Rush Street Interactive and its BetRivers brand appeared to be the odd one out in the first few years of online sports betting regulation in the US.
RSI was unwilling to spend like the other brands to build up its database, which often left it looking up in the monthly reports at the other brands taking more and more dollars each month. Despite the stock tumbling to all-time lows as other public companies grew, management always relayed a positive message that BetRivers and RSI could carve out a profitable business segment and not fall off like many other brands.
All of that work culminated in 2024 with the company’s “best year ever,” CEO Richard Schwartz told analysts on RSI’s year-end earnings call Wednesday evening. The stock responded positively after a few down days over taxation concerns in Colombia in after-hours trading, but that momentum switched at Thursday’s open.
RSI opened at $12.50, down 6% from Wednesday’s close.
Growth expected to continue
RSI set many new records in the fourth quarter and 2024, but they may not last long.
The company forecasted an adjusted EBITDA range of $115 million to $135 million. That $125 million midpoint would mean growth of 35% year over year.
RSI expects revenue between $1.01 billion and $1.08 billion in 2025, which would represent 13% growth at the midpoint.
Those numbers include the Colombian value-added tax through the end of the year, meaning there is an upside should the court reviews strike down the tax. The guidance does not, however, include any potential US tax increases.
BetRivers by the numbers
Almost every important number was positive for RSI with strong growth across its domestic and international markets.
Monthly active users in the US and Canada grew 28% to 205,000 in the fourth quarter. Average revenue per monthly active user was $346, up $1 despite the increased customers.
Latin American average revenue per monthly active user was down to $39 from $42. Part of that decline, though, is due to a 71% jump in monthly active users to 348,000.
Quarterly adjusted EBITDA hit $30.6 million, almost triple its $11.5 million total from Q4 2023. That is despite the customer-friendly NFL results seen throughout the quarter.
New tax rates a concern for BetRivers?
All things considered, RSI sees the trend of states considering gaming tax increases as beneficial for both the industry and itself.
Schwartz noted that 88% of the US adult population still cannot play regulated online casino games legally.
“So while in the near-term, you might have a couple of hiccups, ultimately, we think that the net-net is positive for us as you start to see the needs for the states accelerate, the revenue generation, and online gaming can represent a very substantial way for them to achieve their goals,” Schwartz said.
Delaware growth continues
The first year of operations for BetRivers in Delaware proved all the state needed was a new gaming partner.
Online casino revenue hit $72.9 million in 2024, compared to $14.1 million in 2023, when 888 was the only platform provider in the state. Schwartz noted that the market hit a gross revenue run rate of $125 million in the fourth quarter, which continued to grow in January.
The handle totals tell the story of how important a platform and its content can be. Delaware online table and slots handle was $1.9 billion last year, up 322% from the $447 million in handle from 2023.
BetRivers also introduced online sports betting to the market. That led to $16.4 million in revenue off $216 million in handle compared to $10.9 million from $65.3 million in retail betting handle from 2023.
BetRivers not eyeing new states
Schwartz said BetRivers will not enter any sports betting-only states if there is no potential path to iGaming. Despite the maturity of some of those states, the market leaders are still continuing their investments, he added.
The main focus for RSI has been and will continue to be online casino, he said.
“So, we’re not going to just sort of chase a sportsbook market coming in late where we don’t really see a strategic value longer term for us outside of the sports betting business,” Schwartz said.
Cash means flexibility
RSI is “actively assessing and considering” potential acquisitions “all the time,” which is necessary in this business, Schwartz said.
The company is looking at potential Latin America bolt-on acquisitions that could drive shareholder value, he said. RSI could also buy back stock, though that is not likely if the stock continues to perform well. CFO Kyle Sauers said the company will remain “opportunistic” with buybacks.
“Ultimately, having a $229 million now of unrestricted cash and growing our cash flow, great balance sheet gives us a lot of flexibility and a lot of options,” Schwartz said.
