Rush Street Interactive (RSI) is exploring its strategic options, one of which could be a sale with potential buyers already approached according to a recent report by Bloomberg.
According to the report, RSI representatives have held discussions with DraftKings, citing unnamed sources. No further comment has so far been made by either company in the wake of the news.
Rush Street Interactive, whose brands include BetRivers and RushBet, offers online sports betting and iGaming in 15 US states and three other countries. The company also operates retail casinos in four states including Rivers Casino and Resort Schenectady, NY.
With reported sales of $691 million in 2023, up 17% on the previous year, RSI holds sixth place in the US online gambling sector and a market share of around two percent. The industry is dominated by a handful of big players topped by FanDuel and DraftKings.
DraftKings might be just one of the interested parties should RSI be put up for sale. BetRivers has been on the up, particularly in New York, the biggest state for sports betting in the US.
The brand closed out 2023 with one of its strongest quarterly performances taking $50.7 million of bets in December alone from its customers in the Empire State.
Based in Chicago, Rush Street Interactive is part of the real estate, casino and iGaming empire controlled by majority shareholder Neil Bluhm. RSI began publicly trading in December 2020 through a merger by a special purpose acquisition company. Since then, CEO Richard Schwartz has been at the helm.
A recent rally in its stock may have Rush Street investors considering that now is the prime moment to recoup their money. Following the speculation around a possible buy out, the company’s stock surged to close at $6.39, valuing RSI at approximately $1.4 billion.
Rush Street wouldn’t be the first gambling company to exit the still-booming US industry. PointsBet has already departed as Fanatics acquired its assets late last year and WynnBet will also largely be no more once Penn Entertainments agreement to purchase its gaming licenses gain regulatory approval.
Rush Street Interactive has been primarily focused on iGaming, a strategy that may appeal to the likes of DraftKings which has always been a business slanted mainly towards sports. The BetRivers database of multichannel customers could be an appealing one for sports betting companies looking to branch out.
Elsewhere, Rush Street Interactive has a presence in the fast-growing Latin America market with operations in Mexico and Colombia. RSI also benefits from an effective monopoly on online casino and sports betting in Delaware. Legal wagering apps and websites in the First State went live this January, powered solely by Rush Street.
In January, FanDuel's parent company Flutter began trading on the New York Stock Exchange (NYSE). At the time, Flutter said that it saw the NYSE as the optimal trading location for its shares.
In New York, there’s also the small matter of the next raft of brick-and-mortar casino licenses up for grabs. Rush Street already has skin in that particular game thanks to its Schenectady property in the Upstate region.
Speculation about Rush Street Interactive being a target for acquisition is not new, but it has certainly ramped up a notch with this latest raft of rumors. Few expect that the current wave of buy-outs and rationalization will end anytime soon.
The price for RSI is anticipated to be above its current market value as potential bidders may be prepared to pay a premium for its specific strengths outlined above in comparison with many rivals.
