PA Could Benefit Now That DraftKings Has Finalized Purchase Of Jackpocket

Written By Rashid Mohamed on May 28, 2024
Powerball lottery on a screen in a store in Pennsylvania. Though Jackpocket isn't legal in Pennsylvania, if it is licensed it would drive lottery revenue and increase accessibility for players.

Late last week, DraftKings announced the completion of its acquisition of Jackpocket, the leading digital lottery app in the United States. While Jackpocket is not, yet, legal in Pennsylvania, becoming licensed could enhance the state’s bottom line.

“The completion of the acquisition represents an exciting new chapter for Jackpocket and DraftKings alike,” said Jackpocket CEO, Peter Sullivan in a press release. “Together we are confident that we will be even more capable of helping lotteries fulfill their mission of delivering revenue back to the beneficiaries they support.”

DraftKings made the leap into the lottery vertical last February by initiating the take-over of the Santa Barbara-based software company for $750 million.

At that time, industry leaders hailed the deal as a defining moment for the US iGaming sector.

DraftKings anticipates a return of between $260 million and $340 million for its 2026 fiscal year in incremental revenue. A further $60 million to $100 million in incremental Adjusted EBITDA is foreseen — given no significant changes in online gambling and sports betting occur.

These financial estimates are expected to increase for its fiscal year 2028, with $350 million to $450 million of incremental revenue and $100 million to $150 million of incremental Adjusted EBITDA.

Jackpocket isn’t legal in Pennsylvania, but could be beneficial if it is licensed

Like a few other states, Pennsylvania has its own online lottery. Players in the Keystone State can play the PA iLottery on their computers as well as their mobile devices.

Jackpocket is currently not legal in the state (though it is operating legally, in some fashion, in 19 other states). That’s because Jackpocket technically isn’t an online lottery game.

In 13 of the US regions where it is legal, it acts as a lottery courier sending out legally-purchased lottery tickets to its customers.

Also, as an online platform, JackPocket offers real-time results, analytical tools, and jackpot information, which allows players to engage more and stay connected with the lottery community.

And, now that the sale is complete with DraftKings it is bound to raise Jackpocket’s profile even more. The DraftKings PA sportsbook is ranked second in the state.

As for the lottery part of the puzzle, even states like Pennsylvania that already have an iLottery program can benefit from a courier service.

According to a report authored by Spectrum Gaming Group last July, the two are in a mutually beneficial relationship. Both entities become stronger if they operate within a shared set of best practices.

So far, couriers like Jackpocket are proving to be a valuable resource for state lotteries in growing overall sales. In New York, Jackpocket was responsible for 15% of all draw game sales in a single day.

And as more and more people engage in lottery play, courier services are helping reach people in more remote locations who typically face barriers to these services.

Pennsylvanians could benefit from the increased access to lottery products and the Commonwealth would benefit from increased sales.

Jackpocket operates in 19 states and jurisdictions

Jackpocket is part of the increasingly-competitive US online lottery market which is pulling in a lot of investment as more states move to legalize online sports betting and iGaming.

In just over a decade, Jackpocket has expanded into 19 states and jurisdictions. The company undoubtedly owes a sizable share of its success to the financing from major investment firms. It has also had endorsements from celebrities like Kevin Hart and billionaire Mark Cuban.

To date, Jackpocket has raised upwards of $220 million.

The path, however, hasn’t always been easy. It’s taken a lot of work to convince state legislators to change laws to allow for third-party mobile apps to buy tickets for players.

But in states where the impediments were removed, Jackpocket has transformed and enhanced the lottery experience. It has attracted millions of players with its new way of playing.

Consumer spending habits indicate that lottery courier services like Jackpocket will continue to expand across the US. It is estimated Jackpocket will be operational in more than 50% of US lottery markets by the end of 2024.

Responsible gambling a top priority of the deal

In its announcement that the Jackpocket deal had closed, DraftKings said its “top priority is stewarding safe and responsible play.” It also added that its values align with Jackpocket since both belong to the National Council on Problem Gaming.

To help players stay on track, spending limits will be on offer. As well, there will be self-exclusion options and access to readily available problem gambling resources.

According to its website, Jackpocket’s mission is to create a more convenient, fun, and responsible way to play the lottery.

In a February press release, DraftKings said:

“The purchase would enable them to access and grow into the massive US lottery industry. But more importantly, strengthen its position in Sportsbook and iGaming through higher customer lifetime value.”

Photo by Keith Srakocic / AP Photo
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Rashid Mohamed

Rashid Mohamed is a freelance news reporter covering sports, sports betting, gambling laws, and casino business for Catena Media. He writes for a number of sites including PlayPennsylvania, NCSharp, PlayTexas, PlayCA, and PlayOhio.

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