DraftKings Finalizes $750 Million Acquisition of Jackpocket

In a strategic move, DraftKings is set to acquire the lottery app Jackpocket for $750 million, anticipating an annual revenue boost of up to $340 million.

Allocating approximately 55% of the acquisition cost from its balance sheet in cash, DraftKings emphasizes no need for additional capital raising.

The decision follows Q4 results revealing $1.27 billion in current cash assets, prompting an upward adjustment of the fiscal year 2024 revenue guidance to potentially reach $4.9 billion.

Jackpocket, a leading player in the market, facilitates the purchase of official lottery tickets across 18 US jurisdictions, including prominent states like New York, Texas, and Ohio.

The New York City-based app boasts nine times more downloads than its closest digital lottery app competitor in fiscal year 2023.

DraftKings envisions the deal as an entry into the US digital lottery sector and a reinforcement of its position in sportsbook and igaming, enhancing customer lifetime value.

Jason Robins, DraftKings Co-founder and CEO, expressed enthusiasm about the acquisition, stating, "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."

The proposed transaction is anticipated to yield $260-$340 million in incremental revenue and $60-$100 million in incremental adjusted EBITDA in fiscal year 2026.

By fiscal year 2028, DraftKings foresees $350-$450 million in incremental revenue and $100-$150 million in incremental adjusted EBITDA.

Jackpocket's scalable technology, strong brand, and proficient management team have contributed to its success since its founding in 2013.

Peter Sullivan, CEO of Jackpocket, believes the partnership with DraftKings will bring substantial value to their customer base, fostering a more convenient and enjoyable lottery experience.

This move comes after DraftKings' unsuccessful bid for PointsBet and the recent announcement of a multi-year sports betting partnership with Barstool Sports.