Could Focus on Rush Street Interactive Takeover to Enter U.S. iGaming Market

Rush Street Interactive (RSI) CEO Richard Schwartz mentioned at an industry conference in May that the company is open to evaluating opportunities should potential buyers make a bid for a takeover of the Chicago-based company. Online crypto casino operator has long been seeking to enter the regulated gaming market in North America and could look to acquire the company and its current online casino licenses.

Stake CEO Ed Craven revealed recently that the company is set to make a “large acquisition” in the U.S. gaming market during an interview with The Gaming Update. No other details were provided, but many experts believe it could mean the company is finalizing a deal to purchase REI and make its first entry into the North American online gaming market.

Eilers & Krejcik Gaming noted in the most recent edition of the “EKG Line” report that RSI would be a logical fit, given that its been up for sale for a couple of years and is one of the few companies of its size that’s regulated and holds licenses in several U.S. states. Stake has pending applications to operate online casinos in Ontario and is awaiting approval to enter the Australian internet betting market.

Rush Street Interactive Nears Profitability

RSI has a current market capitalization of $651.99 million, making it an attractive takeover target for many potential buyers. The company’s forecasted revenue for 2023 is $700 million, putting it close to profitability, and it has cash reserves of $250 million. Shares are down over 46% over the last year, closing at $2.94 at the end of last week’s trading.

RSI operates online gaming under the PlaySugarHouse and BetRivers brands and has licenses in Colorado, Indiana, Iowa, Illinois, Michigan, New Jersey, New York, Pennsylvania, Virginia, and West Virginia. The company is licensed to provide sports betting in Ontario, making its portfolio attractive to any potential buyer.

Besides its North American operations, RSI offers potential suitors access to markets outside the U.S. and Canada. It opened two offices and launched online operations in Colombia in 2018 and entered the Mexico online gaming market in 2022 under an agreement with media giant Grupo Multimedios. Other Latin American markets that could be next for RSI are Argentina and Peru, making the company even more appealing for a potential takeover.

Stake Hopes to Become White Market Operator is considered by the online gaming industry as a gray market operator, meaning that it’s on par with its white market equivalent but not officially regulated and licensed. However, it’s known to be safer than black market competitors. The good news for Stake is that many providers have recently transitioned from gray to white in various worldwide markets.

According to EKG, may have looked at making details in the skill gaming and fantasy sports industry, but none of the companies considered could be identified. Regarding a takeover of RSI, Stake has more than enough resources to make a substantial offer. The company generated $2.6 billion in revenue in 2022, more than the $2.2 billion made by DraftKings. Stake has over six million registered users residing in large markets like Japan and Brazil, with 10% of those accounts currently active.

Now that PointBet’s assets are off the market after it recently accepted a $225 million offer from Fanatics, takeover speculation will shift to RSI, which may be close to finalizing a deal in the coming weeks.

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