Jackpocket’s Surge In iCasino Revenue Sparks Interest

In a landscape where online gambling continues to evolve, the recent surge in revenue for Jackpocket’s iCasino operations has sparked significant interest. It has also raised questions about the interplay between iLottery and iCasino and will serve as a catalyst for further iLottery exploration by operators.

Jackpocket is a mobile app-based lottery service that allows users to purchase tickets directly from their smartphones. Founded in 2013 by Peter Sullivan, it aimed to modernize lottery ticket purchasing while ensuring compliance with state lottery regulations.

The original concept behind Jackpocket, which operaters as a lottery courier in New Jersey and New York among 18 jurisdictions in total, is simple. Users browse available lottery games, select their numbers, and purchase tickets through the app. Jackpocket then buys the tickets on the user’s behalf. The purchased tickets are securely stored, and users receive notifications of their ticket numbers and any winnings.

Lottery becomes a springboard

From its start as a lottery courier service, the company continued to grow. Then, in 2022, it began preparing for a launch of its iGaming operations in New Jersey through a deal with Caesars Interactive Entertainment. Finally, in November of last year, it began introducing its first iCasino products in the state.

Then, this past February and only three months after its soft launch, Jackpocket reported $802,000 in gross gaming revenue (GGR). This surge was a fourfold increase from January 2024 and a fivefold increase from December 2023, according to Eilers & Krejcik Gaming’s (EKG) U.S. Online Casino Monitor for March. As the Powerball jackpot soars to $1.23 billion for April 6, the jump also emphasizes the dramatic draw lottery products offer.

Despite being relatively small compared to established brands in the state’s online casino market, Jackpocket’s February GGR outpaced several others. This achievement is notable, considering that Jackpocket’s share of the New Jersey online casino GGR stood at approximately 0.5%.

The leap in revenue can be attributed to strategic initiatives undertaken by Jackpocket, as EKG highlights in its report. Toward the end of January, the brand began implementing cross-selling tactics by integrating a casino into its lottery courier app.

This integration was coupled with targeted push notifications, bonuses and other add-ons specifically tailored for lottery players. Moreover, Jackpocket’s marketing efforts further bolstered its visibility and attracted new users.

Jackpocket also capitalized on the popularity of lottery jackpots, leveraging them to draw customers into its core product. EKG reported that a substantial 70% of casino sign-ups were cross-sold from the lottery courier service. The remaining 30% stemmed from organic growth. Incentives such as deposit matches played a role in attracting customers. However, the performance underscores the potential of cross-selling between lottery and casino products.

DraftKings sees the future

EKG sees Jackpocket’s performance as a significant indicator of the viability of cross-selling between lottery courier and online casino platforms. This strategy was a primary motivation behind DraftKings’ pending acquisition of Jackpocket for $750 million. DraftKings has agreed to pay 10 times what Jackpocket earned in 2023 to consummate the acquisition, which is expected to close in the second half of 2024.

Moreover, Jackpocket’s unique demographics, particularly its higher proportion of female customers compared to traditional online casinos, suggest the potential for higher hold rates, as females tend to gravitate toward slot games that typically hold at a higher rate. With a focus on slots and live casino games, Jackpocket caters to a different audience segment. This significantly expands the reach of iCasino platforms beyond traditional gaming players.

Jackpocket’s lottery courier service is available in Arizona, Arkansas, Colorado, Idaho, Massachusetts, Minnesota, Montana, Nebraska, New Hampshire, New Jersey, New Mexico, New York, Ohio, Oregon, Puerto Rico, Texas, D.C., and West Virginia. As iGaming continues to slowly find new ground across the U.S., amid a wave of resistance, this existing footprint will give the company ample room for online gaming growth.