DraftKings Secures Jackpocket in $750M Strategic Buyout

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00:00 Now, we did get this word on Jackpocket.

00:03 DraftKings acquired them for $750 million.

00:08 iGaming, of course, is the focus here.

00:10 A lot of states want to legalize iGaming.

00:12 And it kind of feels like, you know,

00:14 when DraftKings and FanDuel started,

00:16 it was interesting, Sam, with the DFS,

00:18 we felt like, ah, well, eventually,

00:19 there's going to be sports betting,

00:20 and then they're going to have a sports book.

00:21 Now it's like iGaming is the next thing

00:23 that's not legal in some places,

00:26 but we all sort of feel like it will be.

00:28 And therefore, the acquisitions are happening

00:30 from all of the companies, realizing soon,

00:32 you're going to be able to bet on this.

00:33 So let's go ahead and get our footprint in on it.

00:36 - Yeah, 100%.

00:39 This is sort of an example of,

00:42 there's no more states legalizing iGaming this year,

00:44 probably, said it's a very small percent chance.

00:48 Even next year, it'll be tough to have more in.

00:51 I think there's about six states that have iGaming.

00:53 So what companies like DraftKings are doing

00:55 in the meantime is preparing for when they do,

00:57 making these acquisitions, these investments.

01:00 DraftKings didn't have the best end to the year financially.

01:03 They missed on earnings just a little bit,

01:05 thanks to some football games in November

01:09 that didn't really go their way, which is pretty unusual.

01:12 And a lot of other sports books felt that as well.

01:14 But sort of what they've done here is kind of like,

01:16 okay, we see that that didn't go that well.

01:19 We're going to come out and have this other news

01:21 that overshadows it, which is the acquisition of JackPocket.

01:24 They're paying $750 million for this company,

01:28 which obviously no small fee,

01:30 half of that will be in DraftKings stock.

01:31 But this is like the biggest online lottery retail app

01:36 that exists in America.

01:40 The lottery market is about $100 billion, give or take,

01:43 including scratch-offs and everything.

01:45 And they account for about 30% of that,

01:47 according to most Wall Street estimates,

01:49 which is no small number, obviously.

01:51 So the fact that DraftKings is then gaining,

01:54 not only this entry into iGaming in newer states

01:58 that haven't legalized it yet,

01:59 they're also gaining this whole customer base

02:02 where they're going to have the DraftKings brand

02:04 in front of them.

02:05 And then obviously make a ton of money off of lottery tickets

02:08 'cause you make a lot more money.

02:11 I hope I'm not shocking anyone with breaking news,

02:14 but you make a lot more money

02:15 off of being a lottery ticket seller

02:17 than you do as a sports book,

02:19 where you can have unfavorable outcomes, things like that.

02:21 And it's been interesting to hear DraftKings talk

02:23 about sort of the potential,

02:25 different ways they can use it.

02:26 To your point, they compared it to Daily Fantasy Sports.

02:30 Before sports betting was legal,

02:32 DraftKings was the Daily Fantasy Sports brand,

02:34 and that's what people knew it as.

02:35 But this app is available in a lot of states

02:38 like Texas, Minnesota, where there is no sports betting yet.

02:41 So they're able to use JackPocket in these states,

02:44 be in the DraftKings database,

02:46 and then eventually, whenever Minnesota,

02:48 Texas legalized sports betting,

02:49 DraftKings will already have their information

02:51 and know a lot about the customer's habits as well.

02:54 The data is so important.

02:55 So it's a pretty big deal from that standpoint,

02:58 not just on iGaming,

02:59 but on kind of the future of sports betting

03:02 and everything as well.

03:03 So it'd be cool to see what more collaboration they do

03:07 tech-wise with what's going on in the app.

03:10 CEO Jason Robbins has kind of mentioned that a little bit.

03:13 Maybe that's on the table in the future, we'll have to see.

03:14 But as of right now,

03:16 they're probably just gonna be focused on

03:18 flipping these customers into DraftKings

03:20 and making money off of a very lucrative app.

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