DraftKings CEO draws DFS customer acquisition comparisons to Jackpocket
Jason Robins says lottery courier app will give operator a helping hand in states yet to legalise OSB and igaming as he notes firm won’t drive “massive top-line growth”
DraftKings CEO Jason Robins said praised Jackpocket’s DFS-style customer acquisition capabilities after penning a $750m deal to acquire the lottery courier app.
The cash-plus-stock deal, which is due to complete in H2, will see the Boston-based firm expand into the growing US lottery space.
In comments on an analyst call following the release of the firm’s Q4 results, Robins was bullish on the addition of the brand into the DraftKings stable.
As detailed in an investor deck, DraftKings noted Jackpocket’s customer acquisition cost was around 80% lower than DraftKings, while there was a “significant customer overlap” between the two firms.
The lottery firm is live in 16 US states, plus Puerto Rico and Washington, DC, with Robins singling out Texas as a key battleground where the addition of Jackpocket could support DraftKings.
Texas, the US’ second most-populus state, has yet to legalize online sports betting (OSB) or igaming, but has been a welcome home for Jackpocket.
In Robins’ remarks, he noted Jackpocket could serve the same role as DraftKings’ historic DFS offering in giving the operator a running start on the competition when states open up for OSB and igaming.
He said: “This is just like DFS has been for us. We have this built-in customer base. We know that tons of people around the nation play lottery. The great thing about this, unlike OSB and igaming, is you don’t need legislative action in order to get a digital lottery courier launch.
“I think it is a great opportunity to get a product potentially in the vast majority of US states. I think as time goes on, more and more states will continue to launch OSB and igaming, and then [Jackpocket] will be the gift that keeps on giving,” he added.
Robins also highlighted that Jackpocket would not just provide DraftKings with an avenue in new states but also fundamentally drive the customer acquisition costs down.
The CEO continued: “DFS is a nice little product; makes money for us. But it is not something that is going to drive massive top-line growth. That’s really OSB and igaming. [DFS] is more of a vehicle to be able to continue to acquire customers and engage customers in states that don’t have [OSB and igaming] yet.
“Jackpocket, much like DFS, will do the same thing. I think in states where we do have OSB and igaming, it will provide us with another vehicle to acquire [customers] cheaply.
“If you look at where a lot of customer acquisition happens now, it’s during these big moments. Whether that is the Super Bowl or March Madness, it is those big tentpole moments.
“Jackpocket creates more of those mass cheap customer acquisition opportunities during the year. It could be at any time.
“It could be in the middle of August when there’s suddenly a $1bn jackpot and we’re the only ones who are able to acquire in mass right before the NFL season. It’s those type of advantages that you’re going to see really pay off over time,” Robins concluded.