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RSI raises full-year revenue guidance after Q3 growth


Rush Street Interactive (RSI) has raised its full-year revenue guidance after reporting year-on-year growth during the third quarter of its 2021 financial year.

Revenue for the three months to September 30 reached $122.9m, up 57.2% from $78.2m in the same period last year.

Much of this increase was down to RSI’s growth and expansion efforts during the quarter, including securing the third and final sports wagering skin in Connecticut through a 10-year deal with the Connecticut Lottery Corporation (CLC) and fully launching this offering.

RSI also confirmed the full launch of its BetRivers online sportsbook in Arizona after it was issued a license in the state, while the operator was also selected as one of nine mobile betting licensees in New York.

The operator launched and branded, live-casino studios for players in Pennsylvania and New Jersey, while it also entered the Canadian market with the roll-out of its social gaming and sportsbook platform Casino4Fun in Ontario.

In addition, RSI was named as the official betting partner of Magic City Jai-Alai and it made a minority investment in game developer and technology provider Boom Entertainment.

“We are very encouraged by the ongoing execution of our business strategy across the entire organization; new market access and launches have continued to be a significant driver of our overall success,” said Richard Scwartz, who was also named as chief executive of RSI during Q3.

“In addition to growing our current markets, we have worked to expand our bet offerings to existing customers. Single-game-parlay markets are now live in all of our sports betting states and we have launched and branded, live-casino studios for players in Pennsylvania and New Jersey.”

Turning to costs for the quarter, operating expenses increased 34.3% year-on-year to $140.6m, mainly due to a 72.4% rise in the cost of revenue and a 163.4% hike in advertising spend, though this was partially offset by a 68.8% drop in general and administrative expenses.

RSI only reported minor financial costs amounting to $11,000, which left a pre-tax loss of $17.7m, an improvement on the $26.5m loss posted last year, but adjusted earnings before interest, tax, depreciation and amortization (EBITDA) slipped from a positive figure of $997,000 to a loss of $12.2m.

RSI paid $1.2m in tax, resulting in a net loss of $18.9m, compared to $26.5m in Q3 of last year. However, when considering that $13.6m of this loss was attributable to RSI’s non-controlling interests, this meant net loss attributable to RSI was $5.3m, much shorter than $26.5m in 2020.

As to how this impacted RSI’s year-to-date performance, revenue for the nine months to the end of September was 100.3% higher at $357.5m.

Costs climbed 54.5% year-on-year to $414.7m, but RSI received $41.8m from the change in fair value of warranties, and while this was partly offset by $13.7m in the change in fair value of earnouts interest viability, total other income amounted to $28.0m.

As a result, pre-tax loss was lower at $29.2m, compared to $90.0m last year, but adjusted EBTIDA reached a loss of $33.9m, compared to a positive of $5.7m in 2020. After accounting for $3.8m in tax payments, this left a net loss of $33.0m, representing a significant improvement on $90.0m of last year.

When considering that $23.9m of this loss was attributable to non-controlling interests, net loss attributable to RSI was $9.1m, compared to $90.0m last year.

RSI’s performance in Q3 led it to raise its revenue guidance for the full-year, with revenue for the 12 months to December 31 now set to reach between $480m and $500m, up from its previous guidance of $465m to $495m.

At the midpoint of the updated range, revenue of $490m would represent a 76% year-on-year increase when compared to $278.5m in 2020.