The third CT sports betting brand should go live again at some point this fall, though potential customers will have to wait to find out who won the contract.
Wednesday was the deadline for the CT Lottery to select its new sportsbook partner after Rush Street Interactive pulled out of the 10-year commitment in March.
That technically starts the negotiation period, after which the lottery will be ready to make an announcement, a spokesperson told LSR. The CT Lottery took about a month and a half between selecting a partner and announcing that partner last time.
Why the sudden CT sports betting change?
RSI apparently saw enough in about 18 months to decide its partnership was not worth it financially and decided to pull the plug.
“Consistent with our long-term strategic goals, after much deliberation and discussions with the CLC, we believe it is in the best interest of RSI and our stockholders to wind down this partnership,” CEO Richard Schwartz said in the announcement.
RSI decided its capital and resources would be better off somewhere else, Schwartz added during RSI’s first-quarter earnings call. There was no separation payment and while the split will hurt revenue in future years, it will have a positive impact on profitability, he added.
The online sportsbook accounted for just 9.7% of handle and 7.4% of revenue in Connecticut since launch.
RSI offered plenty of cash
The RSI offer was the best from a monetary standpoint when the CT Lottery first selected a partner, lottery Chairman Rob Simmelkjaer said at the time. Rush Street offered a minimum of $170 million to the lottery over the 10-year contract, nearly double the $95 million minimum, and guaranteed more than 50% of revenue to the lottery.
From October 2021 through April 2023, RSI’s online sportsbook reported just $11.9 million in gross revenue after promo deductions. That is even less than its handful of retail locations, which did $14.7 million in gross revenue over the same period.
That combines for $26.6 million in gross revenue, or $7.4 million less than $34 million Rush Street guaranteed to the CT Lottery for those two years.
Who wants CT sports betting license?
There were four bidders who lost last time:
Winning and using the company’s own sports betting brand is only a possibility for two of those companies, though. No bidder can use the name of a retail casino in its name, which is why RSI had to use the PlaySugarHouse brand.