DraftKings Set to Acquire Jackpocket in a $750 Million Deal
DraftKings Inc. has announced a significant move into the digital lottery space with its planned acquisition of Jackpocket, the leading lottery app in the United States, for approximately $750 million. This strategic acquisition, payable in both cash and stock, is poised to not only grant DraftKings access to the burgeoning U.S. lottery industry but also to bolster its existing Sportsbook and iGaming ventures through enhanced customer engagement and acquisition strategies.
Strategic Expansion into Digital Lottery
The acquisition of Jackpocket, renowned for its proprietary technology and strong market presence, marks a pivotal step for DraftKings in diversifying its product offerings and tapping into the extensive U.S. lottery market.
Jason Robins, Co-founder and CEO of DraftKings, expressed enthusiasm for the venture, stating, “We are very excited to enter the rapidly growing U.S. digital lottery vertical with our acquisition of Jackpocket.” Robins emphasized the dual benefits of the acquisition: enriching the customer experience with new product offerings and achieving greater marketing efficiency.
Mutual Benefits and Enhanced Customer Value
Peter Sullivan, CEO of Jackpocket, echoed the sentiment of mutual advantage and customer value, envisioning the partnership as a significant leap forward in making lottery participation more convenient, enjoyable, and responsible. The integration with DraftKings is expected to significantly widen the scope of the digital lottery sector, leveraging DraftKings’ extensive footprint and mobile product prowess.
From a financial perspective, DraftKings anticipates that the acquisition will generate substantial incremental revenue and Adjusted EBITDA by 2026 and 2028, even without the introduction of new OSB and iGaming legislation in the U.S.
The merger agreement, approved by the Boards of Directors of both companies and Jackpocket’s stockholders, outlines a mix of cash and stock consideration, with a unique “collar” mechanism to ensure equitable value transfer based on DraftKings’ stock price at closing.
Commitment to Responsible Gaming
Central to this transaction is the shared commitment of DraftKings and Jackpocket to promote safe and responsible gaming. Both entities are aligned with the National Council on Problem Gambling, underlining their dedication to fostering a secure gaming environment through various responsible gaming tools and resources.
DraftKings’ acquisition of Jackpocket is not merely a financial transaction but a strategic expansion that aligns with the company’s growth trajectory and ethical standards. By entering the digital lottery space, DraftKings is set to offer a more diverse and engaging product lineup, while reinforcing its commitment to responsible gaming.
This move is expected to create significant value for stakeholders and contribute positively to the broader gaming ecosystem.
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