Louisiana Regulators Delay Full DraftKings License Renewal Over AI Concerns
The Louisiana Gaming Control Board has delayed full renewal of DraftKings' sports betting permit, voting unanimously to grant a conditional four-month extension through February 19 while regulators continue investigating the company's use of artificial intelligence and the suitability of some of its shareholders.
A full renewal hearing is now scheduled for February 18.
Assistant Attorney General Delancey Houston told the board that the Louisiana State Police Gaming Enforcement Division recently found that certain shareholders holding 5% or more of DraftKings had not submitted the required suitability paperwork.
Houston said the investigation into that issue, along with recent allegations about the company's practices, was incomplete and that more time was needed before the division could complete its review.
Seven Conditions Attached To The Extension
Much of the board's questioning centered on a New York Times report alleging DraftKings uses artificial intelligence to identify bettors who are losing money and target them with promotions, and on how the operator responds when customers show signs of a gambling problem.
DraftKings disputed that characterization at the hearing: company president of operations Paul Liberman said the firm can use financial records to see whether a customer is winning or losing, but said it does not use AI to specifically target losing gamblers, arguing that most customers lose money over time, which would make the practice an ineffective way to pick out a useful group.
The conditional license carries seven requirements, including filing all outstanding suitability submissions or petitions for institutional-investor treatment within 30 days, and submitting formal written responses on AI use, prediction-market activity and Louisiana digital offerings within the same window.
DraftKings must also review and certify that its marketing materials and digital ads comply with responsible-gambling rules, and name a senior representative to handle board communications within seven days.
Board chairman Chris Hebert said the action is not a finding of wrongdoing but a measured use of the board's oversight role, as DraftKings continues to expand its U.S. footprint through moves such as its Golden Nugget Online Gaming acquisition.
Current License Expires In November
DraftKings' existing Louisiana sports betting site license was due to expire on November 10, making the conditional extension necessary to keep the operator running in the state while the investigation continues.
Board members also questioned DraftKings Chief Responsible Gaming Officer Lori Kalani during the hearing, with much of the discussion focused on how the company identifies and responds to customers who show signs of a gambling problem.
Board chairman Chris Hebert said news reports alone do not establish a regulatory violation, but that the board still has a duty to examine issues that could affect gaming integrity and consumer protection, which is why the extension carries active reporting obligations rather than a simple rubber-stamp renewal.
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