might push people who are at higher risk of losing money to bet more.

Source: NYTimes