Mobile sports betting operators are facing a deadline next month to answer a series of questions put to them by Massachusetts gaming regulators regarding their use of artificial intelligence and machine learning.
Dean Sherpa, executive director of the Massachusetts Gaming Commission (MGC), sent a letter to learn how each licensee uses AI in marketing, promotions, customer engagement, and assessment of problematic or addictive gambling behavior in its customers.
Serpa issued the letter, dated October 9, to each of the seven licensed mobile sports betting operators, with a deadline for answers by November 3. Operators must answer questions relating to eight specific operational categories, including general use of AI and machine learning.
Regulators want to know if the operators use AI, machine learning, algorithms, automated decision-making, or similar technologies in connection with marketing, promotions, or customer engagement.
If they do, the MGC requests they identify each system, model, algorithm, or tool used for these purposes and describe the purpose. Regulators also want to know which systems are developed internally or are provided by third-party vendors.
“Are these systems used to make decisions about individual patrons, groups, or segments of patrons, or both?” the five-page letter reads.
Other categories of questions include what data is used by systems, models, algorithms, or tools, how the system decides who receives marketing materials, and how the system determines what promotion a patron receives.
The MGC is also curious about how the system determines when and how often a patron receives marketing or promotional material, as well as behavioral targeting and optimization, responsible gaming or potential harm, and decision making and human oversight.
In his letter, Serpa also asked each operator if its systems can “trigger a promotion or marketing communication based on a patron’s recent betting activity, losses, deposits, or other account activity.”
The letter also asks each licensee if it uses a patron’s increased losses, increased frequency of wagering, or potentially harmful gambling behaviors as factors that make the patron more likely to receive a promotion.
If the answer is “no,” Serpa requested information on what controls are in place to prevent that from happening.
At its September 24 meeting, MGC Chairman Jordan Maynard said the Commission would begin evaluating each licensed sports betting operators’ use of AI and how it affects its Massachusetts customer base.
Maynard made the decision after a New York Times report alleging that DraftKings used AI and machine learning to intentionally target bettors who are most likely to lose.
“These technologies are evolving rapidly across our society, and we share the concern over their application,” Maynard said last month in announcing the decision.
