DraftKings to buy Jackpocket for $750M as expansion continues

The news on Thursday had competitors perk up their ears and listen intently. DraftKings, a well-established sports betting and iGaming company in the United States, had made a move for Jackpocket, a fast-expanding lottery app that has been grabbing headlines of late, turning lottery buffs in remote areas into millionaires through its one-stop-shop for tickets.

Yet, DraftKings is now determined to buy out the app outright, realizing its potential and tabling an offer that few would be able to resist. A total consideration of $750m has been put forward by the Massachusetts incorporated company, and at least 55% of this amount is payable in cash which will be funded directly out of the company’s balance sheet.

The other 45%, DraftKings says, will be payable in Company Class A common stock, which will have to undergo the customary purchase price adjustments. DraftKings CEO and Co-founder Jason Robins effused about the opportunity to be moving onto this new vertical and with a company that is packing a serious punch in the sector.

"We are very excited to enter the rapidly growing U.S. digital lottery vertical with our acquisition of Jackpocket," Robins noted speaking bout the road ahead. He noted that DraftKings and its customer base stand to benefit seriously from the new product, and also offer the company a chance to expand its product offer while driving synergies between its existing platforms and the new arrival.

"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," Robins added.

As the lottery continues to fascinate and grow across the United States, alongside sportsbook and iGaming, DraftKings is determined to make an early but noticeable entry, giving it a potential edge over rivals such as FanDuel or BetMGM. The sum total of the consideration, $750m is indeed difficult to resist and it shows the company’s determination to strike preemptively.

Jackpocket CEO Peter Sullivan was similarly excited about the opportunity such as it is. He hailed DraftKings’ existing infrastructure, arguing that it would be a great way to expand the digital lottery vertical and add momentum to it. Ultimately, by accepting the takeover bid from DraftKings, Jackpocket would be able to deliver on its core mission, Sullivan noted – "to create a more convenient, fun, and responsible way to take part in the lottery."

Image credit: Flick (WPT)