DraftKings said to be eyeing Simplebet acquisition

DraftKings seems to be hitting its stride with the company now eyeing an acquisition in the micro-betting market with Simplebet, a company that uses machine learning and automation to make "every moment in sport count."

Rumors are swirling that the NASDAQ-listed company is making a yet undisclosed play for the micro-betting platform on the tail of a $750m acquisition of another asset, Jackpocket, which has allowed DraftKings to break ground into the lottery market and position it as one of the leading digital ticket vendors.

Simplebet provides a vast selection of micro-betting markets, from MLB to NFL, to NBA, to both NCAAF and NCAAB. Although no official confirmation has come from either company, the price tag of the deal is rumored to be around $210m. Other sources have cited the price tag at a much lower tally at anything between $120m to $170m.

No official confirmation has come for either. The move is not without precedent, as DraftKings already has a multi-year partnership with the company, and it controls a 15% stake in it.

Yet, DraftKings’ appetite for alternative verticals and products has been only growing in recent months, with the company seeking to diversify away from pure sports betting and deeming the iGaming sector to be moving a touch too slowly, allowing the company to expand into other markets, such as micro-betting and lottery ticket sales.

The rumors about the potential acquisition come from Earnings + More, which was the first company to break the news, citing sources familiar with the matter who chose to remain anonymous.

The timing of this new rumored acquisition is interesting, as DraftKings has only completely Jackpocket’s acquisition, and announced another takeover bid for Sports IQ Analytics, a company that offers analytical solutions and data for sports betting companies, and specifically focuses on helping companies fix lines for prop bets.

Through Simplebet, DraftKings will significantly strengthen its technological nous and wield a full-stack project that allows it to innovate and strengthen its capabilities. Yet, the companies would also have to tread carefully as it has been burning through a lot of cash. Competitors such as BetMGM and FanDuel have been somewhat more guarded in the way they choose to spend money.

Meanwhile, DraftKings’ stock took a tumble earlier this week after a new tax betting law in Illinois was floated, with the proposal possibly bringing the tax rate to 40%.

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