Rush Street Interactive Q3s
- Revenue up 57% YoY to $123m, net loss $18.9m vs. $26.5m, AEBITDA loss $12.2m vs. $1m.
- Advertising and marketing costs rose to $45.4m (37% of revenue) vs. $17.5m, MAUs up 26% (undisclosed number), ARPMAU $380.
- FY guidance raised to $480- $500m from $465-$495m, 76% YoY growth at midpoint range. RSI has $347m cash on the balance sheet as of 30 September.
- Highlights include AZ launch, New York license, SGPs in all sports betting states, launch of live casino studios in PA and NJ.
App rated: Schwartz said “mobile is king and having a top-rated app” (number 3 in Eilers & Krejcik study) helped “in sportsbook markets (and) we know (that will) have upside in the casino markets”. He added that the current RSI mobile offering was “the only part of our user experience” where there is “some friction that we’re very eager to get rid of” by creating a seamless user experience combining easy log-in, geolocation and player communications. RSI’s performance got the nod from the analysts at Jefferies, who said the “quarter and the increased guidance continue to reflect strong execution and no apparent specific needs within the enterprise”.
Parlay sources: Schwartz said 50% of RSI sports players were betting on single game-parlays and being able to add extra games to SGPs from a central source (Kambi as RSI’s platform provider) made for a “pretty seamless user experience”.
“Some companies are outsourcing the same game-parlay from individual companies to help supplement their core offering. But when you do that you’re really limited in your ability to cross-sell (into) multiple parlays, because you have the parlays coming from different sources. And you have two different platforms providing you a source but (it’s) not organic, you can’t really settle a bet as quickly.”
Unknown province: RSI has launched a free-to-play sportsbook and casino in Ontario to build up brand awareness, but Schwartz said “no one really knows the answer” about how the regulated market might take shape in the province. “My understanding is they will actually be able to convert from the gray market to a regulated legal market environment by applying for the same license that we will be applying for.”
Casino value: With RSI set to ramp marketing spend in Q4, Schwartz said the revenue split in OSB-icasino states was two thirds casino “so I might expect that to shift a little bit towards sports”. “The other thing we’ve pointed out is that in terms of revenue and value, a casino player is worth something like five times what a sports-only player is, and someone who’s in both is (worth) two times more in value. So there’s a lot of value to those states where we have both types of players.”
