At the forefront of Rush Street Interactive’s strategy is an “extraordinarily focused” approach on the casino sector, as emphasized by CEO Richard Schwartz. His remarks came during his appearance at the Craig-Hallum 5th Annual Online Gaming Conference on Tuesday. Schwartz highlighted that unlike others, Rush Street Interactive steers clear of distractions such as prediction market launches or attempting to outcompete others in the U.S. sports betting industry’s upper echelon.

According to Schwartz, the company is concentrating on what it identifies as the core of its industry, the casino sector, and believes it is years ahead of the competition in terms of the player experience. He teased the introduction of some “really compelling, unique, never seen before” features in the gaming industry set to launch next year. These additions are aimed at enhancing the BetRivers product, which has already shown significant growth in mature markets and delivered strong third-quarter results, leading to an upward revision of its financial guidance.

Despite the positive financial performance, RSI’s stock experienced a downturn post-earnings, dropping nearly 9% from its pre-earnings price of $18.17, reaching its lowest. However, the stock has been recovering over the past month and closed at $18.62 on Thursday.

Exceptional Retention Rates at BetRivers

Richard Schwartz, elaborating on what sets BetRivers apart, stated that the company has always prioritized player experience, focusing on satisfying their needs and presenting as a thoughtful operator. This commitment to delivering unexpected and delightful experiences, according to Schwartz, is a key factor in their high customer retention rates.

He further explained that despite most players having accounts with multiple operators, BetRivers aims to capture the largest share of the player’s entertainment budget. Schwartz contrasted BetRivers’ approach of developing unique, in-house features with competitors who tend to rely on third-party games, emphasizing that these competitors are not inherently developers but rather publishers.

Continued Growth in Online Casino Segment

Kyle Sauers, President & CFO, indicated that the momentum seen in the company’s growth during the third quarter, characterized by a record number of first-time depositors and a 45% increase in monthly active North American users, is expected to continue into the fourth quarter. This growth trajectory is anticipated to be evident in the public numbers for October and the results for November to be published later in the month.

This expansion has been achieved despite a reduction in customer acquisition costs from the second to the third quarter. Sauers expressed confidence in the appeal of BetRivers and RushBet, emphasizing the importance of having a great product to ensure that new visitors become loyal customers. He also noted significant improvements in marketing efficiency and the reactivation of former users, though he acknowledged the ongoing potential for further enhancements in these areas.

Enhancements to BetRivers Sports Betting

Rush Street Interactive is also making strides in improving its sports betting offerings, with Schwartz hinting at upcoming enhancements that have yet to be specified. The company has concentrated on refining the fundamentals over the past year, focusing on live betting experiences and navigational improvements.

Sauers pointed out that despite challenging NFL outcomes that negatively impacted most sportsbooks’ EBITDA in the third quarter, BetRivers experienced growth in its hold percentage.

Emerging Sports Competition in Delaware

Despite BetRivers’ exclusivity in offering online casino and sports betting services in Delaware, it faces new competition with the entry of Fanatics Markets’ predictions product. Launched in multiple states, including Delaware, this product represents a new avenue for sports outcome-based wagering.

Before this launch, Schwartz expressed confidence that the Delaware Lottery would address the introduction of prediction operations within the state. He referenced efforts to remove sweepstakes operators from Delaware and a recent Nevada ruling that allowed the Nevada Gaming Commission to act against Kalshi for offering similar sports predictions. Schwartz underscored Rush Street Interactive’s significant performance in Delaware, noting a 74% revenue growth and a gross revenue annual run rate exceeding $160 million, vastly outperforming the previous operator, 888.

Expanding Into Another Latin American Market

RSI is eyeing expansion into another Latin American market, though Schwartz remained tight-lipped about specific details. He attributed part of the company’s success in the region to having dedicated teams for legal, compliance, and finance. The RushBet brand is already operational in Colombia, Mexico, and recently, Peru, where it has seen “really fast growth” including a 50% revenue increase in November over October.

He also mentioned the impending expiration of the value-added tax for online casino deposits in Colombia at the year’s end, which he believes lacks constitutional support for inclusion in the fiscal budget. Despite this, companies, including RSI, have absorbed the 19% tax to maintain market competitiveness. Additionally, Sauers highlighted Mexico as a significant growth opportunity, with the company’s revenue more than doubling in recent years despite an increase in the online casino gross revenue tax rate from 30% to 50%.