DraftKings announced on Thursday the completion of its acquisition of Jackpocket.
After agreeing to a $750 million deal in February, the terms of the agreement have been met. DraftKings sent just over $412 million to Jackpocket, and the remaining money will come in the form of common shares.
Jackpocket has built itself into one of the leading lottery courier services in the US, while also recently expanding into the online casino industry.
DraftKings is hoping to bring in hundreds of millions in revenue by 2026 through the deal. According to CEO and DraftKings Co-founder Jason Robbins in a press release, the company intends to act quickly on maximizing the Jackpocket relationship:
“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.”
DraftKings able to jump into new non-sports betting markets
Jackpocket is operational in 17 different states currently, as well as Washington D.C. and Puerto Rico.
The company is a lottery courier service that allows customers to purchase retail lottery tickets online.
DraftKings’ acquisition of Jackpocket allows it to enter the US lottery industry to complement its online sportsbook and casino. Jackpocket CEO Peter Sullivan commented on the new partnership in the press release:
“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.”
Jackpocket’s customer database will give DraftKings access to a lot of new customers.
Currently, DraftKings has either an online sportsbook or online casino in 10 states where Jackpocket already operates.
However, it also gives DraftKings access to states where sports betting and online casinos aren’t legal yet, like Minnesota and Texas.
Jackpocket online casino shows easy cross-sell opportunities
Jackpocket launched an online casino in New Jersey back in October. While it’s not seeing overwhelming revenue in its early stages, the operator did earn over $800,000 in gross gaming revenue in February. That was a 282% increase from January.
Active users are increasing as well, as the cross-sell ability of lottery and casinos has shown to be more successful than sports betting and casinos.
That was a key point that John Worthington, the VP of Interactive Gaming at Jackpocket, noted during an interview with Zero Latency: An Eilers & Krejcik Gaming Podcast:
“The big thing for us was making sure that it was very, very easy for customers to get from lottery to casino, and then vice versa, going back to lottery from casino, all while making both of those journeys really simple.”
With the Jackpocket takeover, DraftKings believes player acquisition will be much cheaper.
The company has stated that acquisition costs for a Jackpocket player are 80% lower than what it took for its own database. That has proven to be the case for Jackpocket’s casino venture in NJ.
As Worthington mentioned, the lottery customer tends to skew more female, as does the typical online casino player:
“Our customers tend to be a little bit more on the female side than traditional, so it’s been a nice blend to get them over to the casino side.”
Of the states where Jackpocket exists as a lottery courier, New Jersey and West Virginia also feature DraftKings Casino.
Photo by Frank Fiedler via Shutterstock
Graphics from Jackpocket and DraftKings
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