DraftKings Is Using AI to Supercharge the Harms of Online Behavioral Advertising

DraftKings, the online sports betting company, is employing AI technology to target customers who are more likely to place losing bets and respond to gambling promotions. This method represents a form of online behavioral advertising, where companies tailor ads based on data collected about users. The more data a company possesses, the more personalized the ad becomes.

While DraftKings is leveraging AI to amplify the detrimental impacts of online behavioral advertising, the Electronic Frontier Foundation (EFF) has consistently advocated for the prohibition of all behavioral advertising. According to the New York Times, DraftKings utilizes its customers' betting histories to train a machine learning model, identifying potential losing gamblers.

Once identified, DraftKings delivers targeted advertisements to these customers, aiming to entice them back to the platform for additional bets, which the company anticipates will be losses. The company has a vested interest in retaining losing gamblers, as they constitute the significant revenue source for DraftKings. Regrettably, those categorized as "problem gamblers" (individuals who continue gambling despite harm to themselves, finances, and relationships) are highly probable targets of this model.

By re-engaging these individuals through personalized promotions, DraftKings exploits their vulnerability for profit rather than addressing their risks. While predatory online behavioral advertising is not novel, the application of AI to analyze data and target customers has exacerbated its negative effects. Online behavioral advertising encourages the accumulation of extensive data, which AI further refines and employs.

The opacity of AI makes it difficult for humans to determine which data points are most beneficial to the models, leading to an insatiable demand for more data. AI also enables companies to process massive datasets at an accelerated pace, thereby intensifying the harms associated with online behavioral advertising. A direct consequence of such advertising is the generation of data for the surveillance industry.

This data is then sold to insurance firms, banks, and governmental entities, including the U.S. Customs and Border Protection (CBP) and Immigration and Customs Enforcement (ICE). ICE has even circulated a Request for Information aimed at comprehending how ad tech's commercial data and technology providers can assist in investigative activities.

DraftKings appears to utilize only "first party data" (data collected directly from its users) for targeting, thus not purchasing additional data from third parties. This underscores the fact that policy solutions limiting third-party data sharing and sales would be insufficient to prevent such predatory advertising. Instead, policymakers must enact a ban on online behavioral ads.

DraftKings' AI-driven targeting of losing gamblers exemplifies how ad tech continues to evolve and how companies seek new methods to exploit our data against us. This is why the EFF strongly believes that all behavioral advertising should be banned. If companies cannot send personalized ads, they will have less motivation to collect the data that fuels them.