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Rush Street Interactive Going Public

Rush Street Interactive Going Public
Spencer Platt/Getty Images/AFP

Chicago-based Rush Street Interactive is joining some elite company with its move to become one of three publicly traded sports betting operators in the US. Blank check firm, Las Vegas-based dMY Technology Group Inc. has announced a merger of itself and Rush Street with the end goal of trading the new company on the New York Stock Exchange under the symbol “RSI”. Upon completion of the merger, dMY is rumored to be changing its name to Rush Street Interactive in order to keep the branding momentum the betting provider has gained during this time of legal sports betting expansion in the US.

The value of the combined company is set at about $1.78 billion, which is estimated to be 5.6X Rush Street’s current projected 2021 revenue of $320 million. The move comes in direct correlation with one of Rush Street’s main competitors and one of the biggest DFS providers in the world, who recently went public and ballooned their estimated value to $3.3 billion.

A Bit About Rush Street

Rush Street Interactive is well on its way to becoming one of the biggest sports betting providers in the US. Founded in 2012 by Neil Bluhm, Greg Carlin and Richard Schwartz, all of whom had previously made names for themselves in the gambling industry, Rush Street currently has a presence in New Jersey, Pennsylvania, Indiana, Colorado, New York and Illinois.

Rush Street has been in the online casino business since 2016 when their brand PlaySugarHouse came to market in New Jersey and the company has grown exponentially from there. Rush Street was the first online gaming company to launch online sports wagering in the major markets of Pennsylvania, Indiana, Colorado and, most recently, Illinois.

With a presence in most of the major US markets and brands such as BetRivers and SugarHouse under their umbrella, Rush Street is cemented in as one of the Heavyweight betting providers in the US scene.

RSI is also the first U.S.-based gaming operator to launch a legal and regulated online sportsbook on a national basis in Latin America.

The Deal

As expected, there are many moving parts that come along with a deal to merge two companies and take it public. The combined company expected to have initial enterprise value of approximately $1.78 billion with an estimated $235 million in cash on hand which is expected to be used in the company’s growth strategy.

The majority shareholders of Rush Street Interactive, Neil Bluhm and Greg Carlin keep about 93%. Neil Bluhm, Chief Executive Greg Carlin and President Richard Schwartz will continue to run the new company with Niccolo de Masi and Harry You from dMY taking up the other two board seats.

dMY, which actually went public back in February will reportedly use $230 million it raised in its IPO in combination with $160 million contributed by institutional investors, to complete the Rush Street Interactive transaction. Last week, it was reported the dMY was looking to raise another $150 million to fund the deal, which appears to include Fidelity Management and Research Company among its chief investors.

What the Big Wigs Are Saying

Rush Street Interactive stands to benefit the most from this merger. Neil Bluhm is on record saying, “This transaction with dMY Technology will provide RSI access to growth capital to allow for the expansion of the business in this fast-growing market and we expect it will serve our customers and investors well.”

Greg Carlin is also excited about the deal, recently commenting that: “We started RSI in 2012 to create a fun and engaging online experience for the US gaming customer and we now have a great opportunity to accelerate our growth in this dynamic market. We are looking forward to investing further in market expansion, product innovation, and growing our talented team.”

In the End…

Rush Street Interactive increases its status as one of the big players in the legal sports betting space in the US. With an influx of cash-on-hand, even more, expansion is on the horizon for RSI.

“RSI has achieved leading online casino and sportsbook market positions by focusing on what players want – a high-quality product, helpful customer service, and transparency and honesty,” said Richard Schwartz, RSI president. “This transaction will help enhance and broaden our product offerings and attract more players.”