After two controversies concerning lottery couriers in Texas, the state prohibited that method of buying lottery scratchers and tickets. This action may lead to a slight impact on DraftKings' (NASDAQ: DKNG) revenue for 2025. 

DraftKings possesses Jackpocket, a leading name in the lottery delivery industry. The sector, currently in its nascent stages, faced backlash in Texas after a secretive European group employed a courier to purchase 25.8 million tickets for a draw on April 22, 2023, leading to the group claiming a $95 million jackpot along with additional prizes. The situation was revisited earlier this month when a gambler secured an $83.5 million reward in Texas after buying a ticket through Jackpocket. 

A recent report by Eilers & Krejcik Gaming (EKG) projected that Texas would account for $57 million, or 25%, of the US lottery courier revenue this year, coming in second to New York.

"We estimate DraftKings-owned Jackpocket had 60-70% revenue share of the Texas market, which puts the revenue impact at or around $34 million-$39 million. That represents <1% of DraftKings’ projected CY25 net revenue of $6.45 billion,” according to the research firm.

Jackpocket operates in 17 states, along with Puerto Rico and Washington, DC. The operator’s website does not list Texas as part of that group. 

Texas Might Be a One-Time Event 

A major concern regarding couriers like Jackpocket is that in several states, they function in a gray area since those states have neither clearly allowed nor prohibited lottery courier services. 

EKG claims that 92% of lottery courier sales come from only five markets, yet only two — New Jersey and New York — have defined regulations allowing companies like Jackpocket to function in those areas. 

Although it hadn’t explicitly prohibited couriers, Texas was known for being unwelcoming to the business. Nonetheless, the previously mentioned controversies may encourage the industry to implement measures that eliminate collusive practices. 

“Given the furor in Texas, we suspect future syndicate coups will be prevented, and without this kind of explosive story, we suspect many states will be content to maintain the status quo or negotiate regulation, rather than pushing for outright bans,” adds EKG.

How DraftKings Acquired Jackpocket 

DraftKings is one year past declaring its $750 million purchase of Jackpocket. Fifty-five percent of the purchase price was settled in cash, while the rest was financed through the buyer's equity. The agreement was completed in May of last year. 

The acquisition, which has benefited the buyer, was seen as a chance for DraftKings to promote iGaming and sports betting to lottery players. 

Nonetheless, it was not without controversy, albeit minor, since DraftKings co-founder and CEO Jason Robins had invested in Jackpocket.