7 Best Small-Cap Casino Stocks Hedge Funds Are Buying

3. Rush Street Interactive, Inc. (NYSE:RSI)

Number of Hedge Fund Holders: 27

Market Capitalization as of August 21: $2.13 billion

Rush Street Interactive, Inc. (NYSE:RSI) is an online gaming company that serves both online casino and in-person sports betting. The company mainly operates in the United States, Mexico, Canada, and other parts of Latin America.

The gaming services provided by the company include Real Money Online Casinos, Sports Betting, and Social Gaming. Rush Street Interactive, Inc. (NYSE:RSI) operates through various brand names including BetRivers, PlaySugarHouse, and RushBet allowing players to gamble online, in person, and through virtual credits.

It is one of the best small-cap casino stocks hedge funds are buying. It was held by 27 hedge funds in the second quarter of 2024 with total stakes worth $234.35 million.

The competitive edge of the company lies in its ability to capture the international market and grow its online platforms. Rush Street Interactive, Inc. (NYSE:RSI) posted an impressive second quarter of 2024. It grew its revenue by 34% year-over-year to generate $220.4 million and significantly improved its EBITDA by $20 million during the same time.

Revenue and earnings growth were on the back of strong performance in its iCasino revenue which grew more than 40% and online sports betting which grew 25% year-over-year. In addition, management has been focused on improving its player base across the globe. As a result of these efforts, Rush Street Interactive, Inc. (NYSE:RSI) witnessed a 24% increase in Monthly Active Users (MAUs) in the US and Canada. Whereas, the MAUs in Latin America grew 79% year-over-year, indicating strong business presence and market capitalization in the industry.

Moreover, the company’s effort to spread its presence also resulted in record revenue generation from the Latin America region, which improved a staggering 79% year-over-year. The company benefits from its larger potential total addressable market and has depicted its ability to generate record revenues from new locations. If you look at the company’s 5-year performance you will find that it has grown its revenue by 107%.

Rush Street Interactive, Inc. (NYSE:RSI) can be a good investment option as its earnings are expected to grow by 400% during the year to reach $0.05. Moreover, 9 analysts have a Strong Buy rating on the stock, with their median price target of $14 presenting an upside of 48% from current levels.