DraftKings acquires Canadian software solutions provider Sports IQ Analytics

DraftKings has finalized a deal to acquire odds maker and player prop provider Sports IQ Analytics. The business leverages artificial intelligence and machine learning in developing its software solutions for the online sports betting market.

The acquisition has been confirmed by Sports IQ CEO Omer Dor through a LinkedIn post although some details, including financial terms, have not been publicly disclosed. DraftKings has yet to officially comment on the acquisition.

Based in Vancouver, Canada, Sports IQ Analytics specializes in providing software solutions to online sports betting companies. Sports IQ Analytics supports a wide range of events, encompassing over 12,000 annually, and offers access to hundreds of in-play markets.

Omer Dor stated: “I’m excited for this next chapter in the Sports IQ Analytics journey. In DraftKings, we join a team whose desire for winning and being the best matches our own. I feel privileged for the last six years, working alongside the incredible group of people who make the Sports IQ team. They are hardworking intelligent and passionate and I’m so excited that we get to bring our skills and energy to DraftKings.

“I’m incredibly grateful to the phenomenal investors, advisors, partners and clients who supported our vision and provided guidance and experience in Sports IQ’s journey at every turn. I’d like to believe that every entrepreneur could only wish to be as lucky as I have been.”

Dor leads the company with support from co-founders Matthew Belzberg, chief information officer at Sports IQ; Jose Alfaro, chief data officer; and Andrew Schwartz, chairman of the business.

Those who have invested in Sports IQ include Boston Red Sox CEO Sam Kennedy and Fenway Sports Group (FSG) President Mike Gordon. The deal has been facilitated by legal professionals Eric Levy from Osler, Hoskin & Harcourt LLP and Robin Chabra of Tekkorp, along with their respective teams.

DraftKings' stellar Q1 performance

The acquisition of Sports IQ Analytics comes on the heels of DraftKings' notable performance in the first quarter of 2024. The company reported a 52.7% year-on-year increase in revenue, amounting to $1.18 billion. Additionally, DraftKings recorded an adjusted EBITDA of $22.4 million. 

The company said the growth is driven primarily by “continued healthy customer engagement, efficient acquisition of new customers, the expansion of the sportsbook product offering into new jurisdictions, higher structural sportsbook hold percentage, and improved promotional reinvestment for sportsbook and iGaming.”

DraftKings CEO Jason Robins attributed the positive results to factors such as encouraging customer engagement metrics and the company's expansion into new markets, including Vermont and North Carolina. The company's average monthly unique players saw a notable 23% year-over-year increase to 3.4 million, while average player spend surged by 25% to $114 per user.

DraftKings has revised its full-year guidance, with revenue projected to range between $4.80 billion and $5 billion, up from the initial estimate of $4.65 billion to $4.90 billion. Adjusted EBITDA is now forecasted to range between $460 million and $540 million.