DraftKings Hits Lottery With Acquisition Of Jackpocket In $750M Deal

Written By Grant Lucas on February 29, 2024 - Last Updated on March 18, 2024
Image of two phones with logos of Jackpocket and DraftKings for story on DraftKings acquring the lottery app for $750 million

DraftKings was once a simple daily fantasy sports provider at the forefront of a boom that had yet to even begin. It grew into a legal sports betting power, then joining the iGaming scene starting with the New Jersey online casino landscape.

Now, the company has added lottery to its portfolio.

In a recent press release, DraftKings announced an agreement to acquire Jackpocket, considered the nation’s leader in third-party lottery courier services, for a whopping $750 million.

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

“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.”

Jackpocket acquisition will bolster already-strong DraftKings customer database

Many in New Jersey may already be familiar with the Jackpocket NJ lottery app. Through it, you can purchase tickets for draw games such as Mega Millions and Powerball without having to visit a New Jersey Lottery retailer.

By adding Jackpocket to its quiver, DraftKings estimates that the platform will generate $260 million to $340 million of incremental revenue, according to the press release, by fiscal year 2026.

“Together with DraftKings,” Jackpocket CEO Peter Sullivan said in the release, “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.”

That customer base is a sentiment also held by Robins. During a recent DraftKings earnings call, Robins noted that the “audience is massive” when it comes to the lottery. What’s more, he added, “it’s a very efficient way to acquire customers en masse at extraordinarily lower tax than what we see in other forms of online gaming.”

“So, if you look at kind of the playbook that’s worked for us, entering new states, having a built up database, having an active base of customers that we can cross sell, I think this is doubling down on that.”

Don’t expect Jackpocket to become DraftKings – yet

During the earnings call, Robins emphasized that the “current plan” remains for Jackpocket to maintain its own brand and app.

“I think they’ve built a strong audience and a good brand, and I think that we want to keep it,” Robins said, “but obviously we’re going to explore opportunities to integrate ecosystems, have all products available across all brands, just like we do with [Golden Nugget]. And I think, you know, Jackpocket has a casino that they – so there’s a lot to do there, I think, with their brand.”

Indeed, the Jackpocket NJ online casino went fully live in the Garden State earlier this month after quietly soft-launching in November with just under 200 titles available to players.

Robins said DraftKings will monitor how the Jackpocket brand “evolves over time.” For now, though, the two entities will remain apart.

Lottery a key factor for future DraftKings growth

As Robins said during the call, the Jackpocket app is not a new product. Rather, it represents “a way to strengthen” DraftKings’ core online sports betting platform and its online casino offering.

More important, Jackpocket provides DraftKings an avenue to enter the lottery market, which Robins expects to grow and bring in new customers. As Robins put it: “the gift that keeps on giving.”

“It’ll grow the lottery market, bring new customers in,” Robins said. “So, I think it’s a great opportunity to get a product, you know, potentially in the vast majority of US states.”

Photo by PlayNJ
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Grant Lucas

Grant Lucas is a longtime sportswriter who has covered high school, collegiate, and professional levels. A graduate of Linfield College in McMinnville, Grant now focuses his attention on the growing NJ online gambling and sports betting scene.

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