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DraftKings to acquire Jackpocket for $750m

| By Richard Mulligan
DraftKings is to acquire lottery app Jackpocket for $750m (€696.7m/£596.0m) in a deal expected to generate up to $340m in additional revenue annually.
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DraftKings will pay around 55% of the purchase price in cash from its balance sheet with no capital raise required.

The deal comes as Draftkings noted in its Q4 results that it had current cash assets of $1.27bn. It also raised its fiscal year 2024 revenue guidance to a range of up to $4.9bn following a strong end to 2023.

draftkings will pay around 55% of the purchase price in cash

Market leader Jackpocket is designed to offers customers a route to ordering official lottery tickets in multiple states. It is currently available in 18 US jurisdictions, including New York, Texas and Ohio.

The New York City-headquartered business claims that its app was downloaded nine times more than its closest competitor in the digital lottery app category in fiscal year 2023.

DraftKings said the proposed transaction will enable it to access and grow into the US lottery industry. However, it said it was more important that the addition of Jackpocket would strengthen its position in sportsbook and igaming through higher customer lifetime value.

jackpocket claims its app was downloaded nine times more than its closer competitor in 2023

“We are very excited to enter the rapidly growing US digital lottery vertical with our acquisition of Jackpocket,” said Jason Robins, co-founder and chief executive of DraftKings.

“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 similar to how our daily fantasy sports database created an advantage for DraftKings in OSB and igaming.”

Deal will “expand digital lottery vertical”

DraftKings said it expects the proposed transaction to drive $260m-$340m of incremental revenue and $60m-$100m of incremental adjusted EBITDA in fiscal year 2026.

It also expects the acquisition to drive $350m-$450m of incremental revenue and $100m-$150m of incremental adjusted EBITDA in fiscal year 2028.

Draftkings expects the transaction to Drive $260m-$340m of incremental revenue and $60m-$100m of incremental Adjusted EBITDA

DraftKings said Jackpocket, which was founded in 2013, offers “highly-scalable technology, a strong brand and an outstanding founder-led management team”.

Peter Sullivan, chief executive of Jackpocket, said: “Together with DraftKings, we will be able to bring tremendous value to our customer base as we advance our mission to create a more convenient, fun and responsible way to take part in the lottery.

“DraftKings’ broad footprint and exceptional mobile products present an opportunity to meaningfully expand the digital lottery vertical and we could not be more excited to come together with DraftKings.”

DraftKings last year lost out to Fanatics in the race to acquire PointsBet. Earlier this month, DraftKings announced details of a new a multi-year sports betting partnership with Barstool Sports. Under the agreement, DraftKings is now the official sports betting partner of Barstool.

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