The Louisiana Gaming Control Board unanimously granted DraftKings a conditional four-month extension of its sports-betting permit while regulators examine allegations about its use of artificial intelligence and questions about shareholder suitability. The board said the action is not a finding that DraftKings did anything wrong.
The extension allows the company to keep operating in Louisiana while the investigation continues. Its current license expires November 10, and a full renewal hearing is scheduled for February 18; the conditional permit runs through February 19.
At the hearing, Assistant Attorney General Delancey Houston said the Louisiana State Police Gaming Enforcement Division had found information indicating that some shareholders with at least 5% ownership had not completed suitability review. One shareholder had asked to be treated as an institutional investor, but regulators had not decided whether that classification applied.
The board attached seven conditions to the extension. DraftKings must provide the required suitability submissions, or file petitions seeking institutional-investor treatment, within 30 days. It also must submit formal responses about its AI use, prediction-market activity, digital offerings to Louisiana residents and other information regulators request within 30 days.
Within 30 days, the company must also review and certify that its marketing materials, commercials and digital advertisements comply with responsible-gambling requirements. Other conditions require DraftKings to name a senior representative to handle board communications within seven days and to cooperate with the board’s directives throughout the conditional renewal.
Board members questioned DraftKings President of Operations and cofounder Paul Liberman and Chief Responsible Gaming Officer Lori Kalani at the hearing. Much of the discussion concerned a New York Times report alleging that DraftKings used AI to target losing bettors, as well as how it responds when customers show signs of gambling problems.
Houston said the investigation was incomplete and that regulators needed more time to examine the allegations. Board Chairman Chris Hebert said news reports do not establish regulatory violations, but the board must assess issues that could affect gaming integrity and consumer protection.
DraftKings disputed the allegation about targeting losing customers. Liberman said the company can use customer financial records to determine whether a person is winning or losing, but said it does not use AI to target losing gamblers. He also argued that many customers lose money over time, so identifying customers as losers would not, in the company’s view, make them a useful target group. That is DraftKings’ position, not a finding by Louisiana regulators.
Kalani addressed the company’s responsible-gambling practices, including interventions for customers who may need help. The board’s required review of advertising compliance adds a separate check to the ongoing investigation of the AI allegations.
Louisiana’s review comes as regulators elsewhere are examining how sportsbooks use AI in marketing and customer targeting. ReadWrite has covered regulatory scrutiny of sportsbook AI marketing; the Louisiana board’s action, however, remains focused on its own investigation and does not establish that the allegations are true.
DraftKings must meet the board’s seven-day and 30-day deadlines while operating under the conditional permit. The investigation is still underway, and the next scheduled decision point is the full renewal hearing on February 18, one day before the extension expires.
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