DraftKings can keep operating in Louisiana, but state regulators want a closer look at how the sportsbook uses artificial intelligence before renewing its license. The Louisiana Gaming Control Board (LGCB) voted unanimously Thursday to grant DraftKings a conditional extension rather than approve its full renewal application. The decision follows allegations involving AI marketing and responsible gambling practices.
DraftKings appeared before the LGCB on October 15 for a routine license renewal. Instead, the company left with additional reporting requirements and several questions to answer.
Assistant Attorney General Delancey Houston explained that investigators needed more time to examine recent allegations involving DraftKings. The board imposed conditions on DraftKings.
DraftKings must provide information about its use of AI, review whether its advertising complies with responsible gambling rules. They must also submit monthly reports covering customer complaints, regulatory actions, advertising violations, and changes to its compliance systems. Those reports are due on the 15th of each month.
One of the biggest issues is whether sportsbooks use information about users who are losing money to decide who receives promotional offers.
Operators can track how much customers deposit and whether they’re winning or losing. That information can be useful for marketing, but it also raises questions about how sportsbooks treat customers who may be struggling with gambling.
DraftKings is already facing a lawsuit over AI marketing filed by West Virginia resident Daniel Vest. Vest alleges that DraftKings used customer data and automated marketing systems to target vulnerable bettors. He claims to have received approximately 70 promotional messages within roughly one month.
The company has also defended its responsible gambling policies as questions about its marketing practices continue.
The questions facing DraftKings aren’t only in Louisiana. Massachusetts regulators are also examining how sportsbooks use AI to deliver promotions.
The Massachusetts Gaming Commission recently asked operators to explain whether automated systems influence which customers receive offers and whether employees oversee those decisions. At the federal level, the Federal Trade Commission has been reviewing sportsbook advertising.
These inquiries have a common concern: sportsbooks have access to detailed customer information, but regulators want to know how that data influences marketing decisions.
Louisiana has now taken a more direct approach by making additional oversight part of DraftKings’ license renewal process.
DraftKings can continue accepting bets in the state while the investigation begins. However, it must provide the requested information and satisfy the board’s conditions before regulators reconsider its full renewal on February 18, 2027.
DraftKings is clearly facing scrutiny for its AI marketing throughout the country. More state regulators are taking a closer look at these practices. With sports betting becoming an increasingly competitive market, especially with the emergence of prediction markets, allegations like this are making it even more difficult for DraftKings to navigate this challenging environment.
