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.