Simplebet Rumored To Be Latest DraftKings Acquisition Target

DraftKings has been busy lately. Its focus on mergers and acquisitions seems to be in overdrive, with new rumors surfacing of a potential buyout of Simplebet.

Simplebet launched its first product with FanDuel in an effort to build a successful micro-market sports betting. DraftKings took notice, partnering with, and buying into, the company a year later.

A Friday morning report by Earnings + More, citing unidentified sources, suggests that DraftKings may be looking to acquire the rest of Simplebet. This move is seen as an effort by DraftKings to enhance its same-game parlay offerings, a popular form of betting that allows users to combine multiple bets from the same game into a single wager, as well as its micro-betting product.

The rumored acquisition deal is said to be valued between $120 million and $170 million. However, the sources told Earnings + More that the final price depends on certain milestones, including financial achievements and earnouts.  

DraftKings, which recently reported $1.1 billion in revenue for the first quarter of 2024, already owns a 15% stake in the company. It’s reportedly responsible for 60% of Simplebet’s turnover.

Simplebet carves out its niche

Simplebet, co-founded in 2018, has been at the forefront of micro-betting, a betting format that allows users to place wagers on individual moments within a sporting event. This could include betting on the outcome of a single pitch in baseball, a free throw in basketball, or a specific play in football.

Simplebet’s technology uses machine learning and automation to create these micro-betting opportunities in real-time.

The technology has been integrated into the offerings of 12 operators across North America, including DraftKings, Caesars, and others. Simplebet has also partnered with Arkansas’ BetSaracen and Ontario’s theScore Bet to expand its reach.

Simplebet’s innovative approach to in-play betting has led to significant growth, according to a recent company update. It reported seven million bets placed during the early part of the baseball season alone.

The company’s success is not limited to baseball; it has seen impressive year-over-year growth across multiple sports, indicating a strong market presence and consumer interest. Its live markets are now available in 27 states, according to the company.

DraftKings in purchase mode

If the Simplebet deal goes through, it will follow DraftKings’ recent acquisition of Sports IQ, a provider of odds-making and player prop technologies. Sports IQ is known for its advanced algorithms and machine learning capabilities that generate unique betting lines across hundreds of markets.

The acquisition of Sports IQ further demonstrates DraftKings’ commitment to expanding its product offerings and staying ahead in the competitive sports betting space. It also shows DraftKings’ willingness to spend on valuable targets, with the deal reportedly worth between $50 million and $70 million.

This strategy is further underscored by DraftKings’ announcement of the completion of its $750 million acquisition of Jackpocket, a leading digital lottery app in the U.S. The integration of Jackpocket is expected to bolster DraftKings’ position in the lottery vertical while also enhancing customer acquisition and lifetime value.

DraftKings anticipates that the Jackpocket acquisition will contribute significantly to its financials, with an expected adjusted EBITDA of $60 million to $100 million starting in 2026.