DraftKings co-founder tells Louisiana regulator that most customers lose money

DraftKings co-founder Paul Liberman sat before the Louisiana Gaming Control Board on Thursday and made an argument that was either reassuring or alarming depending on which side of the table you were on: most of our customers lose, he said, so targeting losers with AI promotions would not make commercial sense.

The board voted unanimously to extend DraftKings' Louisiana licence through February 19 rather than renew it outright. The licence was due to expire November 10. Chairman Chris Hebert was careful to say the conditional extension was not a finding of wrongdoing — regulators have used this mechanism before when investigations outlast licence terms — but the seven conditions attached to the extension tell their own story. A senior executive must be designated as a board liaison within seven days. Monthly compliance reports are due by the fifteenth of each month. Shareholder suitability documentation for at least one investor holding above five percent must be submitted within thirty days.

The shareholder question is, structurally, the simpler problem. One investor sought institutional-investor designation; the board has not yet determined whether that designation is warranted. That is a procedural gap that can be closed with paperwork.

The AI question is harder. What triggered Thursday's scrutiny was a New York Times report on DraftKings' promotional targeting systems, which allegedly identified customers showing signs of gambling harm and served them with offers anyway. No regulatory violation has been established. But Massachusetts has already convened its own inquiry, Michigan has joined it, and a class-action lawsuit has been filed in Massachusetts alleging the same basic conduct. Louisiana is now the fourth jurisdiction to formally ask DraftKings to account for how its systems work.

Liberman's defence — that the company targets all losers because almost all customers are losers — is actually a coherent rebuttal to the most specific version of the allegation. A system that maximises engagement across a losing population is not the same as a system that singles out the vulnerable. But it does not address the narrower claim that the AI distinguished between someone who lost forty dollars on a Sunday and someone who had maxed a credit card, displayed session-length anomalies, and self-reported distress. Those are two different profiles inside the same "losing customer" category, and the regulators asking questions clearly believe the distinction matters.

I think the consensus is underweighting how the Massachusetts and Michigan probes interact with the Louisiana timeline. The February 18 renewal hearing does not exist in isolation — it lands after two other state investigations have had months to develop findings, subpoena documents, and potentially share them. What Louisiana sees in February may be shaped by what Massachusetts has by then. DraftKings' legal team knows this. The conditional structure gives the company time to respond, but it also gives regulators time to coordinate.

Paul Liberman co-founded the company and is now its President of Operations. His presence at Thursday's hearing, rather than a compliance officer speaking alone, signals that DraftKings read the Louisiana board correctly: this required someone with institutional authority in the room. Whether that authority was enough to hold the February date without further escalation is what the next four months will determine.