RSI CEO insists technology is where “the war is won” for operators

Rush Street Interactive (RSI) CEO Richard Schwartz has claimed that technology “is not sexy to talk about” but is the key factor for operators in their search for growth.

Speaking at the 19th Annual Needham Technology, Media, and Consumer Conference in New York, the CEO was adamant that technology was the core capability for the firm in when it comes to customers retention.

RSI, which deploys a proprietary platform, is live across 15 US states and has risen to become one the top challenger brands in market.

At the conference, Schwartz discussed how market offerings within the sports betting and casino verticals often take the limelight with “more parlays, more prop bets, and more variety of bets” – features that generate the most attention.

The CEO elected to deploy a football analogy to deliver his point, in that while markets and betting options are important, it is the underlying tech that will separate the winners from the losers.

Schwartz explained: “To me,  are the stars of the industry. They’re like the quarterbacks in a football match. And we try to use that analogy where everyone wants to talk about the stars, what prop that’s available, what parlays are available, how many are available.

“They’re the position players that get all the attention in sports, it’s the receivers, running backs, quarterbacks, and it’s important, but the war is won in the trenches.”

He continued by comparing technology to offensive linemen in American football, arguing it is not an element of the industry that generates as much discussion but is vital for success.

“I think the equivalent of the offensive linemen in our industry is the technology platform. It’s a business. It’s not sexy to talk about. 

“Most of us just don’t really have a lot of interest in learning about it. But the truth is, that is where you make profits in our industry. It’s how you convert players, and how you automate systems. It’s how you have waterfalls for conversion rates.”

Schwartz went on to add that the years of work that has gone into RSI’s tech are a key reason behind the firm’s success.

The Chicago-based operator posted record first quarter results earlier this month that saw the business generate $217.4m in revenue, representing a 33.9% year-on-year (YOY) rise from Q1 2023’s $162.m.

There was a marked improvement in terms of adjusted EBITDA in the first quarter of the year, with RSI recording $17.1m after an $8.5m loss during the same period last year. 

Schwartz remarked: “I’m here to say that I think a lot of our success has been all these investments we made over a decade on the technology platform and conversion retention and making sure those things are working in a way that players will not feel friction, and in fact be impressed by things we do that they don’t have in other platforms. 

“And so that’s where I think we put a lot of our investment, and we have a dedicated organizational teams focus at every part of the user journey.

“It’s the entire flow through from the beginning when a player lands on our app for the first time, to when they make their first bet, to making the first deposit, and the customer service needs. It’s all those little details that matter.

“I think that’s why we’re able to deliver outsized results, given our much smaller marketing budgets compared to our peers,” he concluded.