DraftKings Considering Possible Purchase of Simplebet
DraftKings (NASDAQ: DKNG) is rumored to be getting closer to acquiring micro-betting provider Simplebet in a potential deal that could value the latter at between $120 million and $170 million. This information was reported by Earnings + More, who received it from anonymous sources familiar with the situation. Neither DraftKings nor Simplebet has confirmed any takeover discussions yet.
These two companies have a history. In 2021, they signed a deal granting Simplebet micro-betting services for DraftKings Sportsbook. Today, the potential buyer is also the biggest client of the prospective target.
Micro-betting is a relatively new concept that originated from in-game (or live) betting - a popular alternative among operators aiming to increase revenue and keep fans engaged. While conventional in-game wagers could be based on scenarios like a baseball team scoring during their half inning, micro-betting through Simplebet goes the extra mile.
If Simplebet is indeed sold for $170 million, it would mean a cheaper deal than its $210 valuation after a 2021 Series C fundraising round worth $28.6 million.
DraftKings' shopping spree
Just a fortnight ago, it was reported that DraftKings might be in talks to buy Sports IQ Analytics - a supplier of analytics and data used by sportsbook operators to create odds for personalized player prop wagers. The financial details of this agreement weren't revealed; however, anticipations suggest it could range between $50 million and $70 million.
If DraftKings finalizes the deal for Simplebet and adds it to this previous acquisition of Sports IQ Analytics, they'll have spent nearly a billion dollars on purchases since early 2024. This estimate includes the $750 million they spent buying lottery provider Jackpocket through a combination of cash and equity.
Providers offering specialized odds, such as Simplebet and Sports IQ Analytics, have generally appealed to sportsbook operators for quite some time. Notable examples of similar deals include PointsBet buying Banach Technology for $43 million in 2021, which has now been acquired by Fanatics and operates under its brand.
Last year, Entain Plc (OTC: GMVHY), the controller of half of BetMGM, paid $266 million in cash for sports analytics provider Angstrom Sports.
Why Simplebet could be a great fit for DraftKings
Simplebet's offerings allow their clients to wager on in-game events, like individual baseball innings or strikes, appealing to bettors seeking instant gratification. In-game micro-betting appeals to gaming businesses as it's an attractive high-margin segment.
Moreover, micro-betting is tech-heavy, and it's usually more efficient for sportsbook companies to acquire such technology rather than building it themselves.
Some notable clients of Simplebet include Bet365, ESPN Bet, FanDuel, and Hard Rock Sportsbook, according to their website.
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