DraftKings Eyes $170M Acquisition of Micro-Betting Powerhouse Simplebet

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Sports betting behemoth, DraftKings, is sifting through the whispers circling Wall Street, the telltale chatter of a potential corporate acquisition. The target this time, it seems, is Simplebet, an innovative provider of micro-betting services. A value tag between $120 million to $170 million is the buzz on the trading floor. This whisper has not been confirmed by either DraftKings or Simplebet, yet its credibility is underpinned by their joint history. In 2021, they sealed a business deal with Simplebet servicing DraftKings Sportsbook with its novel micro-betting format – a partnership that now positions the prospective suitor as the rumored target’s largest client.

Micro-betting, an inventive spin-off of in-game or live betting, is taking the industry by storm. This high-octane betting style diverges from traditional in-game bets, such as propositions on a baseball team’s half inning scoring or game-specific situations like point spreads and totals. Simplebet’s micro-betting approach dives deeper, allowing for even more precise scenarios, rallying fan engagement, and spiking the betting pool.

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Should speculation of the $170 million acquisition prove accurate, Simplebet would be selling at a significant markdown from its $210 million valuation secured from a Series C funding round in 2021, which hauled in $28.6 million.

The whisper around DraftKings comes hot on the heels of a confirmed acquisition just a fortnight ago; Sports IQ Analytics – a firm specializing in providing analytics and data for formulating odds for player prop bets joined the DraftKings empire. Although the terms of this deal were cloaked in confidentiality, it is speculated that the transaction ranged between $50 to $70 million. Add to this, another $170 million (should speculation materialize) for Simplebet, coupled with the stupendous $750 million paid for Jackpocket, an internet lottery provider, DraftKings’ total spending for acquisitions since the dawn of 2024 nudges close to an awe-inspiring billion dollars.

Providers of these sophisticated odds, like Simplebet and Sports IQ Analytics, have caught the eye of sportsbook operators in recent years. Pointsbet for instance, shelled out $43 million for Banach Technology in 2021, before being absorbed itself by Fanatics and assuming that brand.

In an eerily similar move, Entain Plc, controlling partner of BetMGM, flexed its financial muscles by snapping up sports analytics provider Angstrom Sports for a reported $266 million cash in 2021.

Grasping the appeal of Simplebet to DraftKings is no Herculean task. Simplebet enables sportsbook clients to speculate on in-game events at a granular level, such as individual balls and strikes in a baseball game. This instant, play-by-play betting style is proving irresistible to punters in search of on-the-spot thrills, earning it the label of a high-margin segment. Moreover, the tech-intensive nature of micro-betting often tilts the scale in favor of acquisition over in-house technology development, further sweetening the deal for DraftKings. Other betting juggernauts serviced by Simplebet include Bet365, ESPN Bet, FanDuel and Hard Rock Sportsbook, according to the company’s website.