In its first official earnings call as a public company, Rush Street Interactive had good news for its investors. The company generated revenue growth of 337% in 2020 to $278 million and became the second largest online casino operator in the US, as measured by gaming revenue, according Eilers & Krejcik, a gaming industry research and consulting company.
Rush Street went public last year after a merger with dMY Technology and started trading on the New York Stock Exchange in late December.
“We achieved that growth as a private company with modest capital and with a small advertising and promotion expense of $56. 5 million,” said Rush Street CEO Greg Carlin Wednesday during the earnings call.
“It also marks the eighth consecutive quarter of sequential growth for Rush Street Interactive,” Carlin added.
In the fourth quarter 2020, revenue was $100.0 million an increase of 260%, compared to $27.8 million during the fourth quarter of 2019. Advertising and promotional expense was $23.1 million in quarter four of 2020, 23% of revenue, compared to $8.7 million during the fourth quarter of 2019.
Net loss was $48.8 million during the fourth quarter of 2020, compared to a net loss of $15.1 million during the fourth quarter of 2019.
While sports betting is getting most of the media attention regarding online gaming growth, Carlin thinks igaming is a better bet, and points to Rush Street’s success in New Jersey and Pennsylvania as proof.
“Online casino generates more revenue than sports betting,” Carlin said, “and we anticipate many states that have legalized sports betting will consider legalizing online casinos as well. . . . Our experience in New Jersey and Pennsylvania is the online casino vertical is considerably larger and more profitable than sports betting vertical.”
Rush Street started 2020 with online gaming operations in four jurisdictions. Last year it added online sports betting in Illinois, Colorado, and Iowa. Two months ago Rush Street launched igaming and sports betting in Michigan, and online sports betting in Virginia. An online casino is planned for West Virginia in the second quarter of 2021, and the company has agreements for market access in Ohio, Maryland and Missouri, pending state and regulatory approvals.
The company’s gaming operations reach 21% of the country’s population; pending approval of its market access deals, that figure will rise to 35%.
“We’ve demonstrated the ability to launch quickly in new markets because of our proprietary technology stack, as well as our strong operations team,” Carlin said. “We launched on the first day in Michigan and Colorado, and we were first to launch in Illinois and Indiana.
Rush Street president Richard Schwartz said the company’s strategy for igaming is to focus on quality bettors instead of high-volume players. Average revenue per monthly active user in the U.S. was $328 during the fourth quarter, and $341 for the full-year, up 73% and 53% for the fourth quarter and full-year 2020.
“We target players who appreciate the premium user experience that we offer, our leading selection of betting content, and all the little things we do for our users to reduce player friction,” Schwartz said.
Schwartz added that marketing efforts will continue to focus on a data driven approach that will meet Rush Street’s ROI targets. Citing partnerships with Pittsburgh Penguins, the Philadelphia Flyers and Detroit Pistons, Schwartz said “we choose to partner with well-known local brands and personalities in combination with national partners that have a great local reach in our key markets.”
Rush Street Interactive shares rose $2.18, or 13.05%, Thursday to close at $18.71 on the New York Stock Exchange. The shares dropped 3 cents or 0.16%, to close at $18.68 in after-hours trading.
