DraftKings leaps into US lottery market with Jackpocket acquisition

Lea Hogg February 16, 2024

SiGMA news

DraftKings leaps into US lottery market with Jackpocket acquisition

DraftKings has announced its expansion into the U.S. lottery market with the acquisition of Jackpocket, a mobile app that allows users to buy tickets for official state lottery games.

The deal, valued at $750 million, consists of $412 million in cash and the rest in DraftKings shares. It is expected to close in the second half of 2024, subject to regulatory approvals and other customary closing conditions.

By acquiring Jackpocket, DraftKings aims to tap into the huge potential of the U.S. lottery industry, which generated over $91 billion in sales in 2020, according to the North American Association of State and Provincial Lotteries. DraftKings also expects to benefit from cross-selling opportunities between its existing sportsbook and iGaming products and the new lottery offering.

Jackpocket, founded in 2013, is currently available in 18 U.S. jurisdictions, including New York, Texas, and New Jersey. The app allows users to securely order official state lottery tickets, check results, and claim prizes. Jackpocket also supports responsible gaming by offering spending limits, self-exclusion, and access to problem gambling resources.

DraftKings, founded in 2012, is one of the leading operators in the U.S. online sports betting and gaming market, with presence in 15 states and the District of Columbia. The company offers a variety of products, including daily fantasy sports, sportsbook, casino, and free-to-play games.

The acquisition of Jackpocket is the latest in a series of strategic moves by DraftKings to diversify its portfolio and enhance its competitive edge. In the past two years, DraftKings has also acquired sports betting platform provider SBTech, sports media company VSiN, and sports betting data provider Genius Sports.

CEO comment

Jason Robins, co-founder and CEO of DraftKings, (pictured above), said: “We are very excited to enter the rapidly growing U.S. digital lottery vertical with our acquisition of Jackpocket. 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.”

The acquisition is projected to generate $260 million to $340 million of additional revenue and $60 million to $100 million of additional Adjusted EBITDA for DraftKings in fiscal year 2026.

Peter Sullivan, CEO 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.”

Stop Press: the next SiGMA Eurasia Summit takes place in Dubai between 25 – 27 February!

The next SiGMA Africa Summit takes place in Cape Town between 11-13 March !