DraftKings Louisiana license gets temporary extension

The Louisiana Gaming Control Board (LGCB) voted on 15 October to keep the DraftKings Louisiana license on a temporary basis until 19 February 2027 and withhold a full renewal while investigators review allegations about the operator’s use of artificial intelligence (AI) and its responsible gambling practices, according to Gaming America.

The DraftKings Louisiana license decision

The board met on 15 October to consider the renewal application for the sports wagering platform provider permit of DK Crown Holdings, Inc., which trades as DraftKings, according to the meeting agenda. The board voted to issue a temporary license until 19 February and did not grant a full renewal, Gaming America reported. The full renewal hearing is scheduled for 18 February.

Regulators also cited an unresolved shareholder suitability issue involving holders of 5% or more of DraftKings shares, Gaming America reported.

LGCB Chairman Christopher Hebert told DraftKings representatives at the meeting that “a news report, or news reports, plural, are not findings of regulatory violations”, according to Gaming America. He said the proposal “is not a determination that DraftKings has engaged in any wrongdoing” and called it “a measured regulatory response that allows us as a board to fulfill our oversight responsibilities”.

Conditions for DraftKings

Gaming America listed the main conditions the board set for the conditional renewal:

• Suitability filings within 30 days, including petitions to have the outstanding shareholder treated as an institutional holder.
• Formal responses on AI use, prediction market activity and digital audits of Louisiana residents within 30 days of each board request.
• A certified review of responsible gambling compliance in marketing, commercials and digital ads within 30 days.
• Monthly compliance reports on the 15th of each month, covering prediction markets, new products, geolocation, KYC and AML, responsible gambling systems, complaints, litigation and corrective actions.
• A senior representative named for board communications within seven days.

Prediction markets are also the subject of a separate dispute between a state regulator and the CFTC, covered in our report on the Nevada regulator’s challenge to CFTC rules.

The AI allegations

One set of allegations comes from a proposed class action filed on 30 September in the US District Court in Massachusetts by Daniel Vest, of West Virginia, Boston.com reported. The suit alleges DraftKings uses AI to identify vulnerable gamblers and target them with promotions, incentives and advertisements. Vest says he received at least 70 emails, texts or notifications from DraftKings in the month before 25 September. He asks the court to award damages to the class, order refunds and stop DraftKings from using AI to encourage vulnerable users to keep gambling.

A DraftKings spokesperson told Boston.com the company “does not use AI to target customers based on losses” and said “nor do we use AI to target customers based on indicators of potential problem gaming.”

At the LGCB meeting, Paul Liberman, identified by Gaming America as DraftKings’ President of Operations and co-founder, said “we’re an entertainment platform” and argued that “identifying a losing gambler doesn’t necessarily make sense in that context”. Lori Kalani, identified as Chief Responsible Gaming Officer, said “It does us no good to have people who are gambling out of control”.

Gaming America also reported that Massachusetts is investigating DraftKings’ AI use.

Next steps

DraftKings has seven days from the 15 October meeting to name a senior contact for the board and 30 days for its suitability filings and marketing compliance review. The LGCB’s full renewal hearing on 18 February 2027 comes one day before the temporary license ends. Our iGaming regulation coverage follows state decisions on US operators.