Rush Street Interactive Goes Public Following Merger with SPAC
Posted on: December 30, 2020, 09:35h.
Last updated on: December 30, 2020, 09:58h.
Rush Street Interactive (NYSE:RSI) is officially a public company. It launched on the New York Stock Exchange today after its merger with special purpose acquisition company (SPAC) dMY Technology Group Inc. wrapped up Tuesday.
Blank-check firm dMY Technology Group raised $230 million in a February initial public offering (IPO), declaring an intent to acquire companies in the gaming, entertainment, education, e-commerce, dating, and health and wellness industries at price tags of $500 million to $1.5 billion. The Rush Street transaction values the target at around $1.8 billion.
The Business Combination creates a leading online gaming company with US market share in online casinos that is currently among the highest in the industry and a top online sports betting offering,” according to a statement.
Rush Street Interactive (RSI) is the online gaming unit of Chicago-based Rush Street Gaming, the operator of four casinos under the Rivers brand.
RSI Well-Positioned for Online Boom
This year, investors are enthralled with SPACs and the companies those entities target. There have been nearly 230 blank-check IPOs raising more than a combined $70 billion in 2020. The gaming industry is one of the hot spots for that excitement, as RSI is one of several gaming entities to go public via a SPAC merger this year.
Citing research firm Eilers & Krejcik, Rush Street CEO Greg Carlin says the US iGaming market will be worth $20 billion at maturity, while sports wagering will vault to $15 billion.
RSI is well-positioned to capitalize on those growth trends. It currently operates in six states — New Jersey, Colorado, Pennsylvania, Indiana, Illinois, Iowa — and has market access for three others, one of which is New York. Additionally, the newly public company is in a strong financial position. After raising $230 million from dMY and approximately $160 million from a PIPE investment led by Fidelity Management, RSI came to market with $240 million in cash on its balance sheet.
“RSI is growing quickly and has experienced a revenue increase of nearly five times from the first nine months of 2019 to the first nine months of 2020,” according to the statement.
Interesting Footnotes
dMY Technology shareholders approved the combination at a meeting held yesterday. It was the same day Landcadia Holdings II investors signed off on a merger with Tilman Fertitta’s Golden Nugget Online Gaming (GNOG), meaning both iGaming companies debuted as public entities today.
Counting Golden Nugget Online, RSI, and Skillz, three gaming companies went public this month following combinations with blank-check entities.
Niccolo de Masi and Harry You, the founders of dMY, have another SPAC — dMY Technology Group, Inc. II (NYSE:DMYD). That’s the vehicle by which sports betting data provider Genius Sports will go public in a $1.5 billion deal.
Shares of RSI are lower by 2.68 percent, trading at $22.15 at this writing.