Online casino-focused Rush Street Interactive rallied in premarket trading Tuesday morning on Monday‘s initiation of coverage by Stifel.
Jeffrey Stantial opened coverage of RSI with a buy rating and a $34 price target. That implies 51% upside from Tuesday’s opening price of $22.52.
Rush Street Interactive has “unique scarcity value” as it is the only publicly listed company with a focus on the U.S. online casino industry, Stantial said, which means the company deserves a premium valuation. Despite intensified competition in online casino in recent years, the BetRivers parent has continued to have industry-leading monthly active user growth while improving its marketing efficiency since early 2025, he added.
The success expands beyond the U.S. and Canada, too, with Rush Street taking market share in high-growth Latin American markets including Colombia, Mexico and Peru.
Online casino should get easier to sell
Stantial noted that just 12% of the U.S. population has access to online casino in seven legal states plus Maine, which is pending launch.
Many legislators are still concerned about cannibalization of land-based casinos as well as the concerns of putting a 24/7 casino in their constituents’ pockets, but those arguments may soon lose to the simple issue of needing cash.
Stantial backed that up by pointing out the increased push to legalize since 2024. After just four online casino bills nationwide in 2022 and three in 2023, the next three years saw 11 bills, eight bills and 16 bills, respectively.
“While our view is political opposition is unlikely to go away, we argue the decision to legalize gambling is foremost a fiscal one and secularly worsening budget deficits in many states is likely to recatalyze expansion, at some point,” Stantial said. “… We also note gambling expansion historically tends to come in waves, as cross-border tax revenue cannibalization becomes a powerful argument for legalization proponents.”
RSI has online casino market access in 15 states that are not yet legal. Those include potential 2027 movers Indiana, Ohio and Virginia.
No ‘secret sauce’ for Rush Street
Stantial said one question he gets frequently is how to explain Rush Street’s online casino success, given that BetRivers lags behind others in brand awareness and its opportunity to cross-sell customers into casino is more modest compared to online betting giants DraftKings and FanDuel and regional casino operators Caesars, MGM and Penn.
Part of the success can be attributed to Rush Street’s focus on high-worth online casino players, which has led to a “differentiated and adaptive marketing strategy,” Stantial said. That includes live-stream giveaways on social media.
“We don’t see a single ‘secret sauce’ explaining RSI’s success, and attribute it to a combination of differentiated personalized retention bonusing strategy, dynamic marketing channel allocation, quality owned CRM tech, retail & social gaming cross-sell assets, solid customer support, and a culture of genuine innovation (not just fast following) instilled at the top by CEO Richard Schwartz who himself holds 50+ patents in gaming,” Stantial said.
Those bonusing strategies include in-game features such as free play, extra spins, and jackpot-based bonus rewards instead of simpler free play offers from other operators.
Beat & raise consistency
Since RSI went public, it has beaten its adjusted EBITDA estimate in 17 of 18 quarters and raised that guidance in all but one quarter since the fourth quarter of 2023.
That is rare, Stantial notes, and it speaks to the “structural stability” of online casino cash flows and RSI’s execution.
There is no reason to expect that estimate momentum to stop, either, he adds. Consensus estimates expect revenue growth in the mid-teens percent range, a continued tax hike in Colombia and no state expansion in 2027.
There is an opportunity for lower taxes in Colombia, though, and states will definitely take a chance at legalizing online casino in 2027. Those positive catalysts, combined with RSI continuing its 2026 execution into 2027, would imply upside to that forecast, Stantial said.
Rush Street too expensive to buy?
RSI has been considered an acquisition target basically since it launched, given its technology, social platform and retail footprint across four states through sister company Rush Street Gaming.
The company would be most accretive to Fanatics or FanDuel parent Flutter, Stantial said, but noted DraftKings would be a good buyer, too. DraftKings’ online casino monthly active users share has lagged even after buying Golden Nugget in 2022, which could encourage a “buy vs. build” approach, he added.
Those conversations of RSI being a takeout candidate happened much more frequently when the stock was languishing in the low-single-dollars for years, though. Stantial thinks potential buyers are likely “uninterested” at the current valuation.
