DraftKings Goes All In With $750M Jackpocket Purchase, But Will the Gamble Pay Off?

A recent article from Gambling Insider detailed DraftKings' $750 million acquisition of lottery app Jackpocket and its latest earnings results. The deal signals DraftKings' continued expansion into new betting verticals beyond sports, while its earnings paint an increasingly optimistic profitability outlook.

DraftKings' Jackpocket Purchase Carries Risks and Rewards

DraftKings' acquisition of Jackpocket for $750 million allows the sports betting giant to enter the lottery vertical, adding projected revenues of $340 million per year (as cited from the original article). However, industry experts note the high price paid for Jackpocket and the risks if states crack down on lottery couriers to protect their online lottery channels, as with Ventura24 in Spain.

On the positive side, the purchase provides DraftKings product diversification and access to significant market growth if more states legalize online lottery sales. Additionally, Jackpocket has partnered with state lotteries in New Jersey while maintaining its independent courier model. Only time will tell if DraftKings' high-priced bet will pay off.

Earnings Show Improving Profitability Trajectory

In the same earnings announcement, DraftKings continued demonstrating a path toward profitability - a critical milestone for investor confidence. While DraftKings still posted a Q4 net loss of $43.8 million, this marked a significant improvement from a $232.2 million loss in Q4 2021 (as cited from the original article).

DraftKings also grew its sports betting net win market share substantially year-over-year. As the initial article reported, net win share indicates genuine growth rather than short-term promotions temporarily boosting betting handles. According to one industry analyst, this share gain drives "long-term sustainability and profitability."

Further expansion in DraftKings' online casino product could accelerate its profitability timeline. With early state launches and the recent GNOG acquisition, DraftKings looks well on its way.

DraftKings' net solid revenue growth and strategic technology investments paint an increasingly positive picture. If the trajectory continues, profitability likely lies around the corner.