It is great news for the online gaming industry that Rush Street Interactive is expected to enter the profitable stage soon. Having a company like Rush Street Interactive become profitable is a huge positive for the space.
Massive Decrease in Loss
As a new breed of online gaming sites developer and operator, RSI has been looking forward to cutting its early losses and being profitable soon just like the leading brands.
Due to the continued efforts, the $43 million earnings before interest, taxes, depreciation, and amortization (EBITDA) loss in the 1st quarter of 2022 shrunk to $19 million based on the second quarter reports.
With the current pace of RSI, Roth Capital analyst Edward Engel forecasted that operations will result in a positive EBITDA during the second half of 2023.
“While RSI expects 2H22 marketing intensity to reaccelerate vs 2Q22, 1Q22 remains the high water mark moving forward, even alongside launches in Ohio and Massachusetts,” Engel wrote. “This creates a significant EBITDA swing during 2023, and points to rapid EBITDA growth in 2024 and beyond.”
Other Development for RSI
While online sports betting is not currently legal in every state, RSI is hopeful that this will change soon. In the meantime, they are expanding their online gaming products and services to new states just like their rivals, BetMGM and Caesars who are also getting closer to the profitable mark.
As RSI operates under well-known brands – BetRivers and PlaySugarHouse, it becomes widely accessible to a wide range of states, namely, Arizona, Colorado, Connecticut, Illinois, Indiana, Iowa, Louisiana, Michigan, New Jersey, New York, Pennsylvania, Virginia, and West Virginia.
The more favorable results for the coming year can be rationalized as RSI is one of the operators who will benefit from the launching of online sports betting in Massachusetts and Ohio.
While Texas has a low chance of legalizing the same and Florida sports betting is also not expected to go live in 2023, RSI is hoping for a New York boost as voters may approve mobile betting by November.
“We also expect new state launches to slow after 2023. While this limit’s RSI’s medium-term total addressable market, it also accelerates EBITDA margin expansion,” adds Engel.
With the expansion of its online gaming products and services to new states, RSI is on track to become one of the most successful gaming companies in the industry