DraftKings Deal Buys Jackpocket for $750M, Targets Lottery Sector

posted by Ioana
March 13, 2024

This DraftKings deal strikes a significant chord in iGaming, showing a remarkable evolution from its daily fantasy sports provider origins. Its latest move, the acquisition of Jackpocket for $750 million, marks DraftKings’ entry into the lottery sector. The Jackpocket NJ Lottery is a pioneer in online lottery courier services based in New Jersey and has expanded across 14 states and Washington, D.C.

Jason Robins, CEO of DraftKings, expressed his enthusiasm stating:

“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.”

DraftKings Deal Strengthens Customer Database with Jackpocket NJ Lottery Acquisition

The DraftKings Online Casino agreement significantly impacts the New Jersey market and extends its influence beyond the state. Especially with how the Jackpocket app NJ simplified the lottery ticket purchase process, which eliminates the need for physical store visits. This way, DraftKings anticipates this integration will boost its revenue significantly by 2026. 

The move into the lottery market with Jackpocket Lottery aims at also expanding DraftKings’ user base. This strategy is familiar to DraftKings, which has seen success in daily fantasy sports. Following the silent Jackpocket NJ launch last year, thisacquisition promises new products for customers and improved marketing efficiency. It also supports DraftKings’ goal to broaden its sports betting and iGaming portfolio, leveraging the lottery’s appeal for customer acquisition at reduced costs.

Jackpocket NJ Lottery Leads the Way in App Innovation

By enabling convenient app-based ticket purchases Jackpocket became a leading third-party lottery courier. The Jackpocket app NJ’s reach and growth is underscored by its expansion into 18 states. The list also includes New York, Texas, and Massachusetts.

Peter Sullivan, CEO of Jackpocket highlighted the collaboration with DraftKings as a way to enrich customer value and offer a responsible lottery experience:

“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.” thus

This move is key for entering new markets, with the potential for cross-selling to the existing customer base, reinforcing the Jackpocket Casino deal with DraftKings.

Jackpocket Continues as a Standalone Brand Post-DraftKings Deal

During an earnings call, Robins mentioned that Jackpocket would retain its brand and app. This approach aims to preserve Jackpocket’s strong audience while exploring integration opportunities, similar to the Golden Nugget strategy. Recently, the Jackpocket NJ online casino was fully launched in New Jersey. Robins is eager to observe the brand’s development while ensuring that DraftKings and Jackpocket operate independently for the foreseeable future.

“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.”

Jackpocket’s Strategic Role in Fueling DraftKings’ Expansion

Jackpocket’s performance in 2023 was outstanding. The $78 million in revenue and projected growth of 73% to $135 million in 2024 illustrates its huge potential. DraftKings highlighted the lower customer acquisition costs with Jackpocket, 80% less than its own. An analysis revealed that DraftKings customers using Jackpocket are 53% more valuable over their gaming lifetime. This emphasizes Jackpocket’s ability to attract valuable customers at lower costs, which is crucial for DraftKings’ expansion.

In conclusion, the DraftKings deal with Jackpocket for $750 million signifies a central moment in the digital lottery market. This acquisition strengthens DraftKings’ customer database but also marks its entry into a new market. With the innovative Jackpocket app NJ and strategic expansion, coupled with DraftKings’ expertise in sports betting and iGaming, this partnership promises to change the online lottery landscape. The journey of DraftKings, from a daily fantasy sports provider to an important player in the digital casino industry promises exciting prospects.

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