We recently published a list of 10 Best Sports Betting Stocks to Buy Now. In this article, we are going to take a look at where Rush Street Interactive, Inc. (NYSE:RSI) stands against the other sports betting stocks.
A U.S. Supreme Court decision in 2018 set off a sports betting boom that legalized wagering in 38 states and the District of Columbia. North Carolina legalized sports betting on March 11, and within the first 12 hours of the law’s implementation, the state wagered a remarkable $23.9 million. Of these, 30 states allow online sports betting, so if you’re within state lines, the thrill is only a click away. While most states have a minimum age of 21, a handful allow 18 or older.
Consumers can now bet from anywhere as long as they are physically present in the state due to the growth of online platforms. As a result, Americans legally wagered a record $119.84 billion on sports in 2023, up 27.5% from 2022, per the American Gaming Association’s Commercial Gaming Revenue Tracker, ushering in a new era for sports gambling in the US. Consequently, the sports betting industry’s revenue grew to $10.92 billion, a 44.5% YoY increase from 2022. The expansion was predominantly driven by continuing maturation in most existing markets as well as some new ones, including Massachusetts and Ohio. The trend is expected to continue, and in the second quarter of 2024, American sports wagerers wagered $31.75 billion. Revenue from it was $3.16 billion for the quarter, increasing 35.3% from the previous year.
While the United States is at the top of the Biggest Gambling Countries in the World, there are still 12 states in the US that do not allow legal sports betting, including California, Texas, Idaho, Utah, Minnesota, Missouri, Alabama, Georgia, South Carolina, Oklahoma, Alaska, and Hawaii.
Nonetheless, sports betting is one of the fastest-growing industries in the world. Jane Bokunewicz, director of the Lloyd Levenson Institute at New Jersey’s Stockton University, which studies the gambling industry, points out that legal sports betting could be appealing to people with limited discretionary budgets since it offers a new and inexpensive form of entertainment.
Goldman Sachs Research also states that the U.S. sports betting market is expected to grow significantly and, once it reaches maturity, could reach $45 billion each year. This growth will be prompted by new state openings and a growing share of consumer spending on sports betting, per Ben Andrews, head of leisure and travel research at Goldman Sachs in Europe, where legal sports betting has a longer history.
When it comes to consumer spending on sports betting, gambling interest reflects a sport’s popularity, with NFL football dominating in the United States. In 2023, over 73 million Americans said they planned to bet on the NFL season, which is almost 60% more than the previous season, according to a survey conducted by the American Gaming Association.
Globally, nearly one-third of people worldwide engage in sports betting at some point in their lives, based on the TGM 2022 Global Gambling and Sports Betting Survey. In 2021, 17% of people bet on sports with friends (mainly on football and horse racing), while 35.44% bet on sports, and 20.2% bet online/through applications.
According to Deloitte’s 2024 Sports Industry Outlook, generative AI is projected to dramatically impact sports betting in the next 12-18 months. The way sports fans interact with sports betting will probably undergo a revolution because of innovations in domains like personalized betting experiences, odds calculation, real-time data analysis, and improved prediction models.
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A closeup shot of slot machines and a player nervously waiting for the spin to stop.
Rush Street Interactive, Inc. (NYSE:RSI)
Number of Hedge Fund Holders: 27
The company Rush Street Interactive, Inc. (NYSE:RSI) is creating, delivering, and managing regulated online gaming platforms. In addition to running online sports wagering in Indiana, Colorado, and Illinois, it also runs real-money online casinos and sports wagering in New Jersey and Pennsylvania.
Established in 2012, the company operates the BetRivers sportsbook. The Spanish football league La Liga and several professional sports teams are partners of the company.
The firm was the first to launch online gambling in Indiana, Colorado, and Illinois. In addition to 15 states, RSI now runs online sportsbooks in Ontario, Mexico, and Colombia.
In addition to numerous regulated overseas marketplaces, Rush Street Interactive, Inc. (NYSE:RSI) operates in fifteen U.S. states. It has received praise for both its responsible gaming policies and customer support.
The renowned American sports betting and gaming company recently improved the iRush Rewards Loyalty Program and now has a new tiered system, a more straightforward points structure, and longer benefits retention for customers of PlaySugarHouse and BetRivers brands.
In Q2 2024, a noteworthy 34% YoY growth in revenue to $220.4 million and an impressive improvement in EBITDA, which stood at $21.4 million, were reported by RSI. The company’s aggressive growth of its iCasino and sports betting platforms, together with effective player acquisition and retention techniques, are credited with its recent success.
Macquarie analyst Chad Beynon maintained an Outperform rating on the shares and upgraded the company’s price target on Rush Street Interactive from $11 to $14. The analyst notes that the company recorded a 50% EBITDA beat in Q2 with robust user growth.
According to the company, Rush Street’s exposure to American online gaming and its presence in the markets of Ontario and Latin America put it in a strong position for ongoing expansion.
RSI is one of the Best Sports Betting Stocks to Buy Now.
Overall RSI ranks 10th on our list of the best sports betting stocks to buy. While we acknowledge the potential of RSI as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than RSI but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.
