Massachusetts Probes Sportsbooks Over AI Promotions

Written by: Jonathan Rodriguez
Published: Fri Oct 16, 2026, 11:00 am ET
Read Time: 4 minutes

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The Massachusetts Gaming Commission (MGC) is investigating how licensed sportsbooks use artificial intelligence (AI) and machine learning to target promotional offers.
Regulators want to know whether these systems consider customers' losses, betting activity, and potential gambling-related risks.
In a letter dated October 9, MGC Executive Director Dean Serpa asked all seven licensed mobile sports betting operators to explain their practices. The five-page questionnaire contains more than 70 questions and sub-questions across eight categories. Operators have until November 3 to submit written responses.
The inquiry could shape future rules governing AI-driven marketing across the US online sportsbooks industry. However, the commission has not announced any findings of misconduct against operators.
Massachusetts Regulators Examine AI Marketing Practices
The questionnaire covers a broad range of technologies, including algorithms, predictive analytics, profiling, and automated decision-making. The MGC's definition also includes systems that combine automated recommendations with human oversight.
Operators must identify the systems they use for marketing, promotions, and customer engagement. They must also explain whether they developed those tools internally or obtained them from third-party vendors.
Additionally, the commission wants to know whether these systems recommend offers to marketing teams or send promotions automatically. Operators must identify who holds ultimate responsibility for deciding how they use AI.
Questionnaire Targets Customer Data and Promotional Decisions
One key section examines the customer information that algorithms use to determine who receives marketing materials. The MGC asks whether systems consider betting frequency, wager amounts, deposits, withdrawals, session duration, and promotional history.
Crucially, regulators specifically ask whether operators use customers' net losses when making marketing decisions. They also want to know whether increased spending, more frequent wagering, or sudden behavioral changes influence promotional eligibility.
The questionnaire then examines how systems select individual offers. For example, AI might determine whether a customer receives a bonus bet, odds boost, deposit match, free bet, or parlay promotion.
Regulators also ask whether algorithms determine the value of an offer or personalize it for individual customers. Another section examines the timing and frequency of promotions, including whether recent betting activity or losses can trigger new marketing messages.
The MGC also wants operators to explain how they optimize campaigns. Questions address whether systems predict customers' likelihood of wagering, returning to a platform, depositing additional funds, or responding to particular incentives.
Responsible Gambling Rules Under Scrutiny
The questionnaire devotes a separate category to responsible gambling and potential harm. Regulators ask whether operators test their marketing models to determine if they could encourage excessive wagering or contribute to addictive behavior.
Massachusetts already restricts operators from using patron data through AI, machine learning, or algorithms when they know, or reasonably should expect, those practices could make their platforms more addictive.
The state's existing rules also require operators to report periodically on their use of customer data to promote responsible gambling.
The MGC now wants to understand how sportsbooks apply these safeguards in practice. Regulators ask whether gambling-risk indicators influence promotional eligibility and whether increased losses or other potentially harmful behaviors can make customers more likely to receive offers.
Conversely, the commission asks whether those indicators can cause systems to reduce, modify, or prohibit marketing. Operators must also describe safeguards that prevent harmful behavioral patterns from influencing promotional decisions.
These questions place consumer protection at the center of the Massachusetts gambling inquiry. They also seek to establish whether operators evaluate the potential consequences of automated marketing decisions before deploying their systems.
Human Oversight and Next Steps
The questionnaire also examines accountability and human oversight. The MGC asks whether employees can override AI recommendations and understand why a system selected a particular customer or promotion.
Operators must explain whether they keep records of the factors behind individual marketing decisions. The commission wants to know whether a sportsbook could identify why a specific customer received a particular offer on a particular date.
The request is voluntary, and the MGC says it will keep responses confidential under applicable state law. The commission intends to use the information to help develop policy concerning AI.
DraftKings Report Adds Context to the Investigation
The inquiry follows a September directive from MGC Chair Jordan Maynard to examine operators' use of AI and machine learning.
The review gained attention after a New York Times investigation alleged that DraftKings used these technologies to identify customers likely to lose money. The report raised questions about whether personalized promotions could encourage those customers to continue betting.
DraftKings has denied targeting customers based on their losses or indicators of potential problem gambling. The MGC's questionnaire extends beyond DraftKings to cover all seven licensed mobile operators.
Massachusetts is also part of a broader national debate over AI-driven sportsbook marketing. New York's gaming regulator has proposed restrictions on AI-personalized promotions, reflecting similar concerns about consumer protection and potentially harmful gambling behavior.
The Massachusetts commission has not announced new restrictions resulting from its inquiry. Instead, operators' responses could help regulators determine whether existing safeguards are sufficient or additional measures are needed.
As sports betting companies expand their use of automated marketing, Massachusetts regulators are seeking greater transparency into how these systems operate.
Their findings could influence future oversight of promotional targeting and responsible gambling across the wider US market.
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