Online Betting Firm Rush Street Interactive Weighs Sale, Approaches DraftKings

Gillian Tan and Christopher Palmeri, Bloomberg News

The DraftKings logo on a smartphone arranged in Hastings-on-Hudson, New York, US, on Monday, July 31, 2023. DraftKings Inc. is scheduled to release earnings figures on August 3. Photographer: Tiffany Hagler-Geard/Bloomberg , Bloomberg

(Bloomberg) -- Rush Street Interactive Inc. is exploring strategic options including a potential sale, according to people with knowledge of the matter.

Representatives of the company have approached potential buyers including DraftKings Inc., said one of the people, who asked not to be identified discussing confidential information.

A representative for Rush Street, which operates brands including BetRivers and RushBet, declined to comment.

DraftKings “speaks to a variety of companies regarding various matters in the normal course of business, and it is our general policy not to comment on the specifics of any of those discussions,” a spokesperson for the company said.

Chicago-based Rush Street is an offshoot of the real estate and casino empire of billionaire Neil Bluhm, who remains its controlling shareholder. The company offers online betting in 15 states and three other countries. It reported sales of $691 million last year, a 17% increase from 2022.

Still, Rush Street is a small player in an online market dominated by a handful of companies led by DraftKings and FanDuel, a division of Ireland’s Flutter Entertainment Plc. Rush Street ranked in sixth place, with less than 2% of the online sports-betting market in the 12 months through January, according to research firm Eilers & Krejcik Gaming.

A number of rivals have exited the US business in recent years, including Churchill Downs Inc. and Australia’s PointsBet Holdings Ltd. Billionaire Tilman Fertitta sold his Golden Nugget Online Gaming Inc. to DraftKings in 2022.

Rush Street, now led by Chief Executive Officer Richard Schwartz, became a public company through a merger with a special purpose acquisition company in December 2020. Its shares, which surpassed $25 in January 2021, closed Wednesday at $6.12, giving the company a market capitalization of $1.4 billion.