Online casino and sports betting company Rush Street Interactive announced on Monday that it is merging with dMY Technology Group in order to become a publicly listed company. The combined company has an estimated value of $1.78 billion.
dMY is a special purpose acquisition company (SPAC), also called a “blank-check” company. It sells no products and offers no services. SPACs like dMY exist raise money from investors and buy other companies, hence their “special purpose.” The founders of dMY targeted mobile-focused businesses and with Rush Street, they got one.
Rush Street wanted to go public to raise more funds for expansion, but the process of getting to an initial public offering (IPO) is a laborious one. Enter the SPAC. dMY is publicly-traded under the DMYT ticker symbol on the New York Stock Exchange. By agreeing to be acquired (it’s a merger, but technically, dMY is buying Rush Street), Rush Street gets to take a shortcut to being publicly traded, since it will become a part of dMY.
But at the same time, once the two companies combine, dMY will change its name to Rush Street Interactive and change its ticker to RSI. Out of the dMY Technology chrysalis emerges the new publicly-traded Rush Street butterfly.
The leadership of Rush Street will continue in their same positions with the Rush Street 2.0. dMY chairman Harry You and CEO Niccolo de Masi will serve on the board of directors.
“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,” Rush Street president Richard Schwartz said in Monday’s announcement. “This transaction will help enhance and broaden our product offerings and attract more players.”
Rush Street Interactive operates the BetRivers and PlaySugarHouse brands. It has sportsbooks in Colorado, Illinois, Indiana, New Jersey, and Pennsylvania, as well as online casinos in the latter two states. The company also has agreements with partners to enter the Iowa, Michigan, New York, and Virginia markets.
Despite the COVID-19 pandemic, Rush Street crushed its own quarterly financial marks, earning $64 million in revenue on $2.2 billion in handle in the second quarter of this year. The previous records were hit during the first quarter: $37 million in revenue and $1.2 billion in handle.
The company has a significant competitive advantage in Illinois right now. Rivers Casino Des Plaines was the first Illinois casino to accept a sports bet, but that was just a few days before the pandemic shutdowns. On June 18, however, BetRivers launched the first online sportsbook in the state and while there wasn’t much in the way of sports going on, some still existed, generating much needed revenue.
Governor J.B. Pritzker provided an important boost to BetRivers, as well, suspending the requirement that bettors register their online accounts in person at a casino. Last Friday, the governor put the requirement back in place.
