- DraftKings has acquired online lottery provider Jackpocket.com.
- The announced value of the acquisition is $750 million USD.
- State lotteries are one of the few winners in the dysfunctional US sports betting ecosystem.
DraftKings is expanding its portfolio into the lottery sector with a strategic $750 million acquisition of Jackpocket.com. This move positions DraftKings to tap into the extensive U.S. lottery market, enhancing its existing sportsbook and iGaming services with potential cross-selling opportunities.
The transaction details include a payment of approximately $412 million in cash, with the balance to be settled in shares of DraftKings.
Jason Robins, co-founder and CEO of DraftKings, expressed enthusiasm about the acquisition:
“We are very excited to enter the rapidly growing U.S. digital lottery vertical with our acquisition of Jackpocket. This transaction will create significant value for DraftKings not only by giving our customers another differentiated product to enjoy but also by improving our overall marketing efficiency similar to how our daily fantasy sports database created an advantage for DraftKings in OSB and iGaming.”
DraftKings anticipates the deal will generate an additional $260 million to $340 million in revenue and an incremental Adjusted EBITDA of $60 million to $100 million by the fiscal year 2026.
The agreement has received approval from the boards of both DraftKings and Jackpocket, as well as the endorsement of Jackpocket’s shareholders. Completion of the deal is anticipated in the latter half of this year, pending regulatory consent and fulfillment of standard closing prerequisites.
Peter Sullivan, CEO of Jackpocket, remarked on the merger:
“Together with DraftKings, we will be able to bring tremendous value to our customer base as we advance our mission to create a more convenient, fun, and responsible way to take part in the lottery. DraftKings’ broad footprint and exceptional mobile products present an opportunity to meaningfully expand the digital lottery vertical, and we could not be more excited to come together with DraftKings.”
Currently, Jackpocket operates in 18 U.S. jurisdictions, providing digital access to official state lottery games.
Following the announcement, DraftKings Inc. (NASDAQ:DKNG) shares saw a 1.32% increase, closing at $44.46 in New York on Thursday. However, in after-hours trading, shares dipped by 3.26%, landing at $43.01 per share.
