On February 11, 2024, the Company entered into a definitive agreement (the “ Jackpocket Merger Agreement”) to acquire Jackpocket, a digital lottery app in the United States (the “Jackpocket Transaction”).

On May 22, 2024 (the “Jackpocket Closing Date”), DraftKings consummated the Jackpocket Transaction, and, under the terms of the Jackpocket Merger Agreement and subject to certain exclusions contained therein, Jackpocket stockholders received approximately $450.9 million of cash consideration and approximately $320.8 million of equity consideration.

The acquisition of Jackpocket allows DraftKings to participate in the U.S. lottery vertical with expected ancillary benefits to its Sportsbook and iGaming product offerings by enhancing customer lifetime value and customer acquisition capabilities.

Operating results for Jackpocket on and after the Jackpocket Closing Date are included in the Company’s unaudited condensed consolidated statements of operations for the three and six months ended June 30, 2024. Because the Company is integrating Jackpocket's operations into its consolidated operating activities, the amount of revenue and earnings attributable to the Jackpocket business from the Jackpocket Closing Date through June 30, 2024, which is included within revenue and net income (loss) attributable to common stockholders in the Company’s unaudited condensed consolidated statements of operations, is impracticable to determine.

On the Jackpocket Closing Date, the Company acquired 100% of the equity interests of Jackpocket pursuant to the Jackpocket Merger Agreement. The following is a summary of the consideration issued or paid on the Jackpocket Closing Date:

(1)Includes the issuance of approximately 7.5 million shares of DraftKings Inc.’s Class A common stock issued at $41.90 per share and $6.2 million of options exercisable for shares of DraftKings Inc.'s Class A common stock, which were issued to certain Jackpocket employee optionholders in exchange for their vested Jackpocket options.

The purchase price allocation for Jackpocket set forth herein is preliminary and subject to change within the measurement period, which will not extend beyond one year from the Jackpocket Closing Date. Measurement period adjustments will be recognized in the reporting period in which the adjustment amounts are determined and may include adjustments pertaining to intangible assets acquired and tax liabilities assumed, including the calculation of deferred tax assets and liabilities. Any such adjustments may be material.

The following table summarizes the preliminary fair value of the assets acquired and liabilities assumed in connection with the consummation of the Jackpocket Transaction on the Jackpocket Closing Date. The values set forth below are preliminary, pending finalization of valuation analyses:


Cash and cash equivalents	$	45,999
Cash reserved for users	23,349
Receivables reserved for users	9,092
Prepaid expenses and other current assets	4,151
Property and equipment	1,523
Intangible assets	269,736
Operating lease right-of-use assets	2,579
Deposits and other non-current assets	136
Total identifiable assets acquired	$	356,565
Liabilities assumed:
Accounts payable and accrued expenses	$	33,961
Liabilities to users	16,877
Operating lease liabilities	2,580
Other long-term liabilities	80,463
Total liabilities assumed	$	133,881
Net assets acquired (a)	$	222,684
Purchase consideration (b)	$	771,707
Goodwill (b) – (a)	$	549,023

Goodwill represents the excess of the gross consideration transferred over the difference between the fair value of the underlying net assets acquired and the underlying liabilities assumed. Qualitative factors that contribute to the recognition of goodwill include certain intangible assets that are not recognized as separate identifiable intangible assets apart from goodwill. Intangible assets not recognized apart from goodwill consist primarily of benefits from securing buyer-specific synergies that increase revenue and profits and are not otherwise available to a market participant, as well as acquiring a talented workforce and cost savings opportunities. Goodwill recognized is not deductible for tax purposes. Goodwill associated with the Jackpocket Transaction is assigned as of the Jackpocket Closing Date to the Company’s consolidated reporting unit. As Jackpocket's financial results are not material to the Company’s consolidated financial statements, the Company has elected to not include pro forma results.

For the three and six months ended June 30, 2024, the Company incurred $10.4 million and $15.3 million in advisory, legal, accounting and management fees in connection with the Jackpocket Transaction, respectively, which are included in general and administrative expenses on the Company’s unaudited condensed consolidated statements of operations.

On May 7, 2024, the Company acquired 100% of the equity interests of SIQ for a mix of cash and shares of DraftKings Inc.’s Class A common stock (the “SIQ Transaction”). The acquisition of SIQ allows DraftKings to bring further pricing and trading capabilities in-house in an effort to drive margin expansion and product differentiation. The acquired assets and assumed liabilities of SIQ were recorded at their estimated fair values. Goodwill associated with the SIQ Transaction is assigned as of the acquisition date to the Company’s consolidated reporting unit. The purchase price allocation for the SIQ Transaction is preliminary as of June 30, 2024. Goodwill recognized is not deductible for tax purposes and transaction costs were not significant. As SIQ's financial results are not material to the Company’s consolidated financial statements, the Company has elected to not include pro forma results.