Rush Street cuts ties with Connecticut Lottery online sportsbook partnership

White flag waving in the sky
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After two years of working with the Connecticut Lottery to offer online and retail sports betting in the state of Connecticut, Rush Street Interactive is throwing in the towel. The company announced Monday that the two groups have mutually agreed to wind down the partnership. Connecticut Lottery will begin a new request for proposals soon.

Rush Street elected to opt out of CT deal

“We thank the CLC for their partnership over the last two years. We are proud of what we have accomplished together in Connecticut and have enjoyed the relationships that we have built with the players. Consistent with our long-term strategic goals, after much deliberation and discussions with the CLC, we believe it is in the best interest of RSI and our stockholders to wind down this partnership,” said Rush Street Interactive CEO Richard Schwartz.

“As is consistent with nearly everything we do at RSI, both RSI and the CLC remain committed to putting our players first. Through the transition, we plan to continue to support all player wagers and ensure a positive player experience and expect the changeover will have an immaterial impact on our guidance for 2023.”

CT Lottery can offer sportsbooks but no online casinos

Rush Street is one of three online sportsbook operators in the state. However, the other two, FanDuel and DraftKings, can offer online casino games in addition to online sports betting thanks to their partnerships with tribal casinos Mohegan Sun and Foxwoods, respectively. Since Rush Street offers its PlaySugarHouse brand along with the lottery, it is not eligible to offer an online casino site.

Schwartz spoke about the company and the industry focusing on expanding online casino in the US during the company’s most recent earnings call.

“In terms of the online casino, the industry is aligned in a way that I haven’t seen before and you’re starting to see a lot of investments being made and lobbying efforts to legalize online casino in a way that you haven’t seen over the last decade,” he said. “That’s extremely exciting. I think it’s clear why casino is a larger, more profitable category, the industry and legislators are realizing the value of the combination, how effective it is.”

Branding rules may limit interest from other operators

Additionally, there are rules in place that prohibit the online partner of the lottery cannot bear the name of a brick-and-mortar casino property. That is why Rush Street used its PlaySugarHouse brand instead of the more common BetRivers brand in the state.

Operators like PointsBet and Bet365 all fit the bill, but both of those brands recently pulled out of Massachusetts and are being more particular when choosing new markets.

Currently, Rush Street was doing a fraction of the business of the other two operators. In February, PlaySugarHouse did roughly $13.3 million in handle compared to $57 million each from FanDuel and DraftKings. These numbers are in line with the standard performance of the three Connecticut online sportsbooks.