Rush Street Interactive (RSI) will become the latest US sports betting company to be publicly listed on the New York Stock Exchange.
RSI confirmed this week that it is merging with special purpose acquisition company dMY Technology Group.
The merged company is valued at roughly $1.8 billion.
Merger expected to bring enhanced products, market access
RSI is currently active in online gaming and sports betting under the BetRivers and PlaySugarhouse brands in five US states:
• New Jersey
The merger includes more than $235 million in cash “to fund growth strategy.” That strategy includes increased betting market access as legalization continues its momentum across the country.
The merger is expected to close this year. RSI Board Chairman Neil Bluhm will remain at the helm. Greg Carlin will continue as CEO, and Richard Schwartz will retain his role as president.
Joining the Board of Directors will be dMY Chairman Harry You and CEO Niccolo de Masi, according to a media release. The merged company will utilize the RSI brand.
“We started RSI in 2012 to create a fun and engaging online experience for the US gaming customer and we now have a great opportunity to accelerate our growth in this dynamic market,” said Carlin in a statement.
“We are looking forward to investing further in market expansion, product innovation, and growing our talented team.”
RSI officials expect the partnership to “enhance and broaden” their betting products. RSI projects it will earn $320 million in revenue during the 2021 fiscal year.
Its customer base will be boosted in “the expanding US market” by increased growth capital, noted de Masi.
RSI expects to now be at the forefront of each new market that becomes available. Targeted states have values that stretch into the billions.
In addition, RSI is in a strong position near the front of the online casino market. The company would be a major player if Indiana at some point legalizes online casinos.
It is unlikely, however, to wrestle away the top sportsbook spots from DraftKings or FanDuel.
RSI follows in DraftKings’ footsteps
DraftKings has been a major story of the COVID-19 pandemic.
The timing of those headlines, during a shutdown of American sports, is ironic.
But that doesn’t change the importance of the sportsbook’s recent moves. And it doesn’t lessen the impact it has had on the sports betting industry.
DraftKings went public in April in a route nearly identical to RSI.
In that case, Diamond Eagle Acquisition Corp., another blank-check company, agreed to pay $2.7 billion in cash and stock. In return, it acquired DraftKings and tech supplier SBTech.
DraftKings stock has since been one of the closest-watched stocks both inside and outside sports.
The stock closed at $34.79 Thursday night. That’s down from a peak of $43.70 in June, but overall the stock has shown significant growth in recent months.
Concerns about volatility still exist with DraftKings, but there is no denying its upside.
That holds true for RSI, which will almost certainly go public at a much more sports-friendly time than DraftKings’ first appearance on the stock exchange.
And while RSI is unlikely to generate the same level of national dialogue as DraftKings, expect it to become a favorite of gaming-industry watchers.
All we can ask now is, who’s next?