Rush Street Interactive Eyes Sale, Engages DraftKings
Rush Street Interactive Inc., a prominent figure in the online betting industry, is currently exploring a variety of strategic alternatives, including the possibility of a sale. Insiders familiar with the matter have revealed that the company has initiated discussions with potential acquirers, with DraftKings Inc. being among the approached parties.
Expanding Footprint in the Betting World
Originating from the renowned real estate and casino conglomerate owned by billionaire Neil Bluhm, Chicago-based Rush Street has significantly extended its reach in the digital betting arena. Presently, the company operates its online betting services across 15 states within the United States and in three additional countries. Last year, Rush Street reported an impressive revenue of $691 million, marking a 17% growth from the previous year.
Despite its achievements, Rush Street finds itself in a highly competitive online market, primarily dominated by giants such as DraftKings and FanDuel, a subsidiary of Flutter Entertainment Plc based in Ireland. According to the latest figures from Eilers & Krejcik Gaming, Rush Street holds less than 2% of the online sports betting market, ranking it in sixth place for the 12-month period ending in January.
The online betting landscape in the U.S. has seen several significant players withdraw, including Churchill Downs Inc. and Australia’s PointsBet Holdings Ltd. Notably, billionaire Tilman Fertitta divested his Golden Nugget Online Gaming Inc. to DraftKings in 2022.
Under the leadership of CEO Richard Schwartz, Rush Street transitioned into a publicly-traded entity following a merger with a special purpose acquisition company (SPAC) in December 2020. Although the company’s shares once soared above $25 in January 2021, the closing price recently stood at $6.12, valuing Rush Street at approximately $1.4 billion.
Our Comment on the Matter
Rush Street Interactive’s contemplation of a sale underscores the fluid and evolving nature of the iGaming industry. As the market consolidates, smaller entities like Rush Street face the challenge of scaling and sustaining growth amid fierce competition from larger conglomerates. The potential involvement of DraftKings, a major player in the field, could signal a significant shift in market dynamics, potentially leading to enhanced offerings and innovations for consumers. This move could be a strategic effort by Rush Street to leverage its unique assets and position itself more competitively in a rapidly changing industry landscape.
