DraftKings Hit With Class Action Over Bonuses for Losing Players

^{The Massachusetts Federal Courthouse Building / © Shutterstock}

A proposed class action has been filed in the United States against sportsbook operator DraftKings. The plaintiff alleges that the company used artificial intelligence to identify customers who were more likely to lose money and then targeted them with personalised bonuses and other offers designed to encourage them to continue betting, Law360 reports.

The lawsuit was filed in the U.S. District Court for the District of Massachusetts on September 30, according to the court docket.

The plaintiff alleges that DraftKings analysed user behaviour and used algorithms to identify customers deemed particularly valuable targets for additional promotions.

According to the complaint, this approach allowed the sportsbook to target vulnerable customers more aggressively, including those who regularly lost money.

The lawsuit claims that these personalised offers may have encouraged such customers to continue betting, generating additional revenue for the company. The court has not yet ruled on the merits of the allegations.

The issue attracted wider attention following an investigation by The New York Times. The newspaper reviewed internal DraftKings materials and interviewed more than 40 former employees. According to the report, the company developed a model that estimated how much additional money a customer might lose after receiving a promotional offer.

DraftKings disputed the investigation’s findings, saying that its promotional practices had been mischaracterised. The company has also publicly emphasised its investment in responsible gambling tools. The filing of the lawsuit does not mean that the allegations have been proven in court.