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DraftKings yesterday plunked down a $750 million bet that a lottery app will help it win the fierce battle for customers in its own core business, Axios' Pete Gannon writes.
Catch up fast: The sports-betting giant said yesterday it would buy Jackpocket, a company that allows users to buy state lottery tickets from their phones.
In one sense the rationale is simple — DraftKings can branch into the massive U.S. lottery industry.
But "more importantly" (its words), the deal is about acquiring customers cheaply, who will drive increased value on DraftKings' sportsbook and iGaming business.
What they're saying: "It's a very efficient way to acquire customers in mass," DraftKings CEO Jason Robins said on a conference call about the deal. "And we know from overlap analysis that those customers will cross-sell very effectively" to higher spend on DraftKings' core businesses.
Zoom in: Customer lifetime value is an important metric in the online gaming industry, as is the cost of winning new customers.
By increasing the first metric and lowering the second, DraftKings believes it's made a very good bet.
