SBC Summit: Rush Street CEO Schwartz says company “open-minded” about interest from potential buyers

May 11, 2023 9:07 AM
Photo: CDC Gaming Reports
  • Rege Behe, CDC Gaming Reports
May 11, 2023 9:07 AM
  • Rege Behe, CDC Gaming Reports

At the end of a wide-ranging conversation with Rush Street Interactive CEO Richard Schwartz Wednesday, CNBC correspondent Contessa Brewer asked a direct question.

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“There’s been a lot of speculation about who’s up for grabs,” Brewer said in a Leaders Keynote session at SBC Summit North America at the Meadowlands Exposition Center in New Jersey. “RSI comes up in a lot of my conversations. Are you fielding a lot of interest from potential buyers?”

Schwartz at first replied that RSI is “very valuable. We built it for ourselves. We built technology that works well and delivers the retention that you need.”

But while not admitting the gaming operator is available, Schwartz acknowledged that thanks to RSI’s liquidity – the company has $150 million in the bank and expects revenue to approach $700 million this year — anything is possible.

“We have an obligation to shareholders to get the best return we can,” Schwartz said. “So we’re always open to evaluating opportunities. We build tremendous systems that if we had a larger scale, there’d be some benefits as well. We have to be open-minded. But at the end of the day, we have a very clear path.”

That clear path includes providing gaming in Mexico, Colombia, and possibly other countries in South America, including Peru and Argentina. In 2018, Rush Street became the first U.S. gaming company to launch a regulated online sportsbook in Colombia. In 2022, the operator partnered with Mexican media conglomerate Grupo Multimedios to bring its online-gaming platform to the country.

“Would you rather focus on Iowa with four million people, sports betting only, with half the database already in their daily fantasy database?” Schwartz hypothesized. “Or would you rather go to a place like Mexico with 130 million people, less competitive pressure, and a chance to be one of the early entrants in that market?”

Schwartz told Brewer that the decision to enter Latin American markets was made after realizing that many on Rush Street’s management team had international gaming backgrounds.

The key in those markets was to build localized gaming experiences.

“The banks you use, the payments methods, the way you present your brand, everything has to be done from scratch,” Schwartz said. “If you just try to transplant something there, it’s not genuine.”

Schwartz also noted that RSI, unlike some of its peers, is committed to promoting poker. Notably, 10 years ago the operator launched “Poker Night in America,” a show broadcast on CBS Sports Network. Earlier this week, Rush Street announced that starting May 15, “PNIA” will be broadcast from a private mansion in Las Vegas, with games featuring celebrities, athletes, and poker professionals.

“It will be fun, recreational,” Schwartz said, adding that the games will be low stakes. “We want them to just enjoy talking to each other and talking about sports on TV. … We’re trying to create fun in a poker environment and having a mansion in Vegas where people can come and play, talk and engage, will help us build our brand awareness throughout the country.”