Rush Street Interactive acquires Run It Once Poker for $5.8m in cash and stock

US operator Rush Street Interactive (RSI) has added poker to its sports betting and casino offering by snapping up proprietary poker site Run It Once Poker.

The deal, which was revealed during the Chicago-based company’s Q4 and full-year 2021 results presentation, consists of $3.3m in cash and $2.5m in stock.

RSI has an in-house-built casino platform, along with a sportsbook powered by Kambi, yet this will be the operator’s first foray into the poker vertical.

As well as acquiring Run It Once Poker’s technology, the three-year-old poker site’s team has been integrated into RSI.

The New York-listed operator emphasised on the earnings call to investors that the acquisition was about diversifying the business and enhancing cross-sell to its sportsbook and casino.

RSI CEO Richard Schwartz said: “We really were impressed by the management team, including the company’s principal, Phil Galfond, who is one of the most respected poker players in the world.

“Our plan is to leverage the innovative poker mind from the Run It Once team, along with RSI’s product team, as led by executives with many years of experience developing industry-leading and highly scalable poker platforms.”

While no timeline for a launch or a particular target US state was revealed, Schwartz said the plan is to “integrate the poker vertical into our proven platform when the market is ready”.

There are currently just five states with live and legal online poker – Nevada, Delaware, New Jersey, Pennsylvania and Michigan – although the hope is more US jurisdictions will legalise the vertical and join up to pool liquidity.

RSI is currently live with online casino in Michigan, New Jersey, Pennsylvania and West Virginia, the latter of which has passed online poker laws but its population of under two million has thus far made it unattractive among operators for intrastate poker.

Connecticut, where RSI has a 10-year contract with the state’s lottery to run retail and digital sports betting, has also legalised online poker.

 As for Run It Once Poker, founder Phil Galfond, who is a well-known figure and high-stakes player in the world of poker, took the decision to close the site at the end of 2021.

The American said in a blog post that he and his team had “poured their hearts, minds and souls” into the venture but that the “hill was too steep”.

Therefore, the decision was taken to shut the product and “pivot” operations to try to gain entry to the regulated US market.

Based out of Malta, Run It Once Poker held licences with the Malta Gaming Authority and the UK Gambling Commission.

While the standalone platform was praised for its innovative features, such as dynamic avatars and its Splash the Pot rewards system, the lack of tournaments meant it struggled to appeal to recreational players.

In a Twitter thread posted after the RSI announcement, Galfond said he had spoken to “many potential partners over the last 18 months” but that RSI stood out.

Run It Once Poker’s platform and team, myself included, were acquired by Rush Street Interactive (RSI), with the plan to solidify, enhance, and integrate our software into their platform. (2/6)

— Phil Galfond (@PhilGalfond) March 3, 2022

Meanwhile, RSI posted full-year 2021 revenue of $488m, which was a rise of 75% over the previous year. Adjusted EBITDA for 2021 was a loss of $65.1m.

Revenue of the fourth quarter rose 31% year-on-year to $131m, while adjusted EBITDA was a loss of $31.2m.