Rush Street Interactive is hitting the New York Stock Exchange.
The company announced that it will be merging with dMY Technology to make the move happen.
Rush Street is the parent company of BetRivers, one of Indiana’s online sportsbooks.
DraftKings merger mirrors Rush Street’s
Rush Street will be adding to the growing list of online gaming companies that are going public.
DraftKings went public a few months ago after an identical type of merger to what Rush Street is putting together.
Rush Street is being bought by dMY, which is basically an investment company. Diamond Eagle Acquisition Corp., in a similar move, scooped up DraftKings.
In both cases, the buying company renamed itself to fit the purchase. Diamond Eagle adopted the DraftKings name, and dMY will be doing the same with the Rush Street Interactive branding.
The merger will cost dMY around $1.8 billion, so it’s safe to say that the company is expecting big things out of Rush Street’s future.
Rush Street expanding into new states
Rush Street is expecting to pull in $320 million in revenue during 2021.
That revenue will flow in from the states that BetRivers has already launched in. At least for now, that means the following:
- Indiana
- Pennsylvania
- New Jersey
- Illinois
- Colorado
According to a presentation showed to investors, Rush Street estimates that the combined market size of those states is about $5 billion.
Taking wagers from day one in new markets will be the goal moving forward. BetRivers was available on the very first day of online sports betting in Indiana, Colorado, Pennsylvania and Illinois.
However, BetRivers doesn’t plan on stopping there. As more states legalize sports betting, the company will try to launch in as many markets as possible.
The bid to buy the company includes a $235 million fund to help the sportsbook grow. By pumping money into a growth strategy like that, dMY is showing that it’s willing to put up some serious cash in order to expand.
Right now, BetRivers has market access agreements in place in:
- New York
- Michigan
- Iowa
- Virginia
Rush Street estimates that those states will add up to a market size of $4.5 billion.
Tapping into that is one of the company’s next steps, but it will take some time. Since those markets are still in their early stages, it will be a while before Rush Street is able to start making money off of them.
BetRivers has done well in Indiana
Online sports betting has been around in Indiana since October 2019.
Ever since then, BetRivers has been one of the state’s key players. Only DraftKings and FanDuel have done better.
Despite the strong showing, BetRivers still has some ground to cover before it catches up with those two top dogs.
In June, DraftKings had a $18.2 million handle, and FanDuel was just under the $7.9 million mark. BetRivers pulled in $1.3 million.
BetMGM and its $1.1 million June handle came close to finally knocking BetRivers out of its top-three spot.
But while the sportsbook side of things may be an uphill battle in Indiana, Rush Street is in prime position to dominate the online casino market.
Online casinos aren’t legal yet in Indiana, but they’re a huge part of Rush Street’s business plan.
The company plans to eventually own somewhere between 12% and 18% of the potential $20 billion online casino market.
So even though Indiana doesn’t have online casinos, that doesn’t mean that it won’t legalize them in the future. Should that happen, Rush Street and BetRivers will be first in line.
Rush Street merging with dMY will help keep the company competitive in all of these new markets. As the number of states with legal sports betting and online casinos grows, expect BetRivers and Rush Street to grow along with it.
