Rush Street Interactive sustained swelling losses year-on-year as a result of its New York launch in Q1, but has still raised its full-year guidance owing to its ‘rapid expansion’.
Publishing its First Quarter 2022 report, Rush Street noted its revenue was $134.9m, up 21% YoY.
However, significant headwinds from New York resulted in net losses growing up to $52.2m in Q1, compared to just $0.1m in the same period last year.
Similarly, adjusted EBITDA stood at a loss of $43.3m, larger than the loss of $15.1m in the same period last year.
Q1 saw Rush Street enter new markets, including online sportsbook launches in New York and Louisiana and online casino and online sportsbook in Ontario following the end of the period.
Meanwhile, the casino platform expanded its Ambassadors and Betting Content Production with additions of New York sports broadcaster Mike Francesca, Canadian broadcaster Dan O’Toole, retired New York Mets manager Bobby Valentine, and former Chicago Bull player Joakim Noah, whilst it also became an official sportsbook partner of the New Orleans Pelicans.
Such expansion and exposure led to Rush Street’s expenses from advertising and promotions increase by 63.7% up to $66.3m, compounding the company’s losses but aiming to acquire customers in new markets.
Richard Schwartz, Chief Executive Officer of RSI, said, “Launching five new markets in seven months with an additional market set for launch by the end of the second quarter, positions us well to continue to rapidly expand and diversify the business with an eye towards profitability.
“We grew MAUs sequentially at our fastest pace in six quarters and experience shows that these players build significant value over time.”
Despite the losses, Rush Street raised its guidance for full-year revenues to between $600m – $650m, up from $580m – $630m. The median range would mean a 28% increase in full-year revenues compared to FY2021.
Schwartz added: “We remain disciplined in our approach and are balancing profitability from more developed markets with investments in new market launches.
“In fact, excluding the impact of our New York launch during the first quarter, our Adjusted EBITDA loss is less than $15m, demonstrating the growing profitability of our previously launched markets. Achieving consistent profitability is our top priority and we expect RSI to be Adjusted EBITDA positive for the second half of 2023.”
