Louisiana delays DraftKings license renewal amid AI, shareholder scrutiny
Regulators will hold a full renewal hearing in February as they investigate AI targeting allegations and shareholder suitability.
BATON ROUGE — The Louisiana Gaming Control Board has delayed a full renewal of DraftKings' sports betting license until February while it investigates allegations about the company's use of artificial intelligence and the suitability of some shareholders.
The board voted unanimously to conditionally extend the license until Feb. 19, 2027, with a full renewal hearing scheduled for Feb. 18.
Assistant Attorney General Delancey Houston said the Louisiana State Police Gaming Enforcement Division found that certain shareholders holding at least 5% of the company had not completed suitability checks.
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"The investigation is incomplete at this time," Houston said. "The division also has some concerns about the recent allegations brought against DraftKings and therefore additional time is needed for the division to fully investigate those allegations."
Board members questioned DraftKings co-founder and President of Operations Paul Liberman and Chief Responsible Gaming Officer Lori Kalani about a New York Times report alleging the company uses AI to target losing bettors.
"We do not use AI in any way to target losing gamblers by any means," Liberman said.
LGCB Chairman Chris Hebert stressed that the delay does not mean DraftKings has engaged in wrongdoing.
"This proposal is not a determination that DraftKings has engaged in any wrongdoing. Rather it is a measured regulatory response that allows us as a Board to fulfill our oversight responsibility," Hebert said.
The conditional license includes seven conditions DraftKings must meet within 30 days.
These include submitting outstanding shareholder paperwork, responding to questions about AI and prediction markets, and certifying compliance with responsible gambling advertising requirements.
The developments add to growing regulatory scrutiny following the Times report.
Massachusetts sent more than 70 AI-related questions to licensed sportsbooks last week, while regulators in Michigan and Maine have also begun examining the concerns.
Separately, a WIRED investigation identified more than $600 million in suspicious trading across two election markets on the offshore prediction platform Polymarket.
Analysis found that over 98% of more than 38,000 trading loops generated no profit or loss, suggesting possible "activity farming" to inflate trading volume.
Polymarket told WIRED it had flagged and investigated the activity and blocked the accounts involved.
Taiwan has blocked access to Kalshi and Coinbase's prediction market platforms amid suspicions they facilitated illegal election wagering ahead of local elections.
Entain reported a 2% year-over-year increase in group net gaming revenue for the third quarter, supported by growth in the U.K. and Ireland.
Online net gaming revenue in Brazil declined 36%, which Entain called a "challenging market" before the country's provisional online gambling ban took effect.
CEO Stella David told analysts she expects the market to reopen and said Entain is preparing for different outcomes.
Professional gambler Shane Hennen has pleaded guilty to charges related to the NBA and NCAA betting scandals, including bribery and point-shaving.
Hennen faces a combined statutory maximum of 125 years in prison across two cases, with sentencing scheduled for Feb. 25, 2027.