RSI CEO rules out taking the sportsbook in-house as Q2 revenue hits $220m

Rush Street Interactive (RSI) CEO Richard Schwartz has insisted there is little appetite to bring sports betting tech in-house and that the operator will continue to use Kambi for the foreseeable future.

Speaking on an analyst call following the Q2 results release, Schwartz was pressed for comment on whether it makes more sense to bring some of the tech RSI does not own in-house.

His answer was an emphatic one, as he heaped praise on RSI’s proprietary tech while noting the benefits of using a third-party supplier in the shape of Kambi for its online sportsbooks, BetRivers in the US and RushBet in regulated Latam markets.

Kambi first struck a supply deal with RSI in May 2018, resulting in RSI’s PlaySugarHouse brand adding a sportsbook to its icasino offering three months later.

Schwartz explained: “We actually own almost all of the tech stack. We’re really heavily invested in all kinds of technology and features from the apps, the player account management system we built.

“The only thing we haven’t brough in-house is our sportsbook platform, which we integrate through Kambi [and have done] for many years.”

The CEO did make clear that though Kambi powers BetRivers and RushBet, it is not without some influence from RSI.

“Our philosophy on that relationship is that we like to get the bread and butter from Kambi, but we have a development team internally that adds our own flavor, our own twist, our own innovation on top of the sportsbook”, he said.

“We get the benefit of a fundamentally strong core technology, and we differentiate by building our own features on top of it.

“There really isn’t a plan to bring in, at the moment, our sportsbook in-house, but everything else we have developed in-house.

“We have a very robust, very thorough, very broad-based technology system in-house, I would say 95% of everything is in-house.”

Analysing the firm’s overall Q2 performance, revenue came in at $220.4m, a record total for the operator and a 34% year on year (YOY) improvement against Q2 2023.

It was a similar story with adjusted EBITDA, with the bottom-line recorded at $21.4m, a $20m increase when compared to the corresponding quarter last year.

With the results released after the markets closed yesterday, July 31, RSI stock has risen almost 18% in pre-market trading.

That increase was driven by a strong performance in local markets, with GGR from Delaware, where RSI is the sole operator as part of a deal with the state’s lottery, reaching $37m during H1 2024.

Bosses claimed the company’s icasino revenue in Delaware was four times more than that of previous sole operator 888 Holdings, since rebranded to evoke.

Revenue from markets outside of Illinois and Pennsylvania contributed to 59% of the topline figure in Q2, the highest contribution since RSI went public in 2020.

RSI also posted record revenue in Latam, where RushBet operates in Mexico, Colombia, and Peru, rising 73% YOY and contributing to 15% of the $220m overall revenue total. 

In what was a strong three months for Latam operations, monthly active users (MAUs) surged 79% YOY to 288,000. MAUs also rose 24% YOY to 164,000 in the US and Canada (Ontario).

Average revenue per monthly active user (ARPMAU) for the US and Ontario increased 6% YOY to $380.

ARPMAU in RSI’s Latam markets dipped 2% compared to last year, down from $38 to $37.

On Latam, Schwartz revealed that there was no urgency to enter Brazil with the regulated market due to go live by January 2025.

He said the company was continuing to evaluate other market penetrations on the continent, having gone live in Peru this week.

He said: “Being the first to launch in [Brazil] is not like winning a gold medal in the Olympics because there’s a lot of operators already operating there for many years that are going to make this transition.

“Rather than being first, it is important to us to be the best when we do decide to enter a market.”

The strong display in Q2 lifted RSI’s full-year 2024 guidance, with adjusted EBITDA now expected to land between $64m and $72m, an increase of the midpoint by $13m.

In a similar vein, revenue guidance has also been updated and is now expected to hit between $860m and $900m by the end of the financial year, a midpoint increase of $45m.

Schwartz added: “The improvement in our results is a direct testament to the strategic decisions we have made over recent years, as well as constantly refining and bettering our approach to attracting and retaining players.

“The efficiency is leading to strong increases in the number and value of our users.”