Online sports betting company DraftKings is using AI to target customers who are most likely to place losing bets and respond to gambling promotions. This kind of targeting is a form of online behavioral advertising,…

561 points•paimapi•1 day ago•424 comments•

424 comments

tedivm1 day ago
ProPublica had one of their reports work with gambling addition experts to see how DraftKings would respond to someone presenting signs of a gambling problem. It's a hell of a read, and makes it clear that this company is full of people with absolutely no ethics whatsoever.

https://www.propublica.org/article/draftkings-sports-gamblin...

WheelsAtLarge1 day ago
People in companies that are a negative public good are by definition unethical. I'm not surprised by anything they do. The real problem is how we've let these companies infiltrate so much of our society so fast. I can't consume any ad supported media without getting some ad about them. This company really defines the phrase "money talks"
m4631 day ago
They're built on adtech, which people don't understand.

You have many adtech online dossiers that are basically a virtual you, that can be poked, prodded and studied for interests and behaviors.

for a very minimal look, maybe check out amazon "about you":

https://www.amazon.com/slc/hub?useAiMode=1

taurath1 day ago
Our representatives both dem and republican (but slightly more Republican) have decided that the mountain of data that for profit companies have on is a benefit overall to the economy and we’re the guinea pigs for psychological experiments - the “American consumer” is the #1 commodity the US mines.
We are unethical for letting it get to the state it has. The voters define the phrase "money talks".
staplers1 day ago

  The real problem is how we've let these companies infiltrate so much of our society so fast
- Glass stiegel repealed - Automatic weapons ban lifted - Sports gambling ban lifted - Many more

All the hard work of the people who suffered and fought to achieve this wisdom only for it to be abandoned.

Generations making the same mistakes over and over even with boundless knowledge at our fingertips. Really showcases how important education and especially reverence for education is.

ngokevinabout 24 hours ago
This includes a large portion of big tech workers, many of whom reading this.
jimbo8081 day ago
> this company is full of people with absolutely no ethics whatsoever

I believe this applies to any company which sells an inherently harmful, predatory, and addictive product or service

qurren1 day ago
I feel like a much larger fraction of the economy is predatory than is made out to be in these gambling discourses. Examples:

* FSA plans are designed to get you to gamble on how much medical expenses you will have; if you overestimate, you either lose the money or spend it on shit you otherwise wouldn't buy; if you underestimate, you pay taxes on stuff you shouldn't be paying taxes on. The healthy alternative would be: Cut the FSA, let people just tax deduct medical expenses at tax time, even small ones.

* Extended warranty plans are baiting you to pay for something you are statistically unlikely to need. The healthy alternative would be: Just service things past warranty and charge a much more reasoanable price for it.

* Insurances but co-insurances, deductibles, clauses: "We'll bait you into paying because you think we'll pay but we'll not actually pay because it says in the fine print"

* Trip protection: Asking you to gamble on the probability of a mishap, instead of just covering mishaps out of the box

shrubby1 day ago
Yes. Gambling goes a long way. I just recommended Natasha Dow Schüll and Addiction by Design.

That leads us to BJ Fogg's Persuasive Design Lab at Stanford and the addictive software design.

Tobacco industry owners figured out their time's out and bought food stock and put their addiction department to design food to be addictive.

Where should we head next?

SoftTalker1 day ago
Hope you're including all the state governments and their lotteries in this assessment.
flatline1 day ago
Meta, ByteDance, ...
lenerdenator1 day ago
The problem is, some humans seem to be consistently drawn towards products or services that fit that description.

In the 1980s, if you wanted to gamble in my city, you went to a gambling den operated by the Civella crime family. If you got caught in a police raid, your life was ruined. If you got behind on your debts, the mob might take it out of you, literally. These were known risks, but people did it anyways.

Then, in the 1990s, there was a change in the casino gaming laws. Casinos opened with harm reduction measures in place. You can absolutely destroy your finances for life in one, but there are ways out.

These apps need regulation like in-person gambling has. Whatever they currently have, it's not enough.

groestl1 day ago
IMHO one shouldn't expect a company to have any ethics to achieve a positive outcome for society. This needs to be baked into the rules (taxes, regulation, ...), so the ethical behavior becomes the rational behavior.
autoexec1 day ago
I think we should be able to expect a company to have ethics, just like we should be able to expect them to follow the laws, but we should also regulate them to ensure that they do and punish them meaningfully when they fail to.
17186274401 day ago
You can't have rules in a society, that are against the moral feeling of sizable chunk of the population. That's just going to be a source for conflict. At some point you do need a population with a moral compass or you get nowhere as a ruler, especially in participatory ruling systems like a democracy.
slashdave1 day ago
So, you want government to decide what is good and bad behavior?
Barrin921 day ago
companies are a fiction made out of people, they don't have anything, and regardless what the rules are I expect those people to behave ethically at any given time.

I'm not entirely sure when people started to have this idea that when they walk through a company door, as if this is some magical portal into the realm of amorality, give up their human responsibilities and faculties

gigatree1 day ago
Would love to be a fly on the wall in whatever board room in the world has somebody saying “yes, we could increase profits by doing X, but that would be unethical so of course we won’t”
This happens at every gambling company in regulated markets like the US or Europe.

For comparison, there are offline casinos who use targeted adverts saying that they do not comply with regulators, and their adverts are designed in such a way as to appeal to people with gambling addiction (usually showing some kind of live play, which is banned in every regulated market afaik).

You can be sceptical of the motives of individuals but there are very strong corporate incentives from state regulators (in the US, particularly those with physical casinos).

hnlmorg1 day ago
What usually happens is they talk about statistics rather than demographics. Eg “when doing x we’ve seen a 5% rise in engagement but a 50% rise in spend from those engaged”

Nobody is actually blind to the reality of the stats but this kind approach makes it both easier to dehumanise their actions as well as giving them plausible deniability when asked if they target specific demographics such as addicts.

BloondAndDoom1 day ago
I don’t think anyone ethical really goes into gambling business. I know engineers who left their high paying job in these “gaming” businesses to work for software companies because they see how many lives are destroyed and they are part of that system
bunderbunder1 day ago
I would be genuinely surprised if they weren't.

My data science graduate program had a class that analyzed major data science success stories. The very first one covered how Caesar's Entertainment built models and ran experiments to identify their "most valuable customers", figure out how to predict when they were getting ready to leave the casino, and intervene with incentives and perks designed to get them to stay and keep gambling. And also how all of their competitors rushed to implement their own programs in response.

Look at it from the casino's perspective: their entire business model is centered on exploiting quirks of human psychology to separate people from their money. Expecting prosocial behavior from them is like expecting a squirrel to ignore your bird feeders.

omnicognate1 day ago
The EFF isn't saying it's a surprise that companies are doing this. Nobody's surprised by that. They're drawing attention to it and saying they shouldn't be allowed to.
hananovaabout 16 hours ago
I just don’t understand why casino’s feel the need to do that. They already have the edge, they would still turn a profit.

Same goes for banning advantage players. Why? The people that can successfully do it are a vanishingly small group, and even if every single one of them picks your casino because it doesn’t ban advantage players, the sheer amount of incompetent advantage players that would try alongside those would make it so you still turn a profit.

Peaches4Rentabout 12 hours ago
It's only the most cutthroat people who end up being in the position to make the decisions. So they end up making the decisions that come naturally to them
prepend1 day ago
Isn’t this similar to all ads for useless stuff.

We’re being targeted to buy $100k cars we don’t need. Not much worse than being targeted to gamble an extra $10k.

At least with a car you know exactly what you're getting, you might not value it but many people out there are absolutely getting their money's worth back from a 100k car, be it ego or aesthetics or whatever, a gambling addict is just getting exploited and abused, there's no positive to it.
morelandjs1 day ago
I like how you have to be an accredited investor to get involved with riskier investment instruments but you can be a total moron with no money and lose whatever you have left betting on sports and prediction markets.

Btw it’s not just those two, add iGaming into the mix which is cell phone gambling glammed up in Candy Crush form. Leeches, all of them.

I believe there are "casino games" on Apple and Android stores that are similar to actual gambling, you just buy "tokens" that can never be redeemed for cash.

Proof if proof needed of the complete pointlessness of casino gambling. Some people will still do it even when they know they can't win anything.

shnock1 day ago
Have you ever heard of gacha? This is the entire shtick as I understand it
aquariusDue1 day ago
Yep, check out PlayTika's slew of games for an example. They're a pretty large company specializing in this kind of stuff.
WarmWash1 day ago
To be fair, those "investor knowledge" checks are self-reported knowledge.

Some brokerages are more strict, but plenty just let you check boxes.

svachalek1 day ago
"In the United States, to be considered an accredited investor, a natural person must have a net worth of at least $1,000,000, excluding the value of one's primary residence, or have income at least $200,000 each year for the last two years (or $300,000 combined income if married) and have the expectation to make the same amount this year, or must otherwise be a holder of a specific license in good standing."

Of course you can still lie but legally there is a line.

lokar1 day ago
The accredited investor standard is higher then a basic test.
zug_zug1 day ago
Somebody said (I think it was FrostPrime) roughly: Gambling is genuinely the scariest drug, I actually think it's worse than cocaine and it's just right there on your phone.

I think that really framed the issue well to me. Imagine having an addiction problem and having to carry the problem substance around with you 24/7.

> Gambling is genuinely the scariest drug

Every personality has something, it seems, that it tends to get addicted to if given the chance. Gambling has never been that to me. I get bored with most of the games and upset at losing money—even if I net win, I’m irritated about the incremental losses.

On the other hand, I have to manually keep track of how many days in a month I drink because if I don’t I’ll happily have half a bottle of wine every evening, and I think I know where that leads. (When I lose money in a casino I almost always translate that into a nice dinner. Which I will, invariably, enjoy far more than winning imaginary numbers.)

banannaise1 day ago
> and upset at losing money—even if I net win, I’m irritated about the incremental losses.

While you don't appear to be susceptible, it is notable that this mindset is not something that makes you less likely to develop a gambling problem. It's actually part of how they drive addiction. A customer who is annoyed at every loss is often a customer who will chase their losses with more/bigger bets, trying to get the winning high back.

The fact that you think you incrementally lose but are a net winner indicates to me you're illinformed.

As someone with years of experience in this industry, only a fraction of a percent of gamblers actually meet this defination. But they all think they're net winners and write off losses as "incremental"

t-writescode1 day ago
The other one on that list is food (or, using food to cope with trauma, resulting in an addiction).

You have to eat to survive, but when it becomes your only source of peace or happiness and/or you get addicted to it … very bad things happen and it’s very hard to moderate.

abirch1 day ago
Imagine having a gambling addiction and trying to watch sports! I swear every third commercial is for gambling.
sidrag221 day ago
I don't think there is nearly enough attention on the pipeline that has been created for children to grow into good little gamblers. All major sports games have absolute borderline gambling within their game in the form of those fantasy style Card games. Pair that with watching any live broadcast of a major sport and the gross ads for all these major sports better companies, with the ad reads during the game.

Haven't followed all that closely for some other games, but it very much seems like the model for NBA2k is to release a new game with some minor patches each year, charge 70$, then spend the majority of that year crafting patches for the card game to keep whales interested in constantly spending on new packs(which are promptly devalued on the next release, and straight up killing the prior year's game's online service, makes them entirely worthless the next year).

mcmcmc1 day ago
It’s really disturbing to me because sports are one category of entertainment that is supposed to be family friendly and accessible to kids. They look up to pro athletes as heroes and all the gambling ads are directly being shown to children. It shouldn’t be legal to advertise age restricted products and services to kids, even if they’re not the “intended” target. They’re still being groomed to accept gambling as cool and normal. Gambling, alcohol, all those ads should be subject to the same safe harbor restrictions as sexual content. Ban the ads from stadiums and jerseys too.
autoexec1 day ago
I don't watch sports much, but the last times I did they filled the screen with ads for gambling in the middle of the games while they were being played
boogieknite1 day ago
beyond that, every sports podcast actively encourages gambling. hosts lightheartedly joke about their bad beats like its a pratfall. while entertaining as a non-gambling outsider, i think its a colloquial rationalization of life-ruining behavior
htrp1 day ago
and also blasted into your face at any opportune moment (TV, billboards, print media, in person conversations)
IAmGraydon1 day ago
When a gambling addict spends money on a bet, they're actually spending that money on a moment of hope. After the bet is placed but before the cards fall, they can live in a place where there is at least a possibility that they can make enough money to escape their problems. That moment of possibility is experienced as hope, and it's a feeling that's truly addictive to the hopeless.

It's scary like all addiction, but particularly sad at its core.

xdavidliu1 day ago
i've always wondered at the intimate relation between risk, dopamine, anticipation, and utility. I'm not an expert and only going by amateur armchair observation, but i suspect that evolution has spent a lot of attention on the problem of non-guaranteed rewards, and the phenomenon of gambling addiction is merely a reflection of that, just like how that of adhd is a reflection of ancient humans needing to be overly alert for subtle signs of danger (or something like that, not an expert)

That "live in a place with possibility" surely triggers the anticipation part of dopamine (which is what it really is, more so than the pleasure part). Dopamine is also intimately connected to movement: i.e. the shakes for people with neurological conditions as well as addicts going through withdrawal or about to relapse.

NichoPaolucci1 day ago
“Gambling company leans into its target demographic”

I worked with a state lottery that did similar things. Their target demographic was the “every day players” that would compulsively buy at the gas station.

I quit that job because it seems to be morally wrong.

Betting apps are just this taken to the extreme, I feel for people with this addiction but it’s not going away anytime soon.

Loughla1 day ago
I worked with a state lottery as well. They had very clear training for the retailers they worked with to identify and stop problem gambling. There was space reserved in ever ad and on every retailer counter for stop gambling assistance. The few meetings I attended all began with what they had done to reduce problem gambling.

So I'm guessing this varies state by state.

bunderbunder1 day ago
It's hard for me to view that as anything other than mostly for show.

The retailers still have every incentive to sell as many lottery tickets as people will buy, because that's how they make a sizable portion of their money.

And the gambling addiction hotlines are too little too late. I've known people who struggled with gambling. They never admitted they had a problem until they had bottomed out. At that point I doubt the lotteries and casinos particularly care because that well's already run dry, anyway.

If the gaming industry really wanted to put their money where their mouth is on this one, they'd figure out ways to prevent people from getting into that situation in the first place. Putting limits on how much money anyone person can lose, even if only at a single establishment, is one idea that wouldn't even be hard to implement. But of course we won't see that because, unlike gambling addiction hotlines, that runs the risk of reducing their profits.

jcomp1 day ago
I worked with a heroin distributor as well. They had very clear training for the dealers they worked with to identify and stop problem heroin use. There was space reserved in every text and on every dealer’s coffee table for stop heroin assistance.

Not equating your work for a lottery with dealing heroin, I’m just pointing out that to say you don’t want people addicted to heroin while still selling heroin isn’t sufficient, and I think the same applies to lotteries. If they acknowledge the problem stop even offering it as a product.

Imagine having a "stop gambling assistance" section of your fking AD to promote gambling to people
fckgw1 day ago
> Betting apps are just this taken to the extreme, I feel for people with this addiction but it’s not going away anytime soon.

Why? This wasn't a thing that existed 10-15 years ago, this isn't some long-standing institution. We could ban online betting apps today if we wanted to.

cortesoft1 day ago
When widespread sports gambling was illegal before, there were not rich and powerful people whose ability to maintain and grow their wealth and power was tied to keeping sports gambling legal.

Now those rich and powerful people exist, and they will use their wealth and power to keep it legal. It is not easy to put the genie back into the bottle.

treis1 day ago
Sports gambling definitely existed 10-15 years ago. And it's hard to ban things on the internet with cryptocurrency being a thing.

It's pretty wild that we let it be advertised and boggles my mind that pro leagues jumped on the train.

Ajedi321 day ago
> I worked with a state lottery that did similar things. Their target demographic was the “every day players”

That's wild. Wasn't the whole point of having a state lottery to put the state in a better position to be able to discourage people from becoming addicted? The very idea of a "target demographic" seems contrary to that goal; the "target" should be to have nobody buying tickets.

supertrope1 day ago
One of the arguments was to make gambling legal, less harmful, and regulated to protect players from cheating. In my state the state lottery company puts out TV ads. Stores have scratch off vending machines with strobe lights on top. So much for harm reduction and making gambling something that you have to actively seek out.
jleehn1 day ago
> “Gambling company leans into its target demographic”

This was my takeaway as well. Is anyone surprised at this outcome?

LogicFailsMe1 day ago
Ban state lotteries while we're banning DraftKings IMO. I find I cannot have a productive conversation with anyone who thinks the odds of winning the lottery are higher than winning in the stock market buying total market funds.

Ah... Got it... The same galaxy brains that think p(foom) has a materially greater value than an epsilon minimally >0 to avoid divide by zero errors believe in lottery tickets. Got it. Explains a lot, thanks...

evilkorn1 day ago
"poor tax" framed by the state to help fund things education.
gambiting1 day ago
Well, aren't they though, technically?

Your $1 lottery coupon has extremely low chances of winning a million dollars, but they aren't zero. No one will sell you any stocks for $1, but even if they did what is a chance of a random $1 stock increasing in value one million times?

Read the full thread on Hacker News →

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