Louisiana’s gaming regulator postponed action on DraftKings’ five-year licence renewal on Oct. 15, issuing a conditional four-month permit instead while investigators examine concerns raised by reports about the company’s responsible-gambling practices, marketing and licensing paperwork.
The temporary approval allows DraftKings to continue operating while the Louisiana Gaming Control Board’s review proceeds. Its existing licence was due to expire Nov. 10, while a full renewal hearing is set for Feb. 18, 2027. The conditional extension runs through Feb. 19.
The board unanimously approved the shorter permit after the Louisiana State Police Gaming Enforcement Division said shareholders with stakes of at least 5% had not completed required suitability reviews. One shareholder’s request to be treated as an institutional investor also remained unresolved. Assistant Attorney General Delancey Houston said investigators needed more time to examine recent allegations involving the operator.
Under the conditions, DraftKings must submit suitability filings or institutional-investor petitions within 30 days, designate a senior representative to work with the board within seven days and comply with information requests during the temporary term. The company must also provide formal answers on artificial intelligence, prediction-market activity and its digital offerings to Louisiana residents, and certify that its marketing, commercials and online advertising comply with responsible-gambling rules.
The board described the decision as an oversight measure, rather than a finding that DraftKings had committed wrongdoing. Chairman Christopher Hebert said The New York Times’ reporting raised “very serious questions” and described ProPublica’s reporting as “very troubling.”
The New York Times had reported that DraftKings used machine learning and artificial intelligence to target promotions at losing bettors. Paul Liberman, DraftKings’ co-founder and president of operations, denied that claim, saying the company did not use AI to target losing gamblers.
ProPublica’s investigation tested DraftKings’ safeguards by having a reporter deliberately display behaviour associated with problem gambling. The reporter lost nearly $4,500 betting on tennis in 24 hours, then used the app’s responsible-gambling tools to set limits on time and spending. Within 30 minutes, he received the first of four promotional push notifications sent that day; the messages stopped only after he selected a more restrictive cool-off option.
The reporter was later made a DraftKings VIP after losing nearly $6,000 over three weeks. DraftKings chief responsible gaming officer Lori Kalani told the Louisiana board that the company had closed 175 Louisiana accounts during the year because of suspected problem gambling, though she said she did not know the operator’s total number of users in the state.
Louisiana health officials have said the number of residents believed to have gambling disorders has risen alongside online gambling and prediction-market sites. A state health official said during the summer that gambling addiction was among the department’s three leading priorities.
The Louisiana action forms part of wider regulatory attention to sportsbook safeguards. Maine, Massachusetts and Michigan regulators said they were reviewing issues involving AI and responsible gaming, while New York attorney-general investigators contacted former DraftKings employees over issues raised in the Times report. In Ohio, regulators proposed a 48-hour ban on direct sportsbook marketing after bettors enable or change responsible-gambling tools.
DraftKings and FanDuel also faced a proposed class action in Orleans Parish alleging that their apps were designed to exploit compulsive bettors. Neither company had been found liable.
