On the heels of signing LeBron James as a brand ambassador at the start of February, DraftKings garnered headlines Thursday by reaching an agreement in principle to acquire digital lottery provider Jackpocket.
The $750 million cash-and-stock deal will enable DraftKings to gain access to the nation’s massive lottery market, while creating value through cross-selling opportunities with its Online Sports Betting (OSB) and iGaming products, the company noted in a statement. DraftKings will fund the purchase with approximately 55% in cash from the company’s balance sheet, with the remaining 45% of the consideration payable in the company's Class A common stock. The purchase will not require a capital raise, DraftKings said in a statement.
Hours later, DraftKings CEO Jason Robins noted that he views Jackpocket in a similar vein to the company’s daily fantasy sports products, which existed long before the Supreme Court’s historic PASPA decision. While Jackpocket, the nation’s leading digital lottery app, might not drive top-line growth, Robins sees it as an opportunity to bring in new customers through the “natural overlap” of its current audience.
“I think as more time goes on and more states continue to launch OSB and iGaming, it will be the gift that keeps on giving,” Robins told analysts on the company’s 2023 fourth-quarter earnings call.