Rush Street Interactive (RSI) came as close to reporting net income at the end of a quarter as it ever has, and the company credited much of the improvement to its US online casino operations. Many of RSI’s other important metrics showed growth during the second quarter of 2024 as well.
As acquisition rumors continue to circulate regarding RSI (NYSE: RSI), this update could point to one of two outcomes. Either a transaction is imminent or RSI has shown that it might eventually become the party doing the buying.
Rush Street Q2 earnings show more progress toward profitability
RSI is the online gambling arm of Rush Street Gaming. While it offers online gambling products in several other countries, in terms of the US, RSI currently provides online casino play and/or online sports betting in 15 states with the BetRivers and PlaySugarHouse brands.
According to a July 31 statement from RSI, second-quarter revenue for the company grew by 34% compared to RSI Q2 2023 earnings. The 2024 total came to $220 million.
Isolating the analysis to Ontario and the United States, RSI’s monthly active user count increased by 24% in the same comparison. Among those users, the company’s average revenue was up, too, by 6%.
The number that might be most striking, however, is that RSI posted a net loss of $300,000. That’s an 82.1% improvement from Q2 2023 and the closest the company has come to reporting net income for a quarter.
In its presentation to investors, RSI emphasized its position in the US online casino market. It’s no coincidence RSI had arguably its best quarter ever in light of that position.
RSI shares positive updates regarding online casino products
RSI wasn’t bashful about its US online casino metrics over the past quarter. Its presentation claims that revenue for the company from that segment improved by 40% compared to Q2 2023. Furthermore, RSI says that it is in the top four online casino operators by revenue estimates in Michigan, Pennsylvania, and West Virginia.
RSI added that according to estimates, it currently ranks No. 8 of 29 operators in New Jersey. According to those estimates then, RSI is in the top eight of all four of the most lucrative US markets for online casino play.
While that horse race might be encouraging to investors, what’s more important for the business’ long-term health is that it is close to indisputable profitability at its current scale. That changes the acquisition conversation.
Is RSI still an acquisition target?
Unconfirmed reports of RSI shopping itself or a competitor kicking the tires have surfaced multiple times over several years. The company’s growth has been part of what has made it attractive.
At some point, however, that chatter will subside. That will either be a result of a buyout/merger actually happening or because RSI progresses to where the tables turn.
If a transaction is going to happen, time could be of the essence for the other party. The better RSI performs, the more it will cost a partner to hitch the wagons.
On the other hand, it might already be too late for any company looking to swoop in, as the cost to acquire RSI might already be too high compared to a budget for expansion by acquisitions. Future earnings reports out of RSI might instead include discussions of RSI’s dealings during the period.
RSI is showing how a well-executed online casino strategy can take an online gambling company to profitability. There’s no guarantee that the company will maintain its improvement at the same rate moving forward, but its current accomplishments are worth touting.