DraftKings Moves into Lottery Market With Massive Jackpocket Takeover Deal
Online casino and sports betting behemoth DraftKings have acquired Jackpocket, the lottery app, in a massive $750 million deal as part of efforts to make a concerted move into the field and did so on the same day they released their very promising fourth quarter and end of year revenue results for 2023.
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The deal to buy Jackpocket has left many confounded by the price that DraftKings paid, and the maths behind the acquisition really will leave many more than a little confused.
They may have forked out $750 million in the deal, but they stand to make around $340 million in additional revenue per year, which clearly looks like a great bit of business.
On the deal, senior analyst at H2 Gambling Capital, Ed Birkin, commented
“On the face of it, I think it could be viewed as a positive acquisition, providing diversification, scope for significant market growth and another customer acquisition channel.”
“Ilottery has been painfully slow in the US in terms of states legalising it – and at some point, this has to change – which means that lottery couriers will potentially be competing against official state lottery online channels.”
“This can be done successfully, as Jackpocket has shown in New Jersey, but it’s a significant potential competitor in each market, and that’s a best-case scenario of a state launching their own ilottery.” Birkin added.
His points on diversification are important, and clearly, DraftKings are keen to put their eggs into a number of baskets, but the additional qualms about the slow regulatory change in relation to the internet lottery field are worth noting.
Seemingly, all moves in the gambling and gaming fields move slowly. One only has to look at the length of time it takes relevant paths to legalize online casino and sportsbook action to get an idea of just how glacial the pace of change can be.
The move into the lottery sphere is a logical step to take, and DraftKings CEO Jason Robins commented on the company’s push to broaden its scope.
“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,”
More than half of Americans have bought into the lottery market, quite literally, with more than 50% of the country bought a lottery ticket in the past three years, and some estimates put the value of the lottery market at a hefty $100 billion, and therefore any moves into the market would be sensible, not least by a company that already has rich links to similar markets and pastimes, such as DraftKings.
