Most sports betting and casino license renewals are relatively standard, but DraftKings proved an exception to the rule in Louisiana on Thursday.
The Louisiana Gaming Control Board had plenty of questions for DraftKings President of Operations and cofounder Paul Liberman and Chief Responsible Gaming Officer Lori Kalani during the license renewal hearing concerning recent reports about using AI to target losing bettors and how the company treats VIP bettors that may be showing signs of a gambling problem.
Those concerns, along with one shareholder that has not undergone suitability checks, means the board needs more time than DraftKings has remaining on its license to complete its investigations. DraftKings’ Louisiana sports betting license expires Nov. 10.
“In addition, as some of the concerns that you all have raised today, the Division also has concerns regarding recent allegations brought against DraftKings and, therefore, additional time is needed to fully investigate those allegations,” Assistant Atty. Gen. Delancey Houston said.
The board voted unanimously to conditionally approve DraftKings for a license extension through Feb. 19, with the full renewal hearing scheduled for Feb. 18.
Conditions DraftKings must meet
Chairman Chris Hebert noted the board has used conditional renewals in the past to give the attorney general’s office and the state police time to finish their investigations and expressed his concerns over the reports.
“Now, I recognize and I think this entire board recognizes that a news report, or news reports, plural, are not findings of regulatory violations,” Hebert said. “Nevertheless as regulators, we have a responsibility to examine these matters that could affect the integrity of gaming operations and the protection of our citizens here in Louisiana. With that in mind, this regulatory body will have several further questions that we’d like to ask DraftKings to address, and those questions will come to you in written form in the coming days.”
Those questions are just a part of the seven-part conditional approval DraftKings received:
- Provide all required suitability submissions, including petitions to have the outstanding shareholder considered an institutional holder, submitted within 30 days.
- Submit proposed protocols to ensure the timely notification of shareholder ownership.
- Submit formal responses concerning use of artificial intelligence, prediction market activity, digital audits of Louisiana residents and any other information requested within 30 days of the request.
- Conduct and submit a complete review and certification of compliance of responsible gambling requirements for marketing materials, commercials and digital ads within 30 days.
- Implement and submit monthly compliance reports on the 15th of every month concerning prediction market products, new digital wagering products, anticipated offerings, new forms of contests or promotions, material changes to geolocation, know your customer, anti-money laundering and responsible gambling systems, unresolved compliance issues, significant system failures, material customer complaints, advertising or marketing violations, pending litigation or regulatory actions and other updates, as well as corrective actions and statuses.
- Designate a senior company representative to handle all communications with the board in seven days.
- Fully cooperate with all directives and submit all information required during the conditional renewal.
Jury still out
Hebert stressed that these additional measures are not intended to suggest any wrongdoing from DraftKings.
“To those in attendance from DraftKings, I want to emphasize to you that this proposal is not a determination that DraftKings has engaged in any wrongdoing,” he said. “Rather, it is a measured regulatory response that allows us as a board to fulfill our oversight responsibilities, it will allow you an opportunity to respond, and it will help to ensure the integrity of gaming and the protection of our consumers remain our highest priority.”
Liberman: do not need AI to find losers
Liberman spoke at length about how most of DraftKings’ customers are losers in the first place, so using AI to find and target loses does not really make sense.
“I think it’s important to note we’re an entertainment platform, which means that most of the people that are coming on our platform, they’re spending money – I actually like the word spending money because they’re getting entertainment value out of it,” he said.
“Whether someone is spending $1 and they’re playing for $1, $2, $5, most customers, over the course of time given that we take revenue and use that revenue to pay our taxes, most customers end up, you know, net down. So, identifying a losing gambler doesn’t necessarily make sense in that context because most customers that play on the platform are not going to be winners, they’re going to be someone losing on the plaform.
“But we don’t use that, once again, to target in any way a particular customer or customer segment because we don’t think that that’s relevant.”
Fact check: DraftKings not the first to ban credit deposits
Liberman told the board that DraftKings was the first sports betting operator to ban credit card deposits.
“I will also just add that we were the first in the country to get rid of credit card deposits across the board and not allow them for sports betting,” Liberman said. “And that wasn’t based on any regulation, that was us deciding to make sure that people aren’t using credit for sports betting.”
That is an incorrect statement. DraftKings removed the option to deposit with credit cards in August 2025. Prior to that, Betr banned credit card deposits in October 2022 while Fanatics has never allowed credit card deposits since it took over PointsBet in April 2024.
Further, DraftKings was fined $450,000 by the Massachusetts Gaming Commission for its failure to prevent bettors from using funds deposited by credit cards in other states to bet in Massachusetts through the company’s shared wallet. That was because of a misinterpretation of the rules, the company told the MGC in November 2024.
Kalani: AI helps find problem gamblers
While DraftKings says it does not use AI to target losers, it does use it to find people that need help.
There are multiple triggers that will lead to some sort of intervention from DraftKings’ responsible gambling staff, Kalani explained. Also, if a bettor tells a customer service rep they are in distress or having trouble financially, that will be automatically flagged for review by the team, she added.
DraftKings does close accounts to those that do not take their responsible gambling advice, she continued. The company has closed 175 Louisiana accounts this year, which is trending to be around the same amount as 2025, Kalani said.
Those 175 accounts are separate from those that chose to stop playing, close on their own, or enters self exclusion or a cool-off period. Further, DraftKings does not send promotions to those coming off a cool-off period for two weeks and those coming off self exclusion for 30 days.
“We can’t diagnose when someone has a compulsive gambling problem. We’re not physicians, we’re not clinicians and that’s not our role, but we certainly want to help people enjoy the service, the platform that we’re offering them,” Kalani said. “It does us no good to have people who are gambling out of control, spending more than they can afford to lose, it just doesn’t make sense.
“So we really, truly want people to set those limits. We want people to cool off. I want customers to talk to one another and say, ‘Hey, what’s your limit’?”
