Poker Legend Phil Hellmuth Talks Role in Rush Street Online Gaming Merger

Posted on September 30, 2020 - Last Updated on October 1, 2020

Rush Street Interactive (RSI), one of the fastest-growing online casino and sports wagering companies in the US, announced a reverse merger with dMY Technology Group in late July. As a result, RSI will become a publicly listed company on the New York Stock Exchange.

The combined company is expected to have an initial value of $1.78 billion. Another interesting twist is the involvement of poker legend and 15-time World Series of Poker bracelet winner Phil Hellmuth. The Poker Hall of Famer is an investor and spoke with PlayUSA about the company, its future, and his unique role with Rush Street/dMY.

Getting in on the ground floor with dMY Tech

Rush Street Interactive is the iGaming offshoot of Rush Street Gaming. The gaming arm owns four Rivers-branded casinos in:

• Philadelphia and Pittsburgh in Pennsylvania
• Schenectady, New York
• Des Plaines, Illinois

RSI has expanded beyond those states and runs online sportsbooks in Pennsylvania, Colorado, Indiana and Illinois. The company also operates online casino gaming in New Jersey and Pennsylvania.

Hellmuth bought a piece of the dMY when it launched earlier this year, considered a “sponsorship money” investment. dMY is a $230 million special purpose acquisition company (SPAC) founded by Niccolo de Masi and Harry You. The company was founded for asset acquisition, stock purchases, and other business combination activities.

“I invested $300,000 and it was a gamble because I could have lost 100% of it had we not selected a company to take public within 18 months,” Hellmuth says. “On the other hand, my $300,000 investment became worth multiples of what I invested when the SPAC traded at $10 a share, now at $15 a share.

“I thought, ‘I trust [company co-founder] Niccolo DeMasi and if he chooses the right company, then I could make a seven-digit return from my $300,000 investment. Even if Niccolo brought in an average company I could triple my money.”

dMy meet Rush Street, Rush Street meet dMY

The announcement that Rush Street and dMY would combine forces came with an additional Hellmuth twist. A relationship with Rush Street CEO Greg Carlin played a part in the merger.

“Who knew that I would come up with the company that we took public?” Hellmuth says. “I knew I was considered ‘influencer money,’ but near the end of a phone call with my friend Greg Carlin, CEO of Rush Street Interactive, he mentioned that they were going to go public through a SPAC.

“I mentioned that I was involved with a SPAC and that my best friend [venture capitalist and businessman] Chamath Palihapitiya had launched two SPACs the week before. I connected Carlin with both, but asked Chamath to hold off and give my team a chance to negotiate for a week or two.”

Both sides asked Hellmuth to vouch for the other in what looked to be close to a $2 billion deal. Both companies took care of Hellmuth for his efforts, similar to “finishing fifth in the 2019 World Series of Poker Main Event.”

That wasn’t a bad deal for the “Poker Brat” when RSI and dMY came to an agreement. (For the record, Kevin Maahs earned $2.2 million last year for finishing fifth at the WSOP in Las Vegas.)

What’s ahead for Rush Street with online casinos and online poker?

No timetable has been announced yet for completing the merger, but Hellmuth sees big things ahead for RSI.

The company has done well in the young Pennsylvania online gambling market and has managed to compete in a crowded NJ industry.

“RSI is crushing it,” Hellmuth says. “We are the number one online casino in the USA, and we are completely regulated and legal. Fifty percent of our revenues come from gambling and fifty percent from sports betting, which is a nice balance. Unlike other companies in our space, we are profitable.”

It’s a little difficult to say if Hellmuth is right on “No. 1 casino” based on reporting in PA and NJ, but it is undoubtedly one of the top operators.

Projections for 2021 have pegged revenue at $320 million and “RSI” is expected to become the stock in October. The success of its online casino gaming differs a bit from companies like DraftKings.

Hellmuth believes RSI will soon be launching online poker, which is legal and live in:

  • New Jersey
  • Pennsylvania
  • Delaware
  • Nevada

Michigan and West Virginia have also legalized online poker, but nothing has gone live yet. US online poker has seen record revenue numbers during the coronavirus pandemic. Hellmuth believes Rush Street will be part of that as the market slowly grows.

“They are 100% planning on online poker,” he says.

With RSI already operating in two of the legalized online poker states, entering the market definitely seems possible. That’s especially true if online poker revenue continues near 2020 numbers. Rush Street already has been approved for online poker in PA.

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RSI momentum from sports betting

Online casino and poker may be important revenue streams, but expanded sports betting also offers big growth opportunities for RSI. While states have been slow in legalizing online gaming in general, sports betting has spread across the country quickly in two years.

In 2018, the Supreme Court struck down the Professional and Amateur Sports Protection Act. That ended a ban on legal sports betting outside Nevada.

Since then, 18 states and Washington D.C. have legalized sports betting. Four states have approved legislation but haven’t gone live yet, and others are considering legalization. In many states, a whopping 80 percent of wagering is from mobile betting.

Hellmuth believes RSI could be well-positioned for the continually growing sports betting market.

“I think that everyone will bet sports online,” he says. “Why have a bookie and phone calls when the bookie may not even be able to pay you every week? Online sports betting offers new bets every few seconds: ‘What will the next play call be? What is the current line on a live game now where one team is up 7 points?”

Beyond RSI/dMY, Hellmuth works with some other companies as well. He enjoys his role on seven advisory boards including: End Game Talent Agency; Lasso Gear; Muzik Headphones; and PrizePicks.

Hellmuth also recently invested $500,000 to help launch a second SPAC (DMYD-UN). He’s also in talks with three companies about a possible online poker and sports betting sponsorship deal. While he may be a poker player, Hellmuth likes his life in the business world.

“I have been looking around for another great company to take public through our new SPAC,” he says. “It’s a business dream to take one of the companies that I’m advising public in one of my SPACs … maybe 2022.”

Photo by World Poker Tour
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Written by
Sean Chaffin

Sean Chaffin is an award-winning freelance writer, reporter, and editor in Crandall, Texas, and serves as site runner for USPoker.com and PokerScout.com. His work has appeared in numerous websites and publications. Sean has covered poker, gambling, and the casino industry for many years, but also writes about numerous other topics. Along with teaching writing and journalism for more than a decade, the Texas A&M University graduate has a deep background in newspaper and magazine publishing. Follow him on Twitter @PokerTraditions. For story tips, email him at [email protected]

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