DraftKings is trying to bounce back after a tough summer. On Wednesday, the sports gambling company agreed to buy Simplebet, which focuses on live-event betting. This deal aims to make betting easier for customers, and DraftKings said it will add Simplebet’s systems to its own.
“Live betting represents an area for potential growth for online sports betting, and the proposed acquisition would allow DraftKings to leverage Simplebet’s proprietary technology to create an in-play wagering experience that moves at the speed of sports,” said Corey Gottlieb, DraftKings’ chief product officer.
Founded in 2018, Simplebet provides microbetting data on major U.S. sports leagues. With the rising popularity of microbetting, DraftKings hopes to speed up and enhance the quality of in-game bets.
Legal Challenges and Recent Developments
This announcement comes during a week when the NFLPA sued DraftKings for breach of contract, claiming the company failed to honor a $65 million deal. DraftKings shut down its NFT marketplace in July “due to recent legal developments.” The week before, the company sold VSiN, a gambling content channel, back to Musburger Media after purchasing it for $70 million in 2021.
DraftKings is also dealing with a class action lawsuit in a Massachusetts court from NFT buyers, who allege the company’s NFT marketplace violated securities laws. The judge refused to dismiss the case.
Competitor Comparisons and Financial Outlook
DraftKings removed a gambling surcharge in high-tax states after its competitor, FanDuel, decided not to do the same. FanDuel recently exceeded analysts’ expectations during its earnings call and has been performing well, while DraftKings is selling off assets and dealing with lawsuits.
On August 2, DraftKings reported a rise in revenue for Q2 2024, mainly due to strong customer acquisition, customer engagement, and the expansion of its sportsbook to new locations. At that time, even before acquiring Simplebet (though the deal was already being planned), CEO Jason Robins predicted an adjusted EBITDA of $900 million to $1 billion in 2025, based on the growth seen in 2024 so far.
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