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🌈 Abstract

The article discusses DraftKings' plan to enhance its in-play betting offering by acquiring Simplebet, a company that provides micromarket pricing and content for sports betting. The proposed transaction aims to leverage Simplebet's proprietary machine learning (ML) models to create highly accurate betting opportunities during every moment of the game, improve the quality, breadth and speed of data throughout the DraftKings trading lifecycle, and unlock a faster and more frictionless experience for DraftKings' customers.

🙋 Q&A

[01] DraftKings' Acquisition of Simplebet

1. What are the key details of DraftKings' proposed acquisition of Simplebet?

• The proposed transaction has been approved by the boards of directors of both companies, but is subject to the receipt of required gaming regulatory approvals and other customary closing conditions.
• Simplebet provides micromarket pricing and content for sports betting, and its proprietary machine learning (ML) models will be incorporated into DraftKings' pricing and technology platform.
• This is expected to create highly accurate betting opportunities during every moment of the game, improve the quality, breadth and speed of data throughout the DraftKings trading lifecycle, and unlock a faster and more frictionless experience for DraftKings' customers.

2. How do DraftKings and Simplebet view the potential benefits of this acquisition?

• DraftKings sees live betting as an area for potential growth in online sports betting, and the proposed acquisition would allow them to leverage Simplebet's proprietary technology to create an enhanced in-play wagering experience.
• Simplebet's co-founder and CEO, Chris Bevilacqua, stated that the "transformative acquisition" will marry Simplebet's best-in-class AI and machine learning technology with the DraftKings product offering, enhancing the customer experience for a new era of real-time, in-play gaming.

[02] DraftKings' Recent Acquisitions and Performance

1. What other recent acquisitions has DraftKings made?

• About six months ago, DraftKings announced an agreement to acquire Jackpocket, a digital lottery app, with the expectation of significant overlap and cross-selling opportunities between the two companies.

2. How has DraftKings' financial performance been recently?

• DraftKings reported a revenue bump in the second quarter of 2022, primarily due to continued healthy customer engagement, efficient acquisition of new customers, expansion of its sportsbook product offering into new jurisdictions, higher structural sportsbook hold percentage, and the impact of the Jackpocket acquisition.
• DraftKings CEO Jason Robins stated that the company expects to continue capitalizing on the healthy customer acquisition environment for the rest of 2024, which positions them to achieve $900 million to $1 billion of adjusted EBITDA in 2025.