A legal sports betting and entertainment company has decided to exit a depleting market.
On Monday, Rush Street Interactive and the Connecticut Lottery Corporation announced a joint plan to dissolve their online and retail sports betting partnership. In 2021, RSI secured a 10-year deal to serve as the CLC’s exclusive provider of sports betting systems for online and retail wagering.
“We thank the CLC for their partnership,” said RSI CEO Richard Schwartz. “Consistent with our long-term strategic goals, after much deliberation and discussions with the CLC, we believe it is in the best interest of RSI and our stockholders to wind down this partnership.”
RSI brands include BetRivers and PlaySugarHouse. The company has an existing online and/or retail presence in 15 states across the U.S., including Colorado, Virginia, Indiana, Pennsylvania, New Jersey, Michigan, New York, and West Virginia.
RSI will continue to operate retail shops and online sports betting sites in Connecticut until the state’s lottery selects a new sports betting operator. A new operator is expected to be selected in H2 FY2023.
Previously placed online and retail wagers through RSI in Connecticut will be honored despite the recent decision. RSI will keep all remaining bets valid and will pay out wins appropriately.
RSI’s decision to exit the Nutmeg State comes after lukewarm results for sports betting in Connecticut. The state's Department of Consumer Protection reported that the state’s sports betting handle in February fell 18.7% to $136.5 million. In January, Connecticut had a handle of $167.7 million.
Gross gaming revenue reached $8.55 million in February, down from $14 million a month prior.
Connecticut has awarded sports betting licenses to several major sportsbooks including DraftKings, FanDuel, BetMGM, PointsBet, Barstool Sportsbook, Caesars, Betway, and WynnBet.
Driving profits
RSI is ending its partnership in Connecticut as the company chases profitability. It expects to turn a profit for the first time in the second half of 2023.
The company generated $166 million in revenue in Q4 2022 — a 27% increase year-over-year. Full-year revenue for the Chicago-based company reached $592.2 million in 2022 — up 21% compared to the year prior.
The strong results were driven by growth in RSI’s North American and Latin American markets.
Despite the fourth-quarter and full-year revenue uptick, RSI reported a net loss of $38.6 million in FY2022, a significant jump from a net loss of $19.5 million in 2021. RSI expects to turn the corner in the second half of 2023 with the help of new market access in Maryland and Ohio.
