Over the weekend, The New York Times published an investigation into DraftKings. The upshot is that this obviously exploitative and profit-driven company exploits its customers in the pursuit of profit in all the ways that you might have feared. The story features on-the-record testimony from former DraftKings employees who say that the company not only built tools to identify customers who are most likely to lose and entice them to keep betting, but also shut down projects that could have helped the company identify potential problem gamblers more easily. One source, a former data analyst named Jayden Butts, told the Times that he was tasked with testing a machine learning model that was able to not only identify which customers were most likely to be convinced to gamble with promotions and free bets, but target those most likely to lose those bets. From the Times:
The core question was, “Is this person going to give us more than we’re giving them?” Mr. Butts said. “And if the answer is yes, open the floodgates.”
[...]
Data scientists had trained the new casino model on historical data. It was Mr. Butts’s job to test it on real customers. Each week, the model vacuumed up information about a user’s recent activity. The score it calculated was known internally as “elasticity,” a term borrowed from economics.
Users with below-average scores were deemed “inelastic” and marked for fewer incentives. The “elastic” bettors remained.
Two other former employees told the Times that when they raised concerns that customer-targeting initiatives like the one Butts worked on could potentially exploit problem gamblers, they were told not to put any protections in place.
Other sources who worked on risk-assessment models for DraftKings told the Times that one of their projects, which used customer data to predict which users might become problem gamblers, was shut down without much explanation:
One member of that team was Jake Shannin. “Our conclusion was that it is possible even with simple rules to get a better-than-guessing sense” of whether a customer would end up needing an intervention, Mr. Shannin said.
In early 2025, Mr. Shannin said, the team prepared to share the new model with company officials, including [chief responsible gambling officer Lori] Kalani. But the day of the presentation, the meeting was canceled. Two other attempts by DraftKings employees to build similar algorithms have also been shelved, according to two former employees.
Ms. Kalani said that company leaders made a “collective decision” not to use predictive technology for problem gambling. “We evaluated that it wasn’t evidence-based,” she said. The company decided that its existing system was a “better methodology.”
One day after the Times published its story, CBS News came out with its own story about FanDuel, which features a former FanDuel employee telling the network that the sports book used its customer data to target users who were taking a break from gambling and needed to be enticed back onto the platform. He also claims that FanDuel doesn't cut off problem gamblers. "I had conversations with people where they would say, 'Well, we know what we should do, but … we don't want to slow them down from placing a bet," he told CBS.
In both stories, DraftKings and FanDuel offer pushback on CBS and the Times' reporting. DraftKings marched out their chief responsible gambling officer, Lori Kalani, to tell the Times that the tools being described by Butts and other former employees are no different from the marketing and customer acquisition tools that other companies use to bring people to their products. The president of the Sports Betting Alliance, Joe Maloney, stressed to CBS that problem gamblers are few and far between, and that FanDuel gives customers all sorts of opt-in tools to set betting and deposit limits, should they determine for themselves that they have a gambling problem. Both Maloney and Kalani also rolled out the familiar argument that even when customers are losing money, they are buying something in return: entertainment.
"Customers who are betting within their means, are betting for entertainment and betting for fun," said Kalani.
"It is for entertainment. It is not for wealth creation," Maloney said.
This has always been a foundational argument in favor of gambling: the idea that losing money is incidental to the rush that can be enjoyed from putting it on the line in the first place. This is a much easier argument to make within the confines of a casino, where there exists the potential for camaraderie and the feeling that one is participating in a shared activity with other gamblers. And at least there are free drinks.
What entertainment is meant to be found in the isolation of a phone, though? One particularly disturbing portion of the Times story is the revelation that DraftKings makes one-third of its revenue from online casino games, like blackjack and digital slots, despite those games only being offered in a fraction of its jurisdictions. This grim fact sits snugly next to the main character of CBS News' story, a sports gambler named Esteban Ruiz-Haynes who allowed a camera crew into his apartment to film him gambling on college football games. The 29-year-old pest control salesman told CBS that he bets more money on an annual basis than he makes in salary, and the network's camera crew documented him losing $500 in a single afternoon by betting college football parlays.
The footage of Ruiz-Haynes gambling in his home is unbelievably depressing, as is the idea that DraftKings is making billions of dollars every year from people who are sitting on their couches playing a slot machine on their phones. You can get bogged down all you want in arguing the ethics of how companies like DraftKings and FanDuel find and retain customers, but there's no denying what their success and profitability requires. It requires a 29-year-old with a good job spending his Saturday locked inside his completely barren apartment, watching football games on his TV and phone, agonizing over the bad decisions he's made. It requires millions of people around the country to be all alone, staring into the glow of their phone screens, hoping for a good spin.
