Sports betting company DraftKings Inc DKNG recently reported fourth-quarter financial results and increased guidance for 2024.
Along with the announced financial results, DraftKings announced the acquisition of digital lottery company Jackpocket and recently announced a partnership with leading sports media company Barstool Sports.
Barstool Sports, Partnerships: Barstool Sports founder Dave Portnoy recently re-acquired the company from PENN Entertainment PENN. The move came after Penn announced a licensing deal with The Walt Disney Company DIS to launch ESPN Bet.
Barstool Sports had to wait a certain period of time, which turned out to be the end of the 2023 NFL season before they could enter into a partnership with a different sports betting company.
Barstool Sports announced shortly after Super Bowl LVIII that they were partnering with DraftKings, a company they previously worked with.
DraftKings CEO Jason Robins is excited about the return of Barstool Sports and DraftKings.
"Getting the band together in some ways," Robins told Benzinga. "Really excited to be working with Barstool."
Robins said that thanks to working with Barstool in the past, DraftKings has a ton of data on how they can expect customer acquisition from the sports media company and what results will drive with their audience.
"Really excited about it."
Robins said Barstool Sports did a great job of helping DraftKings acquire new customers previously.
Along with the Barstool Sports partnership, Robins is also excited about a recent deal signed with NBA superstar LeBron James. The partnership will see James share NFL picks and promote the DraftKings sportsbook.
"That's a big one."
Robins told Benzinga that DraftKings is committed to forging partnerships with media entities and athletes that are poised to enhance the company’s growth and deliver shareholder value. He emphasized that their marketing strategy is selective, focusing on collaborations that offer tangible benefits, as evidenced by analytical data, rather than pursuing deals out of necessity.
Related Link: Dave Portnoy Is The Only ‘Natural Owner’ For Barstool Sports Long-Term, Says PENN CEO: ‘This Is A Win-Win-Win’
Jackpocket Acquisition: Another potential win for customer acquisition for DraftKings could be its recently announced Jackpocket acquisition.
Robins highlighted that Jackpocket’s appeal, particularly during large jackpots, mirrors the excitement of Super Bowls, attracting a surge of users and interest. This dynamic could serve to diversify DraftKings’ portfolio, distributing major events more evenly across the sports calendar and effectively balancing the seasonal nature of sports betting.
According to DraftKings, Jackpocket is the number one U.S. lottery app in a sector that is growing 15x faster than the broad U.S. lottery.
Jackpocket also has low customer acquisition costs and high value of its customers. DraftKings has a proven track record of cross-selling customers between its online sports betting, iGaming and daily fantasy sports and the addition of Jackpocket could complement past success.
The deal is expected to close in the second half of 2024. Post-acquisition, Robins indicated that DraftKings will update its guidance and the immediate financial implications in the subsequent quarterly report. Additionally, the company has outlined the expected revenue and EBITDA impact for 2026 stemming from this acquisition.
DKNG Price Action: DraftKings shares trade at $41.03 versus a 52-week trading range of $17.02 to $45.62.
Photo: DraftKings
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
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