Rush Street Interactive, the parent company of BetRivers, now expects to report positive adjusted EBITDA for the entirety of 2023, CEO Richard Schwartz said Wednesday.
“Given our outperformance during each of the three quarters of this year, we now expect to be adjusted EBITDA positive for the entire year well ahead of our original plans,” Schwartz said on Wednesday’s earnings call.
“We will continue to innovate and leverage our insights to develop and offer our customers differentiated and fun experiences that appeal to them while continuing to achieve sustainable growth and profitability.”
That could be the kind of catalyst needed for the BetRivers stock. RSI opened Thursday at $3.65, up 3.1% from Wednesday’s close.
What led to BetRivers growth?
Schwartz kicked off the call by explaining how BetRivers beat internal expectations.
Revenue grew 15% over last year to $169.9 million. That growth is coming from higher handle and improved hold from new sports betting products, Schwartz explained.
That revenue is also growing more efficiently, he said, as marketing expenses fell 24% compared to last year. Those factors helped RSI report $4.1 million in positive adjusted EBITDA, compared to a loss of $12.5 million in 2022.
It was the first quarter where RSI’s sportsbook-only markets were profitable, Schwartz said.
BetRivers bullish on Delaware
RSI will replace 888 as the online casino operator in Delaware in early winter, Schwartz said. BetRivers’ entrance also means the launch of online sports betting in the state for the first time.
Schwartz said the company is “very excited” for online casino in particular. Delaware reports about $13 million in annual gross revenue from online casino with 80% of that coming from slots.
The agreement with the Delaware Lottery also includes a digital marketing budget. In the past, the lottery did little in terms of advertising the online product.
RSI will bring more games and new features to the state, which should become a meaningful contributor of revenue and adjusted EBITDA, Schwartz said.
Prop Central driving handle growth
BetRivers received a significant product update in the form of Prop Central, which helped drive handle on props up 87%.
Prop Central now lists all prop bets from each major sporting event in one spot. Previously, bettors had to go to individual games to find the props available in those games.
BetRivers also updated its Squares product to involve every NFL game and most college football games. Squares gives bettors an extra opportunity to win with a square given to a bettor after certain wager amounts are reached on applicable games.
Key online casino metric hits record
RSI reported its highest average revenue per monthly active user for US and Canada in eight quarters.
The $374 in average revenue per monthly active is up 8% over last year and 4% from the second quarter.
That growth is despite the cut in marketing. RSI spent $34.1 million on ads and promos in the third quarter, down from $44.7 million last year.
Best customers are sports and casino bettors
Rush Street continues to focus on players that are interested in both the sports betting and casino products.
An online casino-only customer have a gross revenue that is five times higher than a sportsbook-only customer. A sportsbook and casino customer is worth 14 times more than just a sports betting customer.
Rush Street’s oldest player cohort (at 60 months or more) now has a lifetime value of more than $6,000.