The most important thing a potential investor in BetRivers parent Rush Street Interactive should know is how “extraordinarily focused” the company is, CEO Richard Schwartz said.
Schwartz, commenting at the Craig-Hallum 5th Annual Online Gaming Conference Tuesday, noted the company is not distracted by prediction market launches or trying to compete at the highest levels of the U.S. sports betting industry.
“We’re focusing on what we know is the engine of our industry, casino, and we’re years ahead, we think, in the player experience,” Schwartz said.
The company will launch some features next year that are “really compelling, unique, never seen before” in the gaming industry, he said. Those will be added to a BetRivers product that continues to grow in mature markets and had a strong enough third quarter performance to raise guidance.
Despite the results, RSI’s stock fell following earnings, with the stock closing down nearly 9% at its lowest compared to its pre-earnings price of $18.17. It has been on the upswing for about a month, though, and closed Thursday at $18.62.
Retention strong at BetRivers
Other online casino operators may say they focus on the player experience, but BetRivers has executed on it since day one, Schwartz said.
“The focus we put and obsession we have on players and making sure that we present ourselves as a thoughtful operator, someone that’s really paying attention to their needs, someone that’s delivering unexpected fun experiences, someone that surprises the players and delights in ways they are not expecting, is something that we pride ourselves on,” Schwartz said. “And when you do that, you have the ability to retain your customers, which we do very well.
“But don’t forget almost all players have multiple accounts with several different operators. So, our goal from day one is how do we get the largest percentage of the wallet, the entertainment budget, spent with our brand versus others?”
Schwartz touted the company’s differentiated, in-house developed features compared to what its competitors offer, noting those competitors are not “developers in their DNA” but more “publishers of third-party games.”
Online casino growth continues
October‘s public numbers and November‘s results to be published later this month should show more of that same momentum, President & CFO Kyle Sauers said. The fourth quarter momentum is continued from the third quarter, which showed record first-time depositors and saw monthly active North American grow 45%.
That growth came despite the company paying less to acquire customers in the third quarter compared to the second.
“You have to have a great product and we’re so confident once people know about BetRivers, RushBet, when they show up they’re going to stick around and they’re going to give us a good amount of their entertainment attention,” Sauers said.
“But we’ve gotten so much better at the reactivation side, filling the top of the funnel. Our marketing team and marketing tools have improved dramatically, but still so much opportunity for us to be better.”
BetRivers improving sports betting, too
Rush Street continues to improve its sports betting product as well, with Schwartz teasing unspecific additional improvements that will be coming soon.
The company focused on the “fundamentals” over the last year, with improvements in live betting and navigation, he added.
Sauers noted that hold percentage grew for BetRivers in the third quarter despite NFL results that led to significant EBITDA hits for most other sportsbooks.
Sports competition coming to DE
BetRivers is the exclusive operator of online casino and sports betting in the state of Delaware, but it is no longer the only destination to make money based on sports outcomes.
Fanatics Markets launched its predictions product Wednesday in multiple states that already have regulated sports betting, with Delaware included.
Schwartz, commenting before the launch, said he expects the Delaware Lottery would respond to any predictions operations in the state. He noted the state worked to get sweepstakes operators out of the state as well as a recent ruling in Nevada that lifted an injunction preventing the Nevada Gaming Commission from taking action against Kalshi for offering sports predictions in its state.
“We continue to perform extraordinarily well in Delaware, far above expectations, you can imagine the state would probably want to make sure that they get the benefits of their consumers betting on sports,” Schwartz said.
BetRivers reported Delaware revenue growth of 74% compared to last year. The gross revenue annual run rate was more than $160 million – more than nine times better than the best quarter of previous operator 888.
Another Latin American market?
RSI has its next Latin American market in mind, but Schwartz did not offer any further details.
Part of the company’s success in the region can be attributed to having dedicated teams, including legal, compliance and finance, for Latin America, he said. Its RushBet brand is live in Colombia, Mexico and, most recently, Peru.
Schwartz noted Peru is off to a similar start as Colombia and Mexico with “really fast growth” including 50% revenue improvement in November over October.
The value-added tax for online casino deposits in Colombia is set to expire at the end of the year and Schwartz does not think it has constitutional support to be included in the fiscal budget. Companies, including RSI, have paid the 19% tax instead of passing it to consumers to not lose market share.
Mexico remains a huge growth opportunity that the company is excited about based on its revenue more than doubling over the past few years despite the online casino gross revenue tax rate climbing to 50% from 30%, Sauers said.
