Rush Street Interactive Sale Could Be on the Horizon, Report Suggests
The long-rumored sale of Rush Street Interactive (NYSE: RSI) might come to fruition in two months or less, according to a recent report by the Offshore Gaming Association (OSGA). The report, citing unidentified sources, noted that a deal for the owner of BetRivers could be reached as soon as September. Specific suitors were not mentioned, but previous media reports indicated that Illinois-based Rush Street Interactive had approached multiple rivals about a possible acquisition. Among those identified was DraftKings (NASDAQ: DKNG).
Potential Takeover Target
With the U.S. sports betting market increasingly dominated by FanDuel and DraftKings, Rush Street Interactive stands out as a compelling takeover target for companies looking to enhance their market share. In the first quarter of this year, Rush Street Interactive showed positive results on the basis of earnings before interest, taxes, depreciation, and amortization (EBITDA). Their revenue surged by 34%, and their net loss decreased significantly to $2.2 million from $24.5 million the previous year.
Strategic Advantages
Rush Street Interactive offers an attractive foothold in the iGaming industry, making it an appealing acquisition for potential buyers. Additionally, the company has established a strong presence in the fast-growing Latin American wagering market, particularly in Colombia and Mexico. This success could position the company to secure a sports betting license in Brazil, the region’s largest economy and most populous country. In the first quarter, Rush Street Interactive’s monthly active users (MAUs) increased by 72% in Latin America, while the average revenue per MAU rose by 4%.
Despite the promising performance, some analysts have expressed skepticism about Rush Street Interactive being a takeover target. However, CEO Richard Schwartz indicated in May 2023 that he would be open to mergers and acquisitions discussions. The company’s market capitalization was $2 billion as of the close of U.S. markets on July 12, suggesting that any buyer would likely need to offer more than that to bring Rush Street Interactive to the bargaining table.
Possible Suitors Beyond DraftKings
While DraftKings making a move for Rush Street Interactive would make strategic sense, given its acquisitive nature and focus on iGaming expansion, the company has not confirmed any interest. Some analysts believe DraftKings might avoid acquisitions in the near term.
The OSGA report mentioned that “smaller companies who would love to increase their presence” could be potential buyers, though no specific operators were named. European betting giant bet365 was suggested as a possible suitor, but there have been no confirmed discussions with Rush Street Interactive.
HG Vora, a hedge fund known for advocating changes at gaming companies, is the largest investor in Rush Street Interactive, controlling 8.79% of the shares. Institutional investors own 28.81% of the shares, while insiders control 8.08%, according to GuruFocus data.
Market Presence
Rush Street Interactive operates under the BetRivers and PlaySugarHouse brands, offering mobile or retail services in states including Colorado, Illinois, Indiana, Iowa, Michigan, New Jersey, New York, Pennsylvania, Virginia, and West Virginia. The company also offers sports wagering in Ontario, Canada.
Conclusion
The potential sale of Rush Street Interactive could significantly impact the competitive landscape of the U.S. sports betting market. With its strong market presence, strategic advantages, and growing performance metrics, Rush Street Interactive represents an attractive acquisition target for companies looking to expand their footprint in the rapidly evolving gaming industry. Whether the sale materializes by September or not, the interest from various potential buyers underscores the company’s value and strategic importance in the market.
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Rush Street Interactive could be sold by September, with potential buyers eyeing its strong market presence and growth in the U.S. and Latin American iGaming sectors.
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Rush Street Interactive sale
Garry Sputnim is a seasoned journalist and storyteller with over a decade of experience in the trenches of global news. With a keen eye for uncovering stories that resonate, Alex has reported from over 30 countries, bringing light to untold narratives and the human faces behind the headlines. Specializing in investigative journalism, Garry has a knack for technology and social justice issues, weaving compelling narratives that bridge tech and humanity. Outside the newsroom, Garry is an avid rock climber and podcast host, exploring stories of resilience and innovation.