Massive Powerball jackpot means big boost for DraftKings

Powerball fever is spreading as the jackpot hits $1.7 billion — making it the third-largest prize in U.S. lottery history.

The enthusiasm for the gargantuan pot is fueling business on Jackpocket, a lottery courier owned by DraftKings and available in 16 states.

DraftKings said 15 million Powerball tickets have been ordered using Jackpocket during this Powerball run. Powerball ticket sales on the platform increased 130% day over day from Wednesday to Thursday this week. And sales on Wednesday alone increased 200% from the previous week.

Lotto.com and Jackpot.com also offer online lottery sales.

As of the most recent drawing on Sept. 3, no ticket had all five winning numbers. The jackpot rolled over and increased from an estimated $1.4 billion to this week's estimated $1.7 billion, or $770.3 million in a one-lump sum payout.

Customers purchase lottery tickets on the DraftKings app, and the courier fulfills the order, charging a fee on customer deposits that are used to purchase the tickets — a model not unlike Uber Eats for food delivery, for example.

Many states do not allow for online or courier sales of lottery tickets, however. This year, Texas banned Jackpocket and other couriers from operating after a scandal involving a group of lottery ticket buyers who reportedly spent $25 million on nearly every number combination possible to win a $95 million jackpot.

DraftKings CEO Jason Robins told CNBC back in May the ban was a disappointment, because the state of Texas could have contributed meaningfully to the growth of the business.

DraftKings forecasts Jackpocket will contribute between $260 million and $340 million in incremental revenue and between $60 million to $100 million in EBITDA by fiscal year 2026.

Robins has said the biggest return on the 2024 acquisition of Jackpocket is the ability to cross sell customers to the company's sports betting and iGaming offerings on the same platform.

As of Thursday, the rall odds of winning a prize in the Powerball drawing were 1 in 24.9, according to the lottery operator. The odds of winning the jackpot were just 1 in 292.2 million.