It wasn’t long ago that profitability seemed like a speck on the horizon but more and more operators are reporting that Q2 was indeed a positive period. The latest to join the list is Rush Street Interactive, which posted adjusted EBITDA for the quarter of $1.2 million.
Q2 also resulted in $165 million in revenues and $16.7 million in net losses. Comparatively, Q2 2022 generated $143.7 million in revenue, $28.2 million in losses, and $18.6 million in adjusted EBITDA losses.
While CEO Richard Schwartz did concede there was a chance RSI pulls off full-year profitability, like most other operators, the company is in a coinflip situation to be profitable during Q3, while Q4 will more than likely generate positive results.
“We are proud that almost two-thirds of our improved profitability was driven by revenue growth and improving operations with the remaining third from more efficient marketing spent. These results set us up well for the second half of the year, where we continue to expect to be adjusted EBITDA positive,” Schwartz said on the company earnings call.
“We experienced year-over-year growth in both our online casino and sportsbook-only markets. In fact, looking at US markets launched after 2020 along with our international markets, we grew over 35% year-over-year in the second quarter. This further demonstrates our ability to launch and grow in new markets by building our brand and enhancing the player experience,” he added.
Schwartz reiterated the company’s long-term commitment to Latin America and noted the company’s enthusiasm about the opportunity Brazil poses.
As in the Q1 call, Schwartz reiterated the importance of states like Ohio and Indiana, as he believes the company continues to have outsized potential in markets that offer both online sportsbooks and online casinos. In the meantime, the company continues to refine marketing and bonusing to focus less on volume and more on quality customers.
“We continue to allocate resources including product development, bonusing strategies, and operating priorities towards retaining and serving customers and segments that align with our long-term financial objectives. In other words, we focus on the high-value players we expect to be long-term profitable.”
On the technology front, Schwartz noted that the tech that allows for slot tournaments on the online casino side continues to make a material impact on the bottom line.
On the sports betting, one new tech highlight mentioned on the call is a new section coming to the app to help encourage more prop betting called Props Central. Previously, individual props were located within the specific sport the player participates in. Soon, BetRivers will have a dedicated section of the app where all prop betting options are consolidated and easy to discover.
Schwartz said innovations likes Props Central and the popular BetRivers squares offering have helped to drive interest in higher-return props and parlays instead of straight wagers.
“We continue to add features to encourage more parlay and profit. For instance, during the second quarter we aggregated player props by league into distinct listed views, providing easier findability and more prominently showcasing prop back types. The impact has been immediate. Baseball profits this year in the second quarter were up more than 60% compared to a year ago. We are very excited with this addition and other merchandising improvements we’re planning to release heading into the NFL NCAA football seasons.”
