DraftKings Makes a $750 Million Gamble on Jackpocket
Date: 2024-02-20 Author: Dima Zakharov Categories: EVENTS
DraftKings' Bold Move
DraftKings, a major player in the gaming industry, made headlines last Friday with its bold move to acquire the lottery app Jackpocket for a whopping $750 million. This move, while promising significant revenue potential for DraftKings, has raised eyebrows among industry experts due to its hefty price tag.
Evaluating the Acquisition
Ed Birkin, a senior analyst at H2 Gambling Capital, views the acquisition as a positive step for DraftKings, providing diversification and potential market growth. However, there are concerns regarding the competitiveness of the lottery market in the US, where progress has been slow in legalizing online lottery products.
Risks and Rewards
While the acquisition presents opportunities, it's not without risks. Potential competition from state lottery online channels could pose challenges, and there's a possibility of state lotteries banning courier services like Jackpocket to protect their own sales channels.
Financial Performance
In addition to the acquisition news, DraftKings' fourth-quarter results showcased improvements, with a notable decrease in operating losses compared to the previous year. Despite challenges, Birkin remains optimistic about DraftKings' trajectory towards profitability, especially with a focus on online gaming growth.
Path to Profitability
DraftKings' journey towards profitability hinges on continued growth in online gaming. With strategic acquisitions and a strong position in the sports betting market, DraftKings aims to accelerate its path to profitability, with investors eagerly anticipating further developments in the online gaming sector.
