DraftKings Set to Acquire Jackpocket for $750 Million
Date: 2024-02-16 Author: Dima Zakharov Categories: EVENTS
DraftKings to Acquire Jackpocket for $750m
In a strategic move aimed at expanding its market presence, DraftKings has announced its intention to acquire Jackpocket, a leading lottery app, for a whopping $750 million. This acquisition, expected to bring in an additional $340 million in revenue annually, signifies DraftKings' foray into the digital lottery vertical.
Cash Deal Strengthens DraftKings' Position
DraftKings will finance approximately 55% of the acquisition using its existing cash reserves, totaling $1.27 billion. This cash transaction underscores DraftKings' financial strength and its commitment to growth without the need for external funding.
Jackpocket's Market Dominance
Jackpocket, headquartered in New York City, boasts a strong presence in 18 US jurisdictions, offering customers a convenient platform to purchase official lottery tickets. The app's popularity surged in fiscal year 2023, outpacing its competitors by a significant margin.
Strategic Benefits for DraftKings
Beyond entering the lucrative digital lottery market, DraftKings aims to leverage Jackpocket's technology and brand to enhance its sportsbook and iGaming offerings. The acquisition is projected to drive substantial revenue growth and improve DraftKings' marketing efficiency.
Optimistic Revenue Projections
DraftKings anticipates significant revenue and EBITDA growth following the acquisition, with projections ranging from $260 million to $340 million in incremental revenue by fiscal year 2026. By fiscal year 2028, the company expects further revenue gains, reinforcing the long-term viability of the deal.
Excitement from Leadership
Jason Robins, DraftKings' CEO, expressed enthusiasm about the acquisition, emphasizing the value it brings to both customers and the company. Peter Sullivan, CEO of Jackpocket, echoed this sentiment, highlighting the potential for innovation and expansion in the digital lottery vertical.
Looking Ahead
With the acquisition of Jackpocket, DraftKings continues to strengthen its position in the competitive landscape of online gaming and betting. As the deal unfolds, industry analysts will closely monitor its impact on DraftKings' market share and financial performance.
