Rush Street Interactive reportedly exploring potential sale, reaches out to DraftKings

Citing unnamed sources familiar with the matter, Bloomberg has reported that Rush Street Interactive is allegedly considering strategic options, including a potential sale. According to the people, RSI has reached out to multiple suitors, including DraftKings, in its exploration of these options. Following the news, shares of the company rallied late Thursday.

Rush Street, which operates brands including BetRivers and RushBet, declined to comment on the matter when approached by Bloomberg. Meanwhile, DraftKings told the cited source that its general policy is "not to comment on the specifics of any discussions."

Led by Chief Executive Officer Richard Schwartz, Rush Street became a public company through a merger with a special purpose acquisition company in December 2020. Despite reporting sales of $691 million last year, marking a 17% increase from 2022, the company remains a smaller player in the online betting market, accounting for less than 2% of the market share in the 12 months through January.

The potential sale of Rush Street Interactive could mark further M&A action in the online gaming industry, which has seen several transactions in recent years. Rivals like Churchill Downs and PointsBet Holdings have exited the US business, while DraftKings acquired Golden Nugget Online Gaming from billionaire Tilman Fertitta in 2022.

Speculation about Rush Street Interactive being an acquisition target is not new, with rumors dating back to at least 2021. The company's strong financial performance and expanding footprint in the iGaming market make it an attractive target for potential buyers.

Operating under the BetRivers and PlaySugarHouse brands, Rush Street Interactive offers online betting services in 15 US states and three other countries, including mobile and retail businesses. The company's presence in the fast-growing market of Latin America, with operations in Mexico and Colombia, could further enhance its appeal to prospective buyers.

Should Rush Street Interactive proceed with a sale, the price is expected to exceed its current market value, with potential buyers willing to pay a significant premium given the company's strengths in the iGaming sector, including a newly cemented monopoly in Delaware.

With a market capitalization of $1.32 billion as of Thursday's close, Rush Street Interactive could attract interest from a wide range of larger rivals, including the aforementioned DraftKings, as well as other companies looking to strengthen their position in the online gaming market.