RSI Q2 revenue soars 89% as firm inks bumper Connecticut Lottery deal

Rush Street Interactive (RSI) has reported an 89% year-on-year increase in revenue to $122.8m for the second quarter of 2021.

Releasing its financial results for the period, the BetRivers sportsbook and SugarHouse casino operator revealed net losses contracted 72% from $50.6m in Q2 2020 to just $14m this past quarter.

Company adjusted EBITDA losses hit $6.6m, compared to a positive adjusted EBITDA figure of $3.7m during the second quarter of 2020.

RSI’s Q2 marketing and promotional spend of $36.9m accounted for 30% of the firm’s revenue, skyrocketing 398% from the $7.4m spent in Q2 2020.

US real-money monthly active users (MAUs) increased 128% YoY, with average revenue per MAU of $377. RSI has confirmed unrestricted cash and equivalent finances of $361m as at the end of June 2021.

As a result of the positive revenue upsurge, RSI has raised its full-year 2021 revenue guidance to between $465m and $495m, a figure that would be up 72% when compared to 2020’s figures.

“This increase reflects RSI’s strong first half 2021 results and anticipated growth in recently opened and existing markets resulting from increased marketing spend funded with cash on hand,” RSI said.

In tandem with the positive results, RSI has promoted co-founder and president Richard Schwartz to the CEO role, effective immediately, with fellow co-founder and current CEO Greg Carlin transitioning to a vice chairman position.

Discussing the company’s performance, Schwartz said he was “very pleased” with the continued execution of the firm’s long-term strategy.

“In addition to successfully growing revenues in existing markets, we have made significant progress in securing access opportunities to new markets,” Schwartz explained.

“Our ongoing commitment to improving the player experience by enhancing the quality of our mobile apps and sites, coupled with solid execution on our marketing programs, has led to continued impressive paybacks, along with strong conversion and retention rates.

“The strength of these metrics and efficiency of our marketing efforts supports our confidence in the long-term success of the business,” he added.

RSI has also confirmed the signing of a 10-year sports betting partnership with the Connecticut Lottery Corporation (CLC), to serve as the lottery’s sports betting partner when the state launches later this year.

Under the terms of the agreement, RSI will be the CLC’s exclusive provider of sports betting system for mobile, online, and retail channels, as well as the operator of the CLC’s mobile/online sportsbook.

Subject to receipt of a license from the Connecticut Department of Consumer Protection, CLC, in partnership with RSI, will have the right to operate a state-wide online sports betting skin and up to 15 retail sports betting locations throughout the state.

The CLC is one of only three entities in Connecticut with rights to operate mobile and retail sports betting, and is the only with the ability to operate retail sports betting outside of tribal territories, operating more than 3,000 retail outlets.

Eleven of the CLC’s 15 sports betting retail locations will be located in seven of the state’s 10 most-populous cities, serving more than a quarter of Connecticut’s 3.6 million inhabitants.

RSI is understood to have guaranteed a revenue share payment of $170m to the state as part of the deal, far in excess of the $95m required as part of the tender process.

A total of 15 operators registered their interest to become the CLC’s partner, with five ultimately lodging bids.

CLC president and CEO Greg Smith said he was looking forward to working with the team at RSI.

“We had 15 quality proposals from well-established gaming companies, and RSI rose to the top through the combination of its experience and commitment to quality products, customer service, and responsible gaming safeguards,” Smith explained.

“We’re excited about this partnership and know our players will be getting an excellent product and customer service,” the CLC CEO added.

RSI will face competition from US heavyweights DraftKings, which partnered with the Mashantucket Pequot Indian tribe in 2020, and FanDuel, recently confirmed as sports betting partners of the Mohegan tribe following the tribe’s decision to end its agreement with Kambi.