DraftKings completes $750M acquisition of Jackpocket, begins integrating lottery app into its operations

DraftKings has completed its previously announced acquisition of lottery app Jackpocket for a total consideration of approximately $750 million. The company first announced the deal in February, saying it expected the lottery app to generate up to $340 million in additional revenue annually.  

With the acquisition now complete, DraftKings said it is now focused on integrating Jackpocket into its operations and leveraging synergies to drive sustained growth and value creation. The group is looking to tap into the expansive US lottery vertical, while also adding to its existing offering. This, the company said, would enhance customer lifetime value and bolster customer acquisition capabilities.

Jason Robins

Jason Robins, CEO and Co-founder of DraftKings, said: "Today we are announcing the completion of our acquisition of Jackpocket and the commencement of our value creation plan. We are well-prepared to quickly launch cross-sell programs, further improve customer acquisition efficiency, and continue to innovate and differentiate with our overall product portfolio for our customers."

"We look forward to continuing to deliver enhanced value to our customers and shareholders as we integrate Jackpocket into the DraftKings ecosystem," he further added.

Peter Sullivan

For his part, Peter Sullivan, CEO of Jackpocket, added: "The completion of the acquisition represents an exciting new chapter for Jackpocket and DraftKings alike. Together, we are confident that we will be even more capable of helping lotteries fulfill their mission of delivering revenue back to the beneficiaries they support."

"DraftKings’ proven reach and cutting-edge mobile platforms will continue to allow us to drive growth and innovation in the digital lottery vertical," he noted.

Jackpocket, founded in 2013, 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 expects the proposed transaction to drive $260 million - $340 million of incremental revenue and $60 million - $100 million of incremental adjusted EBITDA in fiscal year 2026. It also expects the acquisition to drive $350 million - $450 million of incremental revenue and $100 million - $150 million of incremental adjusted EBITDA in fiscal year 2028. 

The company's acquisition announcement in February came just as it raised its 2024 financial forecast. It has since raised that forecast again following an "outstanding" start to 2024. Revenue grew 53% to $1.17 billion in the first quarter of the year, marking an increase of $405 million from the $770 million reported during the same period last year.

Following the positive first quarter results, the sports betting operator raised its fiscal year 2024 revenue guidance to a range of $4.8 - $5 billion from the previous range of $4.65 - $4.90 billion, which it had announced in February. The updated 2024 revenue guidance range equates to year-over-year growth of 31% to 36%.

It also increased its Adjusted EBITDA forecast to $460-$540 million compared to earlier guidance of $410-$510 million.

Following the launch of its sportsbook product in North Carolina on March 11, 2024, DraftKings is live with mobile sports betting in 25 states while its iGaming products are available in 5 states. Outside of the US, the company operates its sportsbook and iGaming products in Ontario, Canada, and is preparing to launch its Sportsbook product in Puerto Rico.