RSI’s CEO dismisses online casino cannibalization concerns
Richard Schwartz argues for the benefits of consumer choice, as he draws comparisons between the coexistence of movie theaters and streaming platforms
Rush Street Interactive (RSI) CEO Richard Schwartz has suggested land-based and online casino operators can live side by side, as he pushed back against fears over cannibalization.
Speaking at Oppenheimer’s Technology, Internet, and Communications Conference this week, Schwartz argued that consumer choice is a paramount factor for operators and regulators to consider.
Currently, igaming is live in just seven US states: New Jersey, Pennsylvania, Connecticut, Delaware, Michigan, West Virginia, and Rhode Island.
Bally’s holds a de facto monopoly in Rhode Island, while RSI, as the sole contractor for the Delaware Lottery, is the only company able to operate in the First State.
According to RSI’s recent Q2 earnings presentation, RSI is the third-largest igaming operator in both Pennsylvania and West Virginia, and the fourth in Michigan.
Schwartz argued that cannibalization fears should be assuaged from historical evidence in both Europe and Canada.
Concerns over igaming expansion relating to the eroding of legacy land-based casinos has continued to cause friction on legislation.
New York casino workers have been backed by their union over worries that regulated online casinos would impact jobs, although a report earlier this year from analyst firm Eilers and Krejcik Gaming debunked these claims.
Schwartz said: “I’ve looked at the data historically in Europe from when the lottery went online in the UK and in British Columbia where the government owned the land-based casinos and online sites. You see that they both grew hand-in-hand for over a decade together.
“In New Jersey and other US states, you’ve also seen both have grown together. Without a doubt, states get the benefit of more taxes when online gaming gets legalized.
“I think the only argument to make sure that is considered is that when we see many more online competitors come into the market – if the land-based operators don’t have an online solution that is strong, they will lose market share to the online players.”
The CEO went on to note the presence of both land-based and online casinos would serve to benefit consumers, drawing a comparison between visiting a movie theater and Netflix to illustrate why customers would prefer a choice.
He explained: “If you put your head in the sand and ignore it, you’re doing a disservice to your customers. Ultimately, people want choice and you can’t dictate if they are going to play online or land-based. Players want to have the choice and the flexibility to play where they want, when they want.
“Historically, it’d be like people going to the movie theater or watching Netflix. There’s times when you want to get out of the house, meet up with friends, and watch it on the [big screen].
“Whereas at home, you’re going to do it for convenience. It might be a different type of experience that you want.”