While other sports betting and iGaming operators are focused on the “stars” of their businesses, Rush Street Interactive CEO Richard Schwartz said his company is focused on where he says the business is really won.
Most are concerned about more parlays, variety of bets, prop bets and other issues Schwartz likened to the star players in a football game. But the parent company of BetRivers said a profitable business comes down to finer details than that.
“… And [those stars are] important, but the war is won in the trenches,” Schwartz said Thursday at the 19th Annual Needham Technology, Media, & Consumer Conference. “… The equivalent of the offensive and defensive linemen in our industry is the technology platform of a business. It’s not sexy to talk about, most investors don’t really have a lot of interest in learning about it, but the truth is is that it’s where you make profits in our industry.”
Whether investors learn about it or not, it seems clear the market is buying into the success RSI of recent quarters. The stock closed at $8.68 Friday at nearly triple its 52-week low of $2.90 from a year ago, though the stock is still nearly three times short of its all-time high of $25.32 hit in January 2021.
Schwartz: sports betting, iGaming platform matters
Schwartz called out various benefits of its platform, which includes flexibility in know-your-customer (KYC) options that can lead to more successful customer signups than other operators.
Rush Street does more than aggregate third-party online casino content like others in the industry, Schwartz added. The platform adds to the gameplay experience with its jackpot system or an invitation to a bingo game, which gives a differentiated player experience.
“We’ve always maintained that when the market gets more competitive, the players are going to choose the operators that deliver the best experience for them, and the service for them, and that’s something we’ve spent over a decade focused on,” Schwartz said.
It is the platform that helps drive growing average revenue per active monthly user even with growing customers in the first quarter with the highest level of first-time depositors in company history, he added.
How does BetRivers rank?
While BetRivers is in the top five sports betting operators for 2023, there is a big gap between the leaders’ share and its fifth-place share.
FanDuel, for instance, led with a 38% share of online handle and 45% share of online revenue from states that publicly report by brand. DraftKings, meanwhile, had 34% of handle and 31% of revenue for the year.
Compared that to the BetRivers 3.5% share of handle and 2.6% share of revenue. Third-place BetMGM (8.1% handle, 8.0% revenue) and fourth-place Caesars (8.0% of handle, 5.1% of revenue) are around double the share of BetRivers.
Only Michigan breaks out individual operators for iGaming performance. BetRivers ranked fourth in revenue for April, behind FanDuel, BetMGM and DraftKings, and ahead of Caesars.
Delaware allows platform to shine
Schwartz said the “massive differences” in marketing budgets, brand awareness and databases often makes it difficult for investors to “fully understand” the quality of RSI’s platform.
BetRivers is the latest monopoly operator of iGaming in Delaware, taking over for 888 after years of underwhelming results. RSI also launched online sports betting for the first time despite Delaware being the first state to take a legal bet outside of Nevada following the fall of PASPA.
“So what we like about Delaware is it gave investors, I think, the first example to see that when you take a casino platform run by a company that’s been doing it for 25 years, online casino, as a global leader in Europe and also active in the US, and you replace that platform with ours in this market, we got this 4x improvement, pretty immediate and pretty drastic with very minimal marketing,” Schwartz said. “So I think it really showcases the bells and whistles of what we’ve built and the value of it, that you take an average player and bring them into our platform you’re going to get a much larger return than you did from other platforms that are maybe not as advanced in the capabilities that we have.”
The strength of Delaware and strong trends that have continued into the second quarter led Rush Street to improve its adjusted EBITDA guidance.
DE sports betting change could cost state millions
Rush Street Interactive’s Delaware online sports betting monopoly may be short-lived if a bill expanding the market passes during this legislative session. It will also be costly for the state, according to a fiscal note added to HB 365 last week that Schwartz called out during the conference.
Changing the market to allow up to six online sportsbooks will lead to an $8.8 million loss to the state’s general fund for fiscal years 2025 through 2027. Operating and one-time costs would be $1.3 million over the same period.
The bill is up for a House committee hearing at noon ET Wednesday. The bill was pulled off the committee calendar Friday, and sponsors did not respond to LSR requests for comment.
Schwartz said the current structure will likely be kept. Even if not, 75% of the revenue from the state comes from online gaming.
Home run bets jump at BetMGM
Angstrom launched with MLB products at BetMGM, which has led to a 209% more home run bets in the first month compared to last year.
The company said in a release that the integration of Angstrom gives BetMGM the most expansive home run markets in the industry.
Elsewhere, BetMGM will be featured on Wheel of Fortune‘s “Big Money Week” theme of shows this week. The brand is sponsoring a nightly progressive jackpot.
Circa adds Kentucky sports betting
Circa Sports is now in five states after launching in Kentucky last Tuesday.
Partnered with Cumberland Run harness track, Circa will offer betting to those 18 and older as allowed by state law.
