Entering a new market

DraftKings has reached a deal to acquire the online lottery ticket app Jackpocket in a deal worth $750m. The Boston-based company announced the agreement on Thursday, for which around 55% of the payment will be cash and the remainder stock.

the top US provider of digital lottery services with scalable and proprietary technology

The press release describes Jackpocket as the top US provider of digital lottery services with scalable and proprietary technology, a quality management team, and a strong brand. Both boards approved the deal, which will now need the relevant regulatory approvals to proceed.

DraftKings plans to dip its toes into the country’s lottery sector, as well as cement its position in the online casino and sports betting markets. According to the release, the firm believes the acquisition will help boost customer lifetime value thanks to the opportunities to cross-sell the customer bases.

Boosting efficiency

The US lottery market is a lucrative one, with nationwide lottery sales in the 2022 fiscal year hitting $108bn. DraftKings estimates the deal will create up to $340m in additional revenue in the 2026 fiscal year.

Jackpocket is currently available in more than 16 US jurisdictions, including New York, New Jersey, and Texas. It takes a cut of the deposits that users make into their accounts. Customers can digitally access their tickets through Jackpocket and winnings of less than $600 are credited to their account automatically. Meanwhile, those with bigger wins will receive physical tickets.

Commenting on the acquisition, DraftKings CEO Jason Robins said that the company is excited to become part of “the rapidly growing US digital lottery vertical.” He believes the move gives DraftKings customers another product to enjoy, as well as improving marketing efficiency in a similar way to how it leveraged its daily fantasy sports customer base when launching sportsbooks.

Jackpocket CEO Peter Sullivan also praised the agreement, saying that it will continue to make it more convenient and fun to buy lottery tickets in a responsible manner.

Strong results

DraftKings announced its Q4 2023 results on Thursday, with revenue rising 44% year-on-year to $1.2bn and its adjusted EBITDA at $151m. Monthly unique payers (MUP) were up 37% in Q4 2023, while average revenue per MUP increased by 6%. Net loss for the recent quarter dropped from $242.7m to $44.6m year-on-year.

mobile sportsbooks in 24 states and online casinos in five states

DraftKings is optimistic about the year ahead, upping its revenue forecast to $4.9bn from $4.65bn. The operator currently has mobile sportsbooks in 24 states and online casinos in five states, with further launches on the horizon. DraftKings’ share price finished the day up 1.3%.

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No commitment made

Commissioner Tick Segerblom has said that Clark County “never signed a contract” with Formula One for its November race in Las Vegas.

we never committed to three years, to my knowledge”

Speaking Thursday with the Las Vegas Review-Journal, Segerblom said: “It turns out we never signed a contract — that was all with the Las Vegas Convention and Visitors Authority (LVCVA). So everybody keeps saying that we’ve got three years. We never committed to three years, to my knowledge.”

Segerblom had intended to bring the issue up at a Tuesday meeting with the Board of Clark County Commissioners, but a Clark County spokeswoman has said it will be heard at a future meeting.

Each year until 2025, the LVCVA pays $6.5m to put on the F1 race with Liberty Media, the parent company of the F1. Notably, while Clark County approved the racing event for at least ten years, officials didn’t contractually agree for it to take place each year.

Lack of communication?

For the first race to go ahead, Formula One asked Clark County to pay half of the $80m to get the 3.8-mile race track ready.

F1 will have to take on the full brunt of the cost

However, it remains to be seen whether the county will pay the $40m. F1 has already paid the money for the infrastructure work, so if Clark County doesn’t pony up the rest, F1 will have to take on the full brunt of the cost.

Speaking on the matter, Segerblom said: “We haven’t agreed to anything.”

Even though they had to approve many of the plans, county commissioners feel as though they’ve been the last to find out what’s going on. Yet, according to Betsy Fretwell, Chief Operating Officer for the Las Vegas Grand Prix, they have worked closely with county officials as they work toward the 2024 race.

Lost revenue

The November race will continue to remain a hot topic for all concerned. The main concern for local businesses is the potential loss of millions of dollars, similar to what they say happened in 2023. Last year, a group of nine businesses approached the LVCVA seeking reimbursement of an estimated $23m it claims to have lost in revenue.

The nine companies want the LVCVA to establish the recovery fund over claims that vehicular and foot traffic nosedived over six months because of multiple road closures and entrance blockages.

With businesses allegedly seeing a decline of over 50% in their usual revenue during the 2023 race, companies could continue to feel skeptical about the 2024 Las Vegas Grand Prix.

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