Speaking about the quarter, CEO Richard Schwartz says the figures reflect the business’ long-term growth and expansion strategy. He adds Rush Street Interactive is now a leading igaming operator while its online sports betting offering continues to grow.
Rush Street Interactive could be set for even further igaming success on the back of recent news in Delaware. In August, it was selected to power the Delaware State Lottery’s igaming offering. It will provide its igaming solution for an initial five-year term, with plans to launch before the end of 2023.
Schwartz says that developments such as this demonstrate that Rush Street Interactive is constantly working to expand its business.
“Our Q3 results offer further evidence that we continue to grow in very competitive markets with a remarkable success and resilience,” Schwartz said. “We have multiple opportunities to grow our business and we’re disciplined in how we execute our growth.
“Looking ahead, expanding our footprint, we announced exciting news in August in that we were selected by a Delaware Lottery as their exclusive online provider. We are targeting to launch by early winter.
“As discerning consumers seek out the best products and user experiences, our Q3 results affirm our ability to deliver on both counts as we continue to acquire, engage and retain customers.”
Rush Street Interactive increases market share
Analysing the Q3 performance, Schwartz picked out a number of highlights for Rush Street Interactive. These include how it was able to increase its market share in several key markets.
Quarterly online casino share in New Jersey and Michigan is higher than at any time over the past year. Elsewhere, its share of the West Virginia online casino market is at its highest since Rush Street Interactive launched in the state.
The business is also seeing similar trends in its sportsbook operations. Sports betting market share across Michigan, Virginia, New York, Maryland and Ohio are all at the highest level since launch. In addition, market share in Pennsylvania and Indiana are at their highest for 18 months.
Edging closer to the black in Q3
Revenue growth in Q3 was coupled with higher costs, as Rush Street Interactive sought to grow its business. Total operating costs were up 7.7% to $181.6m, with the main outgoing revenue costs at $116.2m.
The business noted an additional $762,000 in interest income, meaning pre-tax loss was $10.9m, an improvement on $20.8m in 2022. Rush Street Interactive paid $2.4m in tax and also discounted $9.2m in losses from non-controlling interests.
As such, net loss for Q3 was 36.4% lower at $4.2m. In addition, the business was adjusted EBITDA-positive at $4.1m, compared to last year’s $12.5m loss.
Hopes high for full-year positive adjusted EBITDA
As for the year-to-date, revenue in the nine months to 30 September was $497.3m. This is 16.6% ahead of $426.7m at the same point last year.
Operating expenses for the period were 4.3% higher at $545.4m. Interest income reached $1.4m, leaving a pre-tax loss of $46.7m, compared to $97.1m in 2022.
Tax payments totalled $6.2m and Rush Street Interactive took off $73.6m losses from non-controlling interests. As such, net loss for the period was $16.6m, shorter than last year’s loss of $29.6m.
As for adjusted EBITDA, this stood at a loss of $3.3m. However, given the improvement on the $74.5m loss in 2022, Rush Street Interactive is hoping to post positive adjusted EBITDA for the full year.
As for full-year revenue guidance, this has now been tightened slightly. The business says its revenue should be between $665.0m and $685.0m, the midpoint of which ($675.0m) would be 14.0% higher than $592.0m in 2022.
“Given our outperformance during each of the three quarters of this year, we now expect to be adjusted EBITDA positive for the entire year well ahead of our original plans,” Schwartz said.
“We will continue to innovate and leverage our insights to develop and offer our customers differentiated and fun experiences that appeal to them while continuing to achieve sustainable growth and profitability.
“Altogether, we are where we want to be… well positioned for future revenue and profitability growth in the future.”