RSI CFO: Diversified revenue means NFL results will be less impactful

Rush Street Interactive (RSI) CFO Kyle Sauers has claimed the operator is insulated from customer-friendly NFL results due to the diversity of the firm’s revenue streams after revised Q4 expectations were pushed into the spotlight last week.

Speaking at the 27th annual ICR Conference in Flordia, Sauers was asked about how sports results impacted the operator, after Flutter reported it was due to take a significant hit to revenue, GGR and adjusted EBITDA in Q4.

On January 8, Flutter said customer-friendly NFL outcomes could lead to US Q4 revenue being down $643m and adjusted EBITDA to face a blow to the tune of $360m.

The FanDuel parent company noted that in the NFL, favorites had won 72% of the first 256 games of the season, with the business losing $74m alone on December 30 following the Detroit Lions’ win over the San Francisco 49ers.

However, Entain, which owns one half of the 50-50 BetMGM JV in the US, said that despite the customer-friendly results, it was maintaining its previous guidance.

Entain’s adjusted EBITDA guidance for full-year 2024 is a $250m loss after bosses pegged the past 12 months as an “investment year.”

According to Sauers, favorable NFL results for the 2024 season has little impact on RSI, which operates BetRivers and PlaySugarHouse in the US, due to 70% of its revenue comes from online casino.

The CFO also pointed to RSI’s exposure in Latam where soccer is the most popular sport to bet on, allowing it to be less impacted than its fellow US firms with NFL being a league with just 272 games in a season.

Instead, Sauers said customer-friendly results across several sports could allow for players to use the money from sportsbook winnings on icasino, or a vice versa as part of a cross-sell strategy.

He said: “Obviously sporting outcomes impact the operator and impact the players. This was the good news about the sporting outcomes that are favorable for the players, it fills their accounts.

“Hopefully, they can use that later or use it on the icasino side. For us, about 70% of our revenue is icasino, 30% sports, so it’s less impactful for us.

“The other piece of it is a good chunk, not quite half but approaching that, of our revenue on the sports side comes from Latin America.

“Latin America, as you would imagine, has a lot more of its sporting activity in football, tennis and other sports besides NFL. So, we’ve got a lot more, I’ll call it a balanced portfolio across the Americas between different sports.

“While we prefer underdogs and low scores in the NFL, it doesn’t have a negative impact on us the same way as it might some of our competitors.”

Sauers also lifted the lid on RSI’s market share, detailing where it stood in different regions as well as across its verticals.

The brand has emerged as a strong igaming player in the US and with its RushBet brand has managed to carve out space in Latam as a foreign operator.

Sauers said: “We have solid market share in icasino, call it 8% to 9% blended, obviously some [are] bigger and some [are] smaller.

“On the sportsbook side, we are 1% to 2% generally higher in markets where we have icasino because of the cross-sell. We’re excited about the opportunity for new markets being legalized in the US and in Canada.

“And then we layer in on top of that the opportunity in Latin America where we’ve been growing over 50%. Latin America makes up roughly 15% to 16% of our revenue today; it’s a higher margin market for us.

“Colombia, we estimate 20% to 25% market share. The government doesn’t actually report numbers, [but] we’ve got to do a good job of triangulating around that.”

Sauers went on to note RSI has low single-digit share in Mexico and has only just launched in Peru a few months ago, so the operator is “just getting going there.”

Finally, RSI’s CFO was asked what would interest the operator from an M&A perspective, with the Chicago-based firm owning a majority of its tech stack.

The business does have a sportsbook supplier relationship with Kambi, and CEO Richard Schwartz has previously quashed suggestions the operator go fully in-house.

The CFO did suggest there were aspects of the operation which could be switched from third-party to proprietary, while hinting that further expansion in Latam could come inorganically.

Sauers added: “We and the team at RSI follow the industry very closely. We use a lot of third-party suppliers for all parts of our business. The player account management, the bonusing engine, all the UI, UX – those are all things that we build and own in-house.

“But there are areas where you could add product extension, things like bingo, lottery. There could be game development where we have our own games, where we don’t pay a third-party supplier.

“Those are the kind of things that we look at. It really comes back to we want to make sure that we’re maximizing our financial profile, improving our margins, and some of those things would do that.

“If we can control more of the supply chain and make that a better player experience and at the same time, that’s better economics that fit well into the wheelhouse.”

Earlier this week, RSI announced it had signed poker legend Phil Hellmuth as an ambassador. The company launched BetRivers Poker in Pennsylvania in October 2024.