DraftKings Expands Reach with $750M Acquisition of Jackpocket

DraftKings Inc. has finalized an agreement to purchase Jackpocket, the prominent US lottery app, for a staggering $750 million. 

DraftKings’ Partnership with Jackpocket Signals Entry into US Lottery Industry

The deal, structured with approximately 55% cash and 45% stock components, underscores DraftKings’ strategic maneuver to tap into the vast potential of the US lottery industry. With Jackpocket’s robust technology and seasoned management team, DraftKings aims not only to bolster its foothold in lottery services but also to fortify its position in sports betting and online gaming, fostering enhanced customer engagement and revenue streams.

Jason Robins, co-founder and CEO of DraftKings, expressed enthusiasm about the acquisition, stating: “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.”

Peter Sullivan, CEO of Jackpocket, echoed Robins’ sentiments, highlighting the synergies between the two entities and the potential for mutual growth. 

“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,” Sullivan remarked.

DraftKings Projects Revenue Surge with Entry into Lottery Market

Financial projections accompanying the acquisition paint a rosy picture for DraftKings, with expected incremental revenue ranging from $260 million to $450 million by fiscal years 2026 and 2028, respectively. These figures, however, hinge on regulatory landscapes remaining unchanged in the US for sports betting and online gaming.

The merger agreement, greenlit by both DraftKings and Jackpocket boards, marks a significant milestone in the companies’ trajectories. Jackpocket, recognized as the first licensed third-party lottery app in the US, has carved a niche for itself in multiple states, including Ohio and West Virginia.

DraftKings’ foray into the lottery realm comes at a time when the sports betting market is witnessing exponential growth, with new players such as ESPN Bet trying to get a piece of the pie of the competitive but at the same time lucrative sports betting market in the US.

Additionally, DraftKings recently inked a multi-year sports betting media partnership with Barstool Sports, following the end of the Super Bowl. The partnership will kick off with a free-throw challenge involving various Barstool personalities, offering viewers a chance to win from a $100,000 prize pool.