CEO Spotlight Series: Exclusive Interview With Akshay Khanna, the Co-Founder and CEO of Jackpot.com
Tell us more about your background working in professional sports at the Philadelphia 76ers and ticketing at StubHub. Why the pivot to the gaming industry to help build out Jackpot.com’s efforts to help transform the lottery sector? How has your background in these industries helped you in your current role?
Early in my career, my passion for the world of sports and entertainment led me to Harris Blitzer Sports & Entertainment (HBSE), where I oversaw the business strategy group and was directly involved in most facets of revenue generation for the organization’s teams. This included working with the Philadelphia 76ers, New Jersey Devils Prudential Center, Crystal Palace, and others. I’m so thankful for my time at HBSE; I forged some lasting relationships, and it’s what led me to my role at StubHub, where I eventually became the GM of North America, overseeing the majority of StubHub’s business at the time. Looking back on it, I had the opportunity to befriend many great executives and individuals within the sports landscape. These personalities ultimately played a huge part in the development of Jackpot.com; their belief in me and my vision is what pushed me to succeed, and they ultimately came aboard in the form of investors and advisors. Working at StubHub during the COVID-19 pandemic, I saw firsthand how in-person events were affected and how the rise of mobile ticketing opened the door for further accessibility opportunities from one’s phone. Jackpot.com and the business model of purchasing lottery tickets without even having to leave your house really resonated with me as the logical next step in this progression. I felt this was the perfect product to build for the post-pandemic world given my experiences, and having seen how successful a company like StubHub had been in its core mission of creating a safe and secure e-commerce experience for a purchase path that was previously extremely inconvenient and analog, it felt logical to try to repeat that.
Tell us about Jackpot.com’s business model and what the roadmap looks like over the next few years to bring lottery courier to the masses. How many states are you currently in, and how many do you expect to enter over the next few years?
We allow users to order tickets to play the largest official national and state lotteries directly from their phones—no need to leave your home, no being forced to purchase with cash, no having to worry about losing your ticket. Any winnings (up to $599) will be paid directly into your account at the earliest possible time. For larger prizes, Jackpot.com’s Customer Experience team will contact users directly once the ticket has been verified against the official results.
Jackpot.com is currently live in three states: Texas, Ohio, and New York. All three are among the 10 largest lottery ticket-purchasing states in the country. While it takes time to get approvals cleared with state operators and lottery commissions, Jackpot.com plans to launch in several more states in the coming months, including in the tri-state area. The goal is to eventually give every eligible American the opportunity to purchase a lottery ticket on their devices.
Walk us through the competitive environment versus some of your peers like Lotto.com and Jackpocket that are also well capitalized and targeting the same vertical.
The online lottery courier industry without a doubt has the potential to expand and gain traction, just like we’ve seen in the sports betting industry with the likes of apps such as DraftKings and FanDuel. As you mentioned, any industry with a large TAM/potential like ours will have multiple parties trying to give customers the best possible experience. To that end, we’re incredibly proud of our product and customer experience, which we believe allows us to stand out from anyone else in this space. When we launched in New York back in August, we did so under a marketing partnership with the New York Yankees. It gave us the opportunity to utilize unique experiences with the most storied franchise in sports, offering our new users and customers one-of-a-kind activities such as batting practice at Yankee Stadium. We’re certainly always thinking outside of the box when it comes to customer experience and how we can provide the best product to customers while differentiating ourselves within the market. Perhaps most importantly, we’ve invested a significant amount of resources on the responsible gaming front. Jackpot.com features several safeguards to protect against problem gambling, including default limits on daily deposits. In fact, it’s because of this that we’ve been able to launch with an iCap Certification from the National Council on Problem Gambling—and we are the only gaming company to have ever launched with this.
What I find interesting about the lottery industry is that despite the odds of winning a large jackpot the consumer, the frequent and occasional player seems eager to go back to the well as the size of drawings increases. What is it about lottery that has such a captivating effect?
The idea of the lottery goes back to ancient times; the chance to win a life-changing prize has long captivated people, and the larger or more life-changing that amount would be, the more people have fun and become invested. As with anything nowadays, the easier a transaction is to complete, the more often we’ll see it done. You can pay for anything with your phone, so if you have the ability to purchase your chance to win potentially millions—or in some cases, billions—wouldn’t that keep you coming back for more, given the ease of securing a lottery ticket? People are just more comfortable making purchases on their phones, especially the younger demographic, and the lottery allows for entertainment at a relatively affordable price point, given that most tickets are $1–$2. We’ve all daydreamed about what we’d do with lottery winnings; we’re just bringing that fun daydream to as many people as possible.
In recent years, $1+ billion jackpots have become almost “normal.” How do you capitalize on this essentially free media to drive uptake, attract new customers, and ultimately reduce your CACQ? Are huge jackpots potentially a curse as more occasional players become almost “numb” to the size of payouts before they want to engage again?
We’re definitely going to see these larger jackpot amounts more frequently moving forward. I don’t foresee an industry-wide “numbness” to these prize amounts; at the end of the day, the larger prize pool creates more buzz and gets people excited about buying tickets. The idea of becoming a billionaire is unlikely to lose its appeal, no matter how frequently the opportunity may arise.
Talk to us about your efforts to work with lottery regulators, and importantly, traditional lottery ticket retailers (ex: convenience stores) to alter their business models and embrace new online distribution channels like Jackpot.com. What do some of the various nuances look like (ex: having to have physical distribution sites in some states) that make it more challenging for you to execute?
Right now, we are focused on working collaboratively with regulators in all the states where Jackpot.com is currently live, as well as coordinating all the necessary materials and assets required to launch in additional states in the near future. We are totally committed to upholding our relationship with regulators and cementing ourselves as one of the premier names in the online lottery industry. We’ve generally found that regulators understand the value proposition we provide and see value in the investments we’ve made on the responsible gaming fronts.
You are offering both desktop and mobile (app) products for consumers to purchase lottery tickets and track the results of drawings. What are you seeing in terms of the use of these platforms? Are there meaningful differences in customer demographics and utilization? Has this surprised you at all versus perhaps what you experienced at StubHub? How do you see lottery courier unlocking and expanding the size of the market and different types of consumers versus traditional channels? What evidence can you pinpoint so far?
We recently polled American consumers on their perception of the online lottery, among other relevant aspects, and we were unsurprised to see that almost the entirety of respondents indicated they purchase their lottery tickets in-person at a store but indicated a desire to purchase online, if such a service were offered to them. At the end of the day, we are solving a known customer problem and one for which consumers are screaming out. Sports betting across the country has been legalized and rolled out in a similar fashion in recent years, and there is no question people love the ease and accessibility these apps afford to users. The online lottery and apps such as Jackpot.com definitely have a bright future as we establish ourselves in the coming months and years. To the app versus web point, the significant majority of our customers do download and enjoy using our app, but we wanted to be sure to provide our customers with every possible digital experience so that those who prefer to shop on desktop/web can do so.
When we talk about the lottery courier segment to investors and industry participants, they occasionally ask us whether a business can fully survive on lottery tickets alone. How do you counter this notion?
The lottery was a $100+ billion industry in 2022 in the U.S. alone (~$250 billion worldwide), with more than half of all Americans buying at least one lottery ticket last year—arguably one of the largest and most widely conducted discretionary purchases. So, I have no doubts that this industry will support many businesses, as long as they focus on solving customer demand.
Clearly, you are building up a great database of recurring casual gamblers. How do you think about introducing other gaming products or experiences over the next few years? What might those types of gaming products look like (ex: digital scratch-offs, online casinos, online sports books)?
The online lottery industry is still new to so many people. While the ability to purchase state-official lottery tickets on your phone is a foreign concept to many, there is definitely an appetite among consumers for additional gaming products. We’re constantly looking for new avenues and methods to improve the gaming experience for users, so we’re always looking for new offerings to integrate into Jackpot.com.
You completed your $35 million Series A round in June 2022 with some notable investors like Accomplice and Courtside Ventures (co-led) as well as the Kraft Group, Michael Rubin, Haslam Sports Group, Elysian Park Ventures, and a number of celebrities/athletes. With that said, we are in a more challenging fundraising environment. How are you navigating that currently?
Currently, we’re focused on organically growing and expanding the business, securing approvals and everything necessary to launch in new states while also cultivating new partnerships with key brands, franchises, and other players in our existing markets. We’re fortunate to be well capitalized and incredibly proud to have the caliber of the investor that we do.
Do you have plans to raise additional capital in 2024 to accelerate your growth, and what are the key points you want to highlight to potential new investors as well as the important milestones that you would remind your existing investors you have achieved?
Right now, we are focused on sustaining our growth, especially following our launch in New York over the summer—the second-largest lottery market in the country. As we near the end of 2023, we have really accomplished quite a lot in just a year’s time. From raising $35 million in our Series A round to launching in three major states and partnering with some of the world’s most recognized brands and sports franchises like the Dallas Cowboys and New York Yankees, 2023 was a breakout year for us, and we certainly expect to hit the ground running in 2024, where we expect to be live in many more states.