DraftKings completed the previously announced acquisition of North American Lottery App Jackpocket for $750m. (EUR696.7m/PS596.0m).
DraftKings announced that it would purchase Jackpocket by February 2024. The company said at the time that the app’s addition would bring in up to $340 million annually.
DraftKings has stated that it will now focus on integrating Jackpocket and using synergies in order to sustain growth. It is also looking to expand its current offering. It said that this would increase customer lifetime value, and boost customer acquisition abilities.
Jason Robins is the chief executive of DraftKings and co-founder. He said: “Today, we announce the completion of the acquisition of Jackpocket as well as the beginning of our plan for value creation.” We are ready to launch cross-sell programs, improve the efficiency of customer acquisition and innovate our product offering for our customers.
Ed Birkin is a senior analyst with H2 Gambling Capital. He has examined the transaction in detail. He said that on the surface, the deal could have been viewed positively, as it would provide diversification and the potential for market growth. It also provided another channel to acquire customers.
Jackpocketing growth will be driven by DraftKings
Jackpocket, the market leader in this space, is designed to give customers an easy way to order official lottery tickets across multiple states. The service is available across 18 US states, including New York and Texas.
In fiscal 2023, the New York-based company claims that its app has been downloaded nine times as many downloads than its nearest competitor.
Peter Sullivan said, “The acquisition marks a new exciting chapter in the history of Jackpocket.” Together, we’re confident we can help lotteries fulfill their mission to return revenue to beneficiaries.
DraftKings has a proven track record of success and innovative mobile platforms that will allow it to continue driving growth in the digital lotto vertical.
Start strong in 2024
DraftKings announced in February that it would be acquiring Jackpocket at the same time as they raised their financial forecast for 2024. Since then, it has raised its forecast after a “outstanding start” to 2024. The revenue of $1.18bn in Q1 ended 31 March is more than 50% higher than the $769.7m reported for 2023.
The revenue is expected to be between $4.80bn-$5.00bn. This represents an increase from $4.65bn-4.90bn. It would be a growth between 31,0% and 36% on an annual basis.
The adjusted EBITDA is expected to be between $460m-$540m, as opposed to $410m-$550m earlier.
DraftKings now offers mobile sports betting across 25 states, following the launch of its North Carolina service in March. These markets collectively represent about 49.0% US population.
