Last week, DraftKings made a significant move by finalizing its acquisition of Jackpocket, the leading digital lottery app in the United States. This strategic acquisition could potentially reshape the lottery industry, particularly in states like Pennsylvania, where Jackpocketing is not yet permitted.
Jackpocket CEO Peter Sullivan expressed his optimism about the acquisition, stating, “The completion of this acquisition marks a promising new chapter for both Jackpocket and DraftKings. Together, we are confident that we can further our mission of supporting lottery beneficiaries by boosting revenue.” This mutual benefit underscores the potential success of the partnership.
Last February, DraftKings announced the acquisition of the Santa Barbara-based software company for $750 million, marking its entry into the lottery industry. At the time, industry executives praised the transaction as a watershed event for the US iGaming industry.
With the acquisition of Jackpocket, draftKings anticipates a significant boost in its financial performance. It expects to generate between $260 million and $340 million in incremental revenue in the fiscal year 2026, with an additional $60 million to $100 million in incremental Adjusted EBITDA. These projections are based on the assumption that there will be no major changes in online gambling or sports betting.
These financial projections will likely improve for fiscal year 2028, with $350 million to $450 million in additional sales and $100 million to $150 million in additional Adjusted EBITDA.
Jackpocketing is Not Legal in Pennsylvania. However, it may be helpful if it is Licensed
Pennsylvania, like a few other states, offers its online lottery. Players in the Keystone State can participate in the PA iLottery using their PCs and mobile devices.
Jackpocketing is currently illegal in the state (but it is legal in 19 other states). That’s because Jackpocket is not an online lottery game. It operates as a lottery courier in 13 legal jurisdictions in the United States, delivering lawfully purchased lottery tickets to its consumers.
Additionally, as an online platform, JackPocket provides real-time results, analytical tools, and jackpot information, allowing players to engage more and stay connected to the lottery community. And now that the sale to DraftKings is complete, Jackpocket’s profile will undoubtedly rise even further. The DraftKings Pennsylvania sportsbook is ranked second in the state.
In terms of the lottery, even states with existing iLottery programs, such as Pennsylvania, can benefit from a courier service.
According to a report published by Spectrum Gaming Group last July, the two have a mutually advantageous connection. Both entities benefit from following a standard set of best practices. So far, couriers like Jackpocket have proven to be essential resources for state lotteries in increasing overall sales. In a single day, Jackpocket accounted for 15% of total draw game sales in New York.
As more people participate in lottery games, courier services help reach those in more rural areas who would otherwise be unable to use these services. Pennsylvanians could gain from more access to lottery items, while the Commonwealth would benefit from higher sales.
Jackpocket Runs in 19 States and Regions
The Jackpocket is part of the highly competitive US online lottery business, attracting significant investment as more states permit online sports betting and iGaming.
Jackpocket has expanded into 19 states and jurisdictions in less than a decade. Undoubtedly, finance from significant investment firms contributed significantly to the company’s growth. It has also received endorsements from celebrities such as Kevin Hart and millionaire Mark Cuban.
To date, Jackpocket has raised more than $220 million. The journey, however, has sometimes been complex. It has taken a lot of effort to persuade state legislators to amend the regulations to allow third-party smartphone apps to purchase tickets for players.
However, Jackpocket revolutionized and improved the lottery experience in places where the restrictions were removed. Its innovative gameplay has captivated millions of players.
Consumer buying tendencies suggest that lottery courier services like Jackpocket will continue to grow across the United States. By the end of 2024, Jackpocket is expected to be operating in more than half of US lottery markets.
Responsible Gaming is the Agreement’s Main Focus
DraftKings, upon the completion of the Jackpocket acquisition, reiterated its commitment to ‘stewarding safe and responsible play’ as its top priority. It also emphasized the alignment of its principles with Jackpocket’s, both being members of the National Council on Problem Gaming.
Spending limitations will be available to assist gamers in staying on track. In addition, self-exclusion alternatives and easy access to problem-gambling solutions will be available.
According to its website, Jackpocket aims to offer a more convenient, enjoyable, and responsible lottery-playing experience. In a February news release, DraftKings stated:
“The purchase would allow them to enter and expand within the vast US lottery sector. But, more crucially, strengthen its position in Sportsbook and iGaming by increasing customer lifetime value.”