BetRivers parent Rush Street Interactive has a different view on sports prediction models than most of its competition in the online sports betting business.
While most operators view sports predictions as a form of competition and a market they may need to tap into, Rush Street Interactive CEO Richard Schwartz sees the markets as something of an ally for online casino-focused BetRivers.
“I would say that for us in particular, it doesn’t have the same risk as the others,” Schwartz said on Wednesday‘s earnings call. “To the contrary, if prediction markets increase the chances of tax dollar erosion for states that have legal online sports betting, I think a very real possibility is that it could accelerate the legalization of iCasino, which doesn’t have the same level of risk. So it provides a more protected category for states who want to have some meaningful revenue upside for the taxes for their state.
“So I think it could work out well for us ultimately in the sense that our top priority is legalizing additional iCasino states and opportunities for online casino legalization. And I think this could give a nod towards that being another reason why states should do it.”
RSI cash for online casino launches
RSI continues to have a strong balance sheet, with cash on hand of $241 million at the end of the quarter and no debt. Management was asked what the plans are for that cash aside from the $42 million remaining on its $50 million share buy back authorization, such as any acquisitions or returning cash to shareholders.
“I think the biggest opportunity for us in use of cash is when we have new markets open up, particularly iCasino led markets,” CFO Kyle Sauers said. “And certainly, if we have more than one of those happening at the same time, want to make sure we’ve got plenty of capital to invest because we know that returns are really, really strong. We’ve seen that time and again when we’ve launched iCasino markets. So that’s a real need for us, to make sure we’ve got dry powder available.”
Online casino launches are not where the company wants to skimp, added Schwartz:
“And I think as Kyle indicated, we have a lot of emerging opportunities, I think, in the future are going to exist for iCasino, and we want to make sure we’re properly able to invest the maximum we need to kind of achieve the shares that we know is possible given the quality of our experience.”
Guidance raised after 9th quarter of growth
Improved revenue and EBITDA is turning into a tradition for Rush Street Interactive’s reports as the company saw growth in both areas for the ninth consecutive quarter.
RSI now expects adjusted EBITDA to fall between $133 million and $147 million for 2025 on between $1.05 billion and $1.1 billion in revenue. At the midpoints, those figures represent a 51% increase and a 16% increase over 2024 totals, respectively.
Those figures take into account the tax increases in Illinois and New Jersey. They also assume that the Colombian VAT will extend through the entirety of 2025, though it could be ended sooner.
Shareholders seem pleased with the improved guidance and overall report. RSI opened Thursday at $18.55, up more than 15% from Wednesday’s closing price of $16.06.
BetRivers remaining ‘flexible’ in Illinois
It is not totally set in stone how BetRivers plans to offset the per-bet tax that began in Illinois on July 1. The tax is 25 cents on every wager up to 20 million annual bets and 50 cents thereafter.
So far, BetRivers has raised its minimum bet in the state to $1.
“And then on Illinois, just in terms of the strategy there so far, we haven’t shared plans yet on exactly what we plan to do,” Schwartz said. “We’re trying to make sure that we’re blending goals of a great player experience, but also appropriate economics for us.
“What we have done to date is we’ve moved the minimum bet up to $1. So that’s the move thus far, but we’re remaining flexible to figure out the right way to approach it as we get towards NFL season.”
DraftKings, FanDuel and Fanatics all plan to pass the cost onto the bettors, while BetMGM and Hard Rock have implemented bet minimums like BetRivers.
Q2 by the numbers
Adjusted EBITDA grew 88% to $40.2 million in the second quarter. That came on $269.2 million in revenue, which grew 22% year-over-year.
Online casino revenue grew 25% while online sports betting revenue increased 15% over last year. RSI had a record number of first time depositors in North America while also spending just 14% of revenue on marketing, which is the lowest percentage RSI has reported as a public company, Sauers said.
Monthly active users in North America rose 21% to 197,000. Average revenue per monthly active user in North America hit an all-time high of $391 compared to the previous high of $384 hit in the second and third quarters last year.
Latin America saw monthly active users grow 42% to 403,000. The average revenue per monthly active user in Latin America fell to $30, which Sauers said was hurt by higher bonusing in Colombia.
