Report: BetRivers Parent RSI For Sale, DraftKings Approached

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Rush Street Interactive (RSI) is for sale and pitched itself to DraftKings as an acquisition target, according to a Bloomberg report.

The report offered little additional detail and no update of significance from either side.

Neither RSI, which operates the BetRivers sports betting and iGaming brand, nor DraftKings responded to LSR requests for comment.

RSI’s stock popped on the report late Thursday through after-hours trading and opened Friday at $6.43, up 3.4% from Thursday’s open, on more than three times its average daily volume.

Why would DraftKings buy RSI?

DraftKings could have an interest in buying RSI based off the type of customers it has.

Rush Street Interactive is its own publicly traded company but is affiliated with Rush Street Gaming, which operates five retail casinos in four states. The company takes an iGaming-first approach, using its online sportsbook available in 15 states to cross-sell into iGaming in states that already have it while building up a database in other states with an eye on legalization in the future.

DraftKings, meanwhile, is active in many of the same states as BetRivers and is primarily a sports betting-first brand. While their customer bases likely overlap to an extent, DraftKings could want the multichannel customers that BetRivers built up over the past few years.

It would not be the first time DraftKings acquired an iGaming-first company. It bought Golden Nugget Online Gaming for $1.56 billion in DKNG stock back in August 2021.

Multichannel bettors spend more

It is no secret that having bettors play with your company through more than one channel increases their value significantly.

RSI broke out the difference in monetization by channel use in its fourth quarter earnings presentation. An online gambling customer contributes a gross revenue that is five times what an online sports betting-only customer does.

A customer that plays both contributes gross revenue 14 times that of an online sports betting customer.

RSI stock on the rise

It has been a bumpy road for RSI stock since the company went public through a reverse merger with a SPAC in December 2020. A recent run, however, might have management considering when might be the right time to cash out.

The stock closed at $21.51 on its first day of trading and is down 70.3% since with the stock closing at $6.39 on Thursday. That closing price, though, is up 129% from RSI’s all-time closing low of $2.79 hit April 5, 2023.

RSI hitting positive EBITDA for 2023 and flowing through nearly 100% of new revenue to the bottom line helped spark a run for the stock this year.