DraftKings is diversifying into the lottery business with a $750 million deal to acquire Jackpocket.com.
The acquisition of the lottery reseller app will enable DraftKings to access and grow into the massive U.S. lottery industry while also strengthening its position in sportsbook and iGaming through cross-sell opportunities.
Approximately $412 million of the $750 million acquisition price will be payable in cash and the remainder in DraftKings shares.
“We are very excited to enter the rapidly growing U.S. digital lottery vertical with our acquisition of Jackpocket,” said Jason Robins, co-founder and CEO of DraftKings.
“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 transaction is expected to drive $260 million to $340 million of incremental revenue and $60 million to $100 million of incremental Adjusted EBITDA in fiscal year 2026.
The transaction has the support of the Boards of Directors of both of DraftKings and Jackpocket, as well as Jackpocket’s stockholders, and is expected to close by the second half of this year, subject to regulatory approvals and other customary closing conditions.
Jackpocket CEO Peter Sullivan 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.”
Jackpocket is currently live in 18 US jurisdictions, offering players online access to official state lottery games.
Shares in DraftKings Inc. (NASDAQ:DKNG) gained 1.32 per cent to close at $44.46 per share in New York Thursday, but were trading 3.26 per cent lower in after-hours trading at $43.01 per share.