Rush Street Interactive (RSI) is set to be the latest US online gambling operator to go public after agreeing a reverse merger with special purpose acquisition company dMY Technology Group.
The merger – approved unanimously by the boards of both businesses and expected to close later this year – will see Rush Street trade on the NYSE with an initial enterprise value of around $1.78bn, using the ticker symbol “RSI”.
“We started RSI in 2012 to create a fun and engaging online experience for the US gaming customer and we now have a great opportunity to accelerate our growth in this dynamic market,” RSI chief executive Greg Carlin said. “We are looking forward to investing further in market expansion, product innovation, and growing our talented team.”
Rush Street’s announcement follows Golden Nugget Online Gaming’s decision to go public on the Nasdaq exchange last month, while DraftKings also traded on the exchange after agreeing a merger with SBTech.
The listed business will include dMY’s chairman Harry You and chief executive Niccolo de Masi on its board of directors. De Masi is also chairman and was formerly chief executive of social gaming provider Glu Mobile.
“With their dozens of years of online casino and sports wagering experience, RSI has developed a leading customer-focused online gambling platform,” de Masi said. “Harry and I are tremendously excited about RSI’s positioning and the long-term growth opportunity they have in the expanding US market.”
Rush Street Interactive, part of Rivers Casino operator Rush Street Gaming, operates the BetRivers sportsbook as well as the PlaySugarhouse online casino brand. BetRivers – which is powered by Kambi’s sports betting technology – was the first operator to take both retail and online sports bets in Illinois, and was the first operator online in Indiana. RSI also operates in New Jersey, Pennsylvania and Colorado.
“RSI has achieved leading online casino and sportsbook market positions by focusing on what players want – a high-quality product, helpful customer service, and transparency and honesty,” RSI president Richard Schwartz said. “This transaction will help enhance and broaden our product offerings and attract more players.”
Neil Bluhm, chairman of RSI’s board of directors, said the deal would provide the business with capital that it will use to expand further across the US.
“This transaction with dMY Technology will provide RSI access to growth capital to allow for the expansion of the business in this fast-growing market and we expect it will serve our customers and investors well,”Bluhm said.
The initial enterprise value of $1.78bn for the business is 5.6 times larger than RSI’s projected revenue for its 2020/21 fiscal year, $320m.
The combined company is expected to have more than $235 million on its balance sheet when the deal is closed and anticipates a market capitalisation of more than $2bn.