Document and Entity Information
Document and Entity Information | 3 Months Ended |
Mar. 31, 2021 | |
Document and Entity Information | |
Document Type | POS AM |
Entity Registrant Name | Rush Street Interactive, Inc. |
Entity Filer Category | Non-accelerated Filer |
Entity Small Business | true |
Entity Emerging Growth Company | true |
Entity Ex Transition Period | false |
Entity Central Index Key | 0001793659 |
Amendment Flag | true |
Amendment Description | On December 16, 2020, the registrant filed a Registration Statement on Form S-1 (Registration No. 333-251390), which was subsequently declared effective by the U.S. Securities and Exchange Commission (the "SEC") on December 29, 2020 (the "Registration Statement"). On May 11, 2021, the registrant filed with the SEC Post-Effective Amendment No. 1 to the Registration Statement ("Amendment No. 1"). This post-effective amendment is being filed to update the Registration Statement and Amendment No. 1 to include information contained in the registrant's Quarterly Report on Form 10-Q and certain other information in the Registration Statement and Amendment No. 1. No additional securities are being registered under this post-effective amendment. All applicable registration fees were paid at the time of the original filing of the Registration Statement. |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Mar. 31, 2021 | Dec. 31, 2020 | Mar. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | [1] |
Current assets | ||||||
Cash and cash equivalents | $ 363,575 | $ 255,622 | $ 6,905 | |||
Restricted cash | 11,568 | 6,443 | 3,638 | |||
Players receivables | 3,389 | 779 | 1,851 | |||
Due from affiliates | 29,987 | 28,764 | 3,135 | |||
Prepaid expenses and other current assets | 3,280 | 2,871 | 1,673 | |||
Total current assets | 411,799 | 294,479 | 17,202 | |||
Intangible assets, net | 11,612 | 9,750 | 6,957 | |||
Property and equipment, net | 2,278 | 2,016 | 581 | |||
Operating lease right-of-use asset, net | 1,033 | 1,100 | 0 | |||
Other assets | 2,080 | 1,215 | 753 | |||
Total assets | 428,802 | 308,560 | 25,493 | |||
Current liabilities | ||||||
Accounts payable | 6,306 | 11,994 | 707 | |||
Accrued expenses and other current liabilities | 37,841 | 25,995 | 9,670 | |||
Players liabilities | 14,147 | 7,779 | 5,346 | |||
Share-based liability | 0 | 7,342 | ||||
Deferred royalty, short-term | 255 | 195 | 159 | |||
Operating lease liabilities, short-term | 270 | 226 | 0 | |||
Due to affiliates | 617 | 3,751 | 2,858 | |||
Earnout interests liability | 351,048 | 0 | ||||
Total current liabilities | 59,436 | 400,988 | 26,082 | |||
Deferred royalty, long-term | 3,733 | 3,813 | 2,779 | |||
Operating lease liabilities, long-term | 868 | 979 | 0 | |||
Warrant liabilities | 170,109 | 0 | ||||
Total liabilities | 64,037 | 575,889 | 28,861 | |||
Commitments and contingencies | ||||||
Stockholders' equity (deficit) | ||||||
Treasury stock, 218,589 and 0 shares as of March 31, 2021 and December 31, 2020, respectively | (850) | |||||
Additional paid-in capital | 142,835 | (18,402) | 0 | |||
Accumulated other comprehensive income (loss) | (50) | 93 | 0 | |||
Accumulated deficit | (43,507) | (43,490) | 0 | |||
Total stockholders' equity (deficit) attributed to Rush Street Interactive, Inc. | 98,450 | (61,779) | 0 | |||
Non-controlling interests | 266,315 | (205,550) | 0 | |||
Members' deficit | 0 | (3,368) | ||||
Total stockholders' equity (deficit) | 364,765 | (267,329) | $ (14,390) | (3,368) | $ (2,539) | |
Total liabilities and stockholders' equity (deficit) | 428,802 | 308,560 | 25,493 | |||
Class A Common Stock | ||||||
Stockholders' equity (deficit) | ||||||
Class A common stock, $0.0001 par value, 750,000,000 shares authorized as of March 31, 2021 and December 31, 2020; 59,377,953 and 44,792,517 shares issued as of March 31, 2021 and December 31, 2020, respectively; 59,159,364 and 44,792,517 shares outstanding as of March 31, 2021 and December 31, 2020, respectively | 6 | 4 | 0 | |||
Class V common stock, $0.0001 par value, 200,000,000 shares authorized as of March 31, 2021 and December 31, 2020; 160,000,000 shares issued and outstanding as of March 31, 2021 and December 31, 2020 | 6 | 4 | 0 | |||
Total stockholders' equity (deficit) | 6 | 4 | ||||
Class V common stock | ||||||
Stockholders' equity (deficit) | ||||||
Class A common stock, $0.0001 par value, 750,000,000 shares authorized as of March 31, 2021 and December 31, 2020; 59,377,953 and 44,792,517 shares issued as of March 31, 2021 and December 31, 2020, respectively; 59,159,364 and 44,792,517 shares outstanding as of March 31, 2021 and December 31, 2020, respectively | 16 | 16 | 0 | |||
Class V common stock, $0.0001 par value, 200,000,000 shares authorized as of March 31, 2021 and December 31, 2020; 160,000,000 shares issued and outstanding as of March 31, 2021 and December 31, 2020 | 16 | 16 | $ 0 | |||
Total stockholders' equity (deficit) | $ 16 | $ 16 | ||||
[1] | Previously reported amounts have been adjusted for the retroactive application of the recapitalization related to the Business Combination. Refer to Note 4 for further information. |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Mar. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Treasury Stock, Shares | 218,589 | 0 | |
Class A Common Stock | |||
Common Stock, Par or Stated Value Per Share | $ 0.0001 | $ 0.0001 | $ 0.0001 |
Common Stock, Shares Authorized | 750,000,000 | 750,000,000 | 0 |
Common Stock, Shares, Issued | 59,377,953 | 44,792,517 | 0 |
Common Stock, Shares, Outstanding | 59,159,364 | 44,792,517 | 0 |
Class V common stock | |||
Common Stock, Par or Stated Value Per Share | $ 0.0001 | $ 0.0001 | $ 0.0001 |
Common Stock, Shares Authorized | 200,000,000 | 200,000,000 | 0 |
Common Stock, Shares, Issued | 160,000,000 | 160,000,000 | 0 |
Common Stock, Shares, Outstanding | 160,000,000 | 160,000,000 | 0 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Thousands | Jan. 13, 2021 | Mar. 31, 2021 | Mar. 31, 2020 | Dec. 31, 2020 | Dec. 31, 2019 |
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) | |||||
Revenue | $ 111,820 | $ 35,177 | $ 278,500 | $ 63,667 | |
Operating costs and expenses | |||||
Costs of revenue | 79,687 | 22,380 | 190,873 | 32,893 | |
Advertising and promotions | 42,216 | 8,470 | 56,517 | 28,313 | |
General administration and other | 16,564 | 16,766 | 162,447 | 23,649 | |
Depreciation and amortization | 674 | 459 | 2,082 | 1,139 | |
Total operating costs and expenses | 139,141 | 48,075 | 411,919 | 85,994 | |
Loss from operations | (27,321) | (12,898) | (133,419) | (22,327) | |
Other income (expenses) | |||||
Interest expense, net | (13) | (45) | (135) | (123) | |
Change in fair value of warrant liabilities | 41,802 | ||||
Change in fair value of earnout interests liability | $ 13,700 | (13,740) | (2,338) | 0 | |
Total other income (expenses) | 28,049 | (45) | 4,693 | (123) | |
Income (Loss) before income taxes | 728 | (12,943) | (128,726) | (22,450) | |
Income tax expense | 804 | 2,919 | 0 | ||
Net loss | (76) | (12,943) | (131,645) | (22,450) | |
Net loss attributable to non-controlling interests | (59) | 132,726 | 0 | ||
Net Loss attributable to Rush Street Interactive, Inc. | $ (17) | (12,943) | $ 1,081 | (22,450) | |
Net loss per Class A common share - basic | $ 0 | $ 0.02 | |||
Weighted average common shares outstanding - basic | 46,955,262 | 43,579,704 | |||
Net loss per Class A common share - diluted | $ (0.18) | $ (0.01) | |||
Weighted average common shares outstanding - diluted | 53,415,488 | 52,242,606 | |||
COMPREHENSIVE LOSS | |||||
Net loss | $ (76) | (12,943) | $ (131,645) | (22,450) | |
Other comprehensive income (loss) | |||||
Foreign currency translation adjustment | (624) | (364) | (524) | (10) | |
Comprehensive loss | 700 | 13,307 | (131,121) | (22,440) | |
Comprehensive loss attributable to non-controlling interests | 540 | (132,202) | 0 | ||
Comprehensive loss attributable to Rush Street Interactive, Inc. | $ 160 | $ 13,307 | $ 1,081 | $ (22,440) |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (DEFICIT) - USD ($) $ in Thousands | Class A Common Stock | Class V common stock | Treasury Stock | Additional Paid-in Capital | Accumulated Other Comprehensive Loss | Accumulated Deficit | Total Stockholders' Deficit | Non-Controlling Interests | Members' Deficit | Total | |
Balance at beginning of year at Dec. 31, 2018 | [1] | $ (2,539) | $ (2,539) | ||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||
Members' contribution | 15,545 | 15,545 | |||||||||
Share-based compensation | 6,066 | 6,066 | |||||||||
Foreign currency translation adjustment | (10) | (10) | |||||||||
Net loss | (22,450) | (22,450) | |||||||||
Balance at end of the year at Dec. 31, 2019 | (3,368) | (3,368) | |||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||
Members' contribution | 2,000 | 2,000 | |||||||||
Share-based compensation | 285 | 285 | |||||||||
Foreign currency translation adjustment | (364) | (364) | |||||||||
Net loss | (12,943) | (12,943) | |||||||||
Balance at end of the year at Mar. 31, 2020 | (14,390) | (14,390) | |||||||||
Balance at beginning of year at Dec. 31, 2019 | (3,368) | (3,368) | |||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||
Members' contribution | 6,500 | 6,500 | |||||||||
Share-based compensation | 1,692 | 1,692 | |||||||||
Disctribution to members | (5,192) | (5,192) | |||||||||
Settlement of share-based liability in exchange for RSILP Units | 150,382 | 150,382 | |||||||||
Foreign currency translation adjustment | (524) | (524) | |||||||||
Proceeds and shares issued in the Business Combination (Note 4) | $ 4 | $ 16 | $ (18,402) | $ 93 | $ (44,571) | $ (62,860) | $ (209,147) | (14,215) | (286,222) | ||
Proceeds and shares issued in the Business Combination (Note 4) (in shares) | 44,792,517 | 160,000,000 | |||||||||
Net loss | 1,081 | 1,081 | 3,597 | $ (136,323) | (131,645) | ||||||
Balance at end of the year at Dec. 31, 2020 | $ 4 | $ 16 | (18,402) | 93 | (43,490) | (61,779) | (205,550) | (267,329) | |||
Balance at end of the year (in shares) at Dec. 31, 2020 | 44,792,517 | 160,000,000 | |||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||
Share-based compensation | 2,772 | 2,772 | 8,804 | 11,576 | |||||||
Share-based compensation (in shares) | 571,239 | ||||||||||
Foreign currency translation adjustment | (143) | (143) | (481) | (624) | |||||||
Issuance of Class A Common Stock upon exercise of Warrants | $ 2 | 75,372 | 75,374 | 184,521 | 259,895 | ||||||
Issuance of Class A Common Stock upon exercise of Warrants (in shares) | 14,014,197 | ||||||||||
Settlement of earnout interests liability | 83,093 | 83,093 | 281,695 | 364,788 | |||||||
Net loss | (17) | (17) | (59) | (76) | |||||||
Balance at end of the year at Mar. 31, 2021 | $ 6 | $ 16 | $ (850) | $ 142,835 | $ (50) | $ (43,507) | 98,450 | 266,315 | 364,765 | ||
Balance at end of the year (in shares) at Mar. 31, 2021 | 59,159,364 | 160,000,000 | 218,589 | ||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||
Repurchase of Class A Common Stock | $ (850) | $ (850) | $ (2,615) | $ (3,465) | |||||||
Repurchase of Class A Common Stock (in shares) | 218,589 | ||||||||||
[1] | Previously reported amounts have been adjusted for the retroactive application of the recapitalization related to the Business Combination. Refer to Note 4 for further information. |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2021 | Mar. 31, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | |
Cash flows from operating activities | ||||
Net loss | $ (76) | $ (12,943) | $ (131,645) | $ (22,450) |
Adjustments to reconcile net loss to net cash used in operating activities | ||||
Share-based compensation expense | 11,576 | 13,490 | 144,733 | 13,407 |
Depreciation and amortization expense | 674 | 459 | 490 | 100 |
Deferred income taxes | (317) | 211 | ||
Amortization of license fee | 500 | 400 | 1,592 | 1,039 |
Noncash lease expense | 67 | 27 | 205 | |
Change in fair value of earnout interests liability | 13,740 | 2,338 | 0 | |
Change in fair value of warrant liabilities | (41,802) | (7,166) | ||
Changes in assets and liabilities: | ||||
Players receivables | (2,610) | 1,004 | 1,072 | (1,797) |
Due from affiliates | (1,223) | (4,860) | (25,629) | (2,536) |
Prepaid expenses and other current assets | (268) | 347 | (1,199) | (607) |
Other assets | (298) | (65) | (462) | (502) |
Accounts payable | (5,688) | 144 | 11,229 | 129 |
Accrued expenses and other current liabilities | 11,846 | 1,176 | ||
Accrued expenses and other current liabilities | 16,325 | 4,458 | ||
Players liabilities | 6,368 | (2,181) | 2,433 | 2,678 |
Deferred royalty | (20) | (29) | 1,070 | 2,070 |
Lease liabilities | (67) | (27) | (100) | |
Due to affiliates | (3,134) | 421 | 893 | 1,552 |
Net cash used in operating activities | (11,232) | (3,037) | 16,179 | (2,459) |
Cash flows from investing activities | ||||
Purchases of property and equipment | (447) | (326) | (1,872) | (430) |
Acquisition of gaming licenses | (1,450) | (1,051) | (4,371) | (5,340) |
Cash paid for internally developed software costs | (909) | |||
Investment in long-term deposits | (250) | |||
Net cash used in investing activities | (3,056) | (1,377) | (6,243) | (5,770) |
Cash flows from financing activities | ||||
Proceeds from related party loan | 650 | 650 | ||
Repayments of related party loan | (650) | |||
Net proceeds from the Business Combination | 239,763 | |||
Distribution to members | (5,192) | |||
Members' capital contribution | 2,000 | 6,500 | 15,545 | |
Proceeds from shares issued for warrants | 131,447 | |||
Repurchase of common stock | (3,465) | |||
Net cash provided by financing activities | 127,982 | 2,650 | 241,071 | 15,545 |
Effect of exchange rate changes on cash, cash equivalents and restricted cash | (616) | (370) | 515 | (6) |
Net change in cash, cash equivalents and restricted cash | 113,078 | (2,134) | 251,522 | 7,310 |
Cash, cash equivalents and restricted cash, at the beginning of the period | 262,065 | 10,543 | 10,543 | 3,233 |
Cash, cash equivalents and restricted cash, at the end of the period | 375,143 | 8,409 | 262,065 | $ 10,543 |
Supplemental disclosure of noncash investing and financing activities: | ||||
Right-of-use assets obtained in exchange for new or modified operating lease liabilities | $ 727 | 1,305 | ||
Non-cash redemption of Private Placement and Working Capital Warrants | 50,798 | |||
Non-cash settlement of Public Warrants | 77,650 | |||
Non-cash settlement of Earnout Interests Liability | 364,788 | |||
Increase in accounts payable for property and equipment purchases | 58 | |||
Earnout interests liability recognized in the Business Combination | 348,710 | |||
Warrant liabilities recognized in the Business Combination | 181,271 | |||
Supplemental disclosure of cash flow information: | ||||
Cash paid for income taxes | $ 252 | $ 763 |
Description of Business
Description of Business | 3 Months Ended | 12 Months Ended |
Mar. 31, 2021 | Dec. 31, 2020 | |
Description of Business | ||
Description of Business | 1. Description of Business Rush Street Interactive, Inc. is a holding company organized under the laws of the State of Delaware and, through its main operating subsidiary, Rush Street Interactive, LP and its subsidiaries (collectively, “RSILP”), is a leading online gaming company that provides online casino and sports betting in the U.S. and Latin America markets. Rush Street Interactive, Inc. and its subsidiaries (including RSILP) are collectively referred to as “RSI” or the “Company.” The Company is headquartered in Chicago, IL. On December 29, 2020, dMY Technology Group, Inc. (“dMY”), a special purpose acquisition company incorporated in Delaware on September 27, 2019, completed the acquisition of certain units of RSILP pursuant to a Business Combination Agreement, dated as of July 27, 2020 (as amended and restated on October 9, 2020, as further amended on December 4, 2020), (the “Business Combination Agreement”), between RSILP, the sellers set forth on the signature pages thereto (collectively, the “Sellers” and each, a “Seller”), dMY Sponsor, LLC, a Delaware limited liability company (the “Sponsor”), and Rush Street Interactive GP, LLC, a Delaware limited liability company, in its capacity as the Sellers’ Representative (in such capacity, the “Sellers’ Representative”). In connection with the closing (the “Closing”) of the transactions described in the Business Combination Agreement (the “Business Combination”), the Company was reorganized in an umbrella partnership-C corporation, or UP-C, structure, in which substantially all of the assets of the combined company are held by RSILP and the Company’s only assets are its equity interests in RSILP (which are held indirectly through wholly-owned subsidiaries of the Company – RSI ASLP, Inc. (the “Special Limited Partner”) and RSI GP, LLC (“RSI GP”), which is the general partner of RSILP). As of the Closing, the Company owned, indirectly through the Special Limited Partner, approximately 23.1% of the Common Units of RSILP (“RSILP Units”) and controls RSILP through RSI GP, and the Sellers owned approximately 76.9% of the RSILP Units and control the Company through their ownership of the Class V Common Stock, par value $0.0001 per share, of the Company (the “Class V Common Stock”). Upon consummation of the Business Combination, dMY changed its name to “Rush Street Interactive, Inc.” As of March 31, 2021, the Company and the Sellers owned approximately 27.0% and 73.0% of the RSILP Units, respectively. Impact of COVID-19 The COVID-19 pandemic has adversely impacted global commercial activity, disrupted supply chains and contributed to significant volatility in financial markets. In 2020 and continuing into 2021, the COVID-19 pandemic continued to adversely impact many different industries. The ongoing COVID-19 pandemic could have a continued material adverse impact on economic and market conditions and trigger a period of global economic slowdown. The rapid development and fluidity of this situation precludes any prediction as to the extent and the duration of the impact of COVID-19. The COVID-19 pandemic therefore presents material uncertainty and risk with respect to the Company and its performance and could affect its financial results in a materially adverse way. The COVID-19 pandemic has significantly impacted RSI. The direct impact, beyond disruptions in normal business operations, is primarily through the change in consumer habits as a result of stay-at-home orders and similar consumer restrictions. During that time, RSI experienced increased player activity that has continued to remain strong even after many of these orders were lifted. COVID-19 has also had a direct impact on sports betting due to the rescheduling, reconfiguring, suspension, postponement and cancellation of major sports seasons and sporting events. The suspension of sports seasons and sporting events reduced RSI’s customers’ use of, and spending on, RSI’s sports betting offerings. Primarily starting in the third quarter and continuing into the fourth quarter of 2020, most major professional sports leagues resumed their activities. The return of major sports and sporting events, as well as the unique and concentrated sports calendar, generated significant customer interest and activity in the Company’s sports betting offerings. However, sports seasons and calendars continue to remain uncertain and could be further suspended, cancelled or rescheduled due to additional COVID-19 outbreaks. The Company’s revenues vary based on sports seasons and sporting events, among other things, and cancellations, suspensions or alterations resulting from COVID-19 have the potential to adversely affect our revenue, possibly materially. However, the Company’s online casino offerings do not rely on sports seasons and sporting events, and as such, they may partially offset this adverse impact on revenue. The ultimate impact of COVID-19 and the related restrictions on consumer behavior is currently unknown. A significant or prolonged decrease in consumer spending on entertainment or leisure activities would likely have an adverse effect on demand for RSI offerings, reducing cash flows and revenues, thus materially harming the business, financial condition and results of operations. In addition, a recurrence of COVID-19 cases or an emergence of additional variants or strains could cause other widespread or more severe impacts depending on where infection rates are highest. As steps taken to mitigate the spread of COVID-19 have necessitated a shift away from a traditional office environment for many employees, the Company has business continuity programs in place to ensure that employees are safe, and that the business continues to function with minimal disruptions to normal work operations while employees work remotely. The Company will continue to monitor developments relating to disruptions and uncertainties caused by COVID-19. | 1. Description of Business Rush Street Interactive, Inc. is a holding company organized under the laws of the State of Delaware and, through its main operating subsidiary, Rush Street Interactive, LP and its subsidiaries (collectively, “RSILP”), is a leading online gaming company that provides online casino and sports betting in the U.S. and Latin America markets. Rush Street Interactive, Inc. and its subsidiaries (including RSILP) are collectively referred to as “RSI” or the “Company." The Company is headquartered in Chicago, IL. Prior to the Reorganization (see Reorganization section below), RSILP was formed in the State of Delaware originally as Rush Street Interactive, LLC (“RSI LLC”) in March 2012. In December 2019, RSI LLC converted to a Delaware limited partnership. RSI launched its first social gaming website in 2015 and began accepting real-money bets in the United States in 2016. The Company establishes and utilizes subsidiaries, usually in the form of limited liability companies, to facilitate its operations in primarily jurisdictions where the Company is licensed to operate. Currently, RSI offers a combination of real-money online casino and sports betting, retail sports betting and retail sports services in the nine U.S. states as outlined in the table below. Online Sports Retail Sports U.S. State Online Casino Betting Betting Colorado P Illinois P P Indiana P P Iowa P Michigan P P P Pennsylvania P P P New Jersey P P New York P Virginia P In addition, in 2018, RSI became the first U.S.-based online gaming operator to launch in Colombia, which was an early adopting Latin American country to legalize and regulate online casino and sports betting. Currently, the Company offers both online casino and online sports betting in Colombia. Reorganization On December 29, 2020, dMY Technology Group, Inc. (“dMY”), a special purpose acquisition company incorporated in Delaware on September 27, 2019, completed the acquisition of certain units of RSILP pursuant to a Business Combination Agreement, dated as of July 27, 2020 (as amended and restated on October 9, 2020, as further amended on December 4, 2020), (the “Business Combination Agreement”), between RSILP, the sellers set forth on the signature pages thereto (collectively, the “Sellers” and each, a “Seller”), dMY Sponsor, LLC, a Delaware limited liability company (the “Sponsor”), and Rush Street Interactive GP, LLC, a Delaware limited liability company, in its capacity as the Sellers’ Representative (in such capacity, the “Sellers’ Representative”). In connection with the closing of the Business Combination Agreement (the “Closing”), and collectively with the other transactions described in the Business Combination Agreement, (the “Business Combination”), the Company was reorganized in an umbrella partnership-C corporation (or “Up-C structure”), in which substantially all of the assets of the combined company are held by RSILP and its subsidiaries, and Rush Street Interactive, Inc.'s only assets are its equity interests in RSILP (which are held indirectly through wholly-owned subsidiaries of the Company– RSI ASLP, Inc. (the “Special Limited Partner”) and RSI GP, LLC (“RSI GP”), which is the general partner of RSILP). As of the Closing, the Company owned, indirectly through the Special Limited Partner, approximately 23.1% of the Common Units of RSILP (“RSILP Units”) and controls RSILP through RSI GP, and the Sellers, owned approximately 76.9% of the RSILP Units and control the Company through the ownership of the Class V Common Stock (as defined below). Upon consummation of the Business Combination, dMY changed its name to “Rush Street Interactive, Inc.” See Note 4 for additional discussion related to the Business Combination. Impact of COVID-19 The COVID-19 pandemic has adversely impacted global commercial activity, disrupted supply chains and contributed to significant volatility in financial markets. In 2020, the COVID-19 pandemic adversely impacted many different industries. The ongoing COVID-19 pandemic could have a continued material adverse impact on economic and market conditions and trigger a period of global economic slowdown. The rapid development and fluidity of this situation precludes any prediction as to the extent and the duration of the impact of COVID-19. The COVID-19 pandemic therefore presents material uncertainty and risk with respect to the Company and its performance and could affect its financial results in a materially adverse way. The COVID-19 pandemic has significantly impacted RSI. The direct impact, beyond disruptions in normal business operations, is primarily through the change in consumer habits as a result of stay-at-home orders and similar consumer restrictions. During that time, RSI experienced increased player activity that has continued to remain strong even after many of these orders were lifted. COVID-19 has also had a direct impact on sports betting due to the rescheduling, reconfiguring, suspension, postponement and cancellation of major sports seasons and sporting events. The suspension of sports seasons and sporting events reduced RSI’s customers’ use of, and spending on, our sports betting offerings. Primarily starting in the third quarter and continuing into the fourth quarter of 2020, most major professional sports leagues resumed their activities. The return of major sports and sporting events, as well as the unique and concentrated sports calendar, generated significant customer interest and activity in the Company’s sports betting offerings. However, sports seasons and calendars continue to remain uncertain and could be further suspended, cancelled or rescheduled due to additional COVID-19 outbreaks. The Company’s revenues vary based on sports seasons and sporting events, among other things, and cancellations, suspensions or alterations resulting from COVID-19 have the potential to adversely affect our revenue, possibly materially. However, the Company’s online casino offerings do not rely on sports seasons and sporting events, and as such, they may partially offset this adverse impact on revenue. The ultimate impact of COVID-19 and the related restrictions on consumer behavior is currently unknown. A significant or prolonged decrease in consumer spending on entertainment or leisure activities would likely have an adverse effect on demand for RSI offerings, reducing cash flows and revenues, thus materially harming the business, financial condition and results of operations. In addition, a recurrence of COVID-19 cases or an emergence of additional variants or strains could cause other widespread or more severe impacts depending on where infection rates are highest. As steps taken to mitigate the spread of COVID-19 have necessitated a shift away from a traditional office environment for many employees, the Company has business continuity programs in place to ensure that employees are safe, and that the business continues to function with minimal disruptions to normal work operations while employees work remotely. The Company will continue to monitor developments relating to disruptions and uncertainties caused by COVID-19. |
Summary of Significant Accounti
Summary of Significant Accounting Policies and Recent Accounting Pronouncements | 3 Months Ended | 12 Months Ended |
Mar. 31, 2021 | Dec. 31, 2020 | |
Summary of Significant Accounting Policies and Recent Accounting Pronouncements | ||
Summary of Significant Accounting Policies and Recent Accounting Pronouncements | 2. Summary of Significant Accounting Policies and Recent Accounting Pronouncements Basis of Presentation and Principles of Consolidation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) and the applicable regulations of the U.S. Securities and Exchange Commission (“SEC”) regarding interim financial reporting. Certain information and note disclosures normally included in annual financial statements prepared in accordance with U.S. GAAP have been condensed or omitted. Therefore, these unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and the related notes thereto as of and for the year ended December 31, 2020 included in the Company’s Annual Report on Form 10-K, as filed with the SEC on March 25, 2021 and as amended by Amendment No. 1 on Form 10-K/A and Amendment No. 2 on Form 10-K/A, as filed with the SEC on April 30, 2021 and May 7, 2021, respectively (collectively referred to herein as “Amended Annual Report”). These unaudited condensed consolidated financial statements include the accounts of the Company and its directly and indirectly wholly-owned subsidiaries. For consolidated entities that are less than wholly-owned, the third party’s holding of an equity interest is presented as Non-controlling interests in the Company’s condensed consolidated balance sheets and condensed consolidated statements of equity (deficit). The portion of net earnings attributable to the non-controlling interests is presented as Net loss attributable to non-controlling interests in the Company’s condensed consolidated statements of operations and comprehensive loss. All intercompany accounts and transactions have been eliminated upon consolidation. Pursuant to the Business Combination Agreement, the Business Combination was accounted for as a reverse recapitalization in accordance with U.S. GAAP (the “Reverse Recapitalization”). Under this method of accounting, dMY was treated as the acquired company and RSILP was treated as the acquirer for financial statement reporting purposes. Accordingly, for accounting purposes, the Reverse Recapitalization was treated as the equivalent of RSILP issuing stock for the net assets of dMY, accompanied by a recapitalization. RSILP was determined to be the accounting acquirer based on evaluation of the following facts and circumstances: · RSILP’s existing members, through their ownership of the Class V Common Stock, have the largest portion of the voting rights in the Company; · The Board of Directors of the Company and management are primarily composed of individuals associated with RSILP; and · RSILP is the larger entity based on historical operating activity and has the larger employee base. Thus, the financial statements included in this report reflect (i) the historical operating results of RSILP prior to the Reverse Recapitalization; (ii) the combined results of the RSILP and dMY following the Business Combination; and (iii) the acquired assets and liabilities of dMY stated at historical cost, with no goodwill or other intangible assets recorded. Certain prior period amounts have been reclassified to conform to the current period presentation. Interim Unaudited Condensed Consolidated Financial Statements The accompanying condensed consolidated balance sheet as of March 31, 2021, and the condensed consolidated statements of operations and comprehensive loss, stockholders' equity (deficit), and cash flows for the three months ended March 31, 2021 and 2020, are unaudited. The condensed consolidated balance sheet as of December 31, 2020 was derived from audited financial statements, but does not include all disclosures required by U.S. GAAP. The interim unaudited condensed consolidated financial statements have been prepared on a basis consistent with the annual consolidated financial statements and, in the opinion of management, reflect all adjustments, which include only normal recurring adjustments, necessary to state fairly the Company's financial condition, its operations and cash flows for the periods presented. The historical results are not necessarily indicative of future results, and the results of operations for the three months ended March 31, 2021 are not necessarily indicative of the results to be expected for the full year or any other period. Use of Estimates The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates. Significant estimates and assumptions reflected in the consolidated financial statements relate to and include, but are not limited to: the valuation of share-based awards; the estimated useful lives of property and equipment and intangible assets; redemption rate assumptions associated with the player loyalty program and other discretionary player bonuses; deferred revenue relating to our social gaming revenue stream; accrued expenses and other current liabilities; determination of the incremental borrowing rate to calculate operating lease liabilities; valuation of the earnout interests liability; valuation of the warrant liabilities; and deferred taxes and amounts associated with the Tax Receivable Agreement entered into in connection with the Business Combination (the “Tax Receivable Agreement”). Significant Accounting Policies The following accounting policy is incremental to the Company’s significant accounting policies as described in Note 2, “Summary of Significant Accounting Policies,” of its audited consolidated financial statements and related notes included in the Amended Annual Report. Internally Developed Software Software that is developed for internal use is accounted for pursuant to Accounting Standards Codification (“ASC”) 350-40, Intangibles, Goodwill and Other — Internal-Use Software . Qualifying costs incurred to develop internal-use software are capitalized when (i) the preliminary project stage is completed, (ii) management has authorized further funding for the completion of the project and (iii) it is probable that the project will be completed and perform as intended. These capitalized costs include compensation for employees who develop internal-use software and external costs related to development of internal-use software. Capitalization of these costs ceases once the project is substantially complete and the software is ready for its intended purpose. Internally developed software is amortized using the straight-line method over an estimated useful life of three to four years. All other expenditures, including those incurred to maintain an intangible asset’s current level of performance, are expensed as incurred. Recently Adopted Accounting Pronouncements In December 2019, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes (“ASU 2019-12”), which is intended to simplify various aspects related to accounting for income taxes. ASU 2019-12 removes certain exceptions to the general principles in ASC 740 and clarifies and amends existing guidance to improve consistent application. This guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020, with early adoption permitted. The Company adopted ASU 2019-12 on January 1, 2021, and the adoption had no impact on its condensed consolidated financial statements. Recent Accounting Pronouncements Not Yet Adopted In June 2016, the FASB issued ASU 2016-13, Financial Instruments – Credit Losses (Topic 326) . Together with subsequent amendments, this ASU sets forth a “current expected credit loss” model, which requires the Company to measure all expected credit losses for financial instruments held at the reporting date based on historical experience, current conditions and reasonable supportable forecasts. This ASU replaces the existing incurred loss model and is applicable to the measurement of credit losses on financial assets measured at amortized cost, available-for-sale debt securities and applies to certain off-balance sheet credit exposures. This ASU is effective for the Company in calendar year 2023. The Company is currently assessing the impact of the adoption of this ASU on its condensed consolidated financial statements. | 2. Summary of Significant Accounting Policies Basis of Presentation and Principles of Consolidation The accompanying consolidated financial statements are presented in conformity with accounting principles generally accepted in the United States (“U.S. GAAP”) and pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”). The consolidated financial statements include the accounts and operations of the Company and its wholly-owned subsidiaries. For consolidated entities that are less than wholly-owned, the third party’s holding of an equity interest is presented as Non-controlling interests in the Company’s consolidated balance sheets and consolidated statements of equity (deficit). The portion of net earnings attributable to the non-controlling interests is presented as Net income (loss) attributable to non-controlling interests in the Company’s consolidated statements of operations and comprehensive income (loss). All intercompany accounts and transactions have been eliminated upon consolidation. Pursuant to the Business Combination Agreement, the Business Combination was accounted for as a reverse recapitalization in accordance with U.S. GAAP (the “Reverse Recapitalization”). Under this method of accounting, dMY is treated as the acquired company and RSILP is treated as the acquirer for financial statement reporting purposes. Accordingly, for accounting purposes, the Reverse Recapitalization was treated as the equivalent of RSILP issuing stock for the net assets of dMY, accompanied by a recapitalization. RSILP was determined to be the accounting acquirer based on evaluation of the following facts and circumstances: · RSILP’s existing member’s, through their ownership of the Class V Common Stock, have the largest portion of the voting rights in the Company; · The Board of Directors of the Company (the “Board”) and management are primarily composed of individuals associated with RSILP; and · RSILP is the larger entity based on historical operating activity and has the larger employee base. Thus, the financial statements included in this report reflect (i) the historical operating results of RSILP prior to the Reverse Recapitalization; (ii) the combined results of the RSILP and dMY following the Business Combination; and (iii) the acquired assets and liabilities of dMY stated at historical cost, with no goodwill or other intangible assets recorded. Reclassifications Certain prior year amounts have been reclassified to conform to the current year presentation. Liquidity and Capital Resources Based on the net proceeds from the Business Combination (refer to Note 4) and the proceeds from warrant exercises resulting from the public warrant redemption (refer to Note 8) and future spend assumptions, the Company currently expects that its cash will be sufficient to fund its operating expenses and capital expenditure requirements for at least 12 months from the date of issuance of this report. The Company experienced positive operating cash flows of $16.2 million for the year ended December 31, 2020 and negative operating cash flows of $2.5 million for the year ended December 31, 2019. The Company has a working capital deficit as of December 31, 2020 totaling $106.5 million, mainly a result of the earnout interests liability, which was $351.0 million at December 31, 2020. The earnout interests liability pertains to certain shares and units held by directors of dMY and the Sellers that were subject to restrictions pending the achievement of certain earnout targets, which did not occur until January 2021 (refer to Notes 4 and 18). Although recorded as a current liability at December 31, 2020, the earnout interests liability was reclassed to equity upon occurrence of the triggering event in January 2021 and did not result in any cash settlement. That is, the earnout interest liability should not be included in any future cash flow assumptions as of December 31, 2020. Refer to Note 4 for additional discussion of the earnout interest liability. Use of Estimates The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates. Significant estimates and assumptions reflected in the consolidated financial statements relate to and include, but are not limited to, the valuation of share-based awards; the estimated useful lives of property and equipment and intangible assets; redemption rate assumptions associated with the loyalty program and other discretionary player bonuses; deferred revenue relating to our social gaming revenue stream; accrued expenses and other current liabilities; determination of the incremental borrowing rate to calculate operating lease liabilities; valuation of the earnout interests liability; valuation of the warrant liabilities; and deferred taxes and amounts associated with the Tax Receivable Agreement related to the Business Combination. Segment Reporting Operating segments are identified as components of an enterprise about which separate discrete financial information is available for evaluation by the chief operating decision maker in making decisions regarding resource allocation and assessing performance. The Company views its operations and manages its business in one operating segment. Cash and Cash Equivalents and Restricted Cash Cash and cash equivalents consist of highly liquid, unrestricted savings, checking and instant access internet banking accounts with original maturities of 90 days or less at acquisition. The Company maintains separate bank accounts to segregate cash that resides in players’ interactive gaming and sports betting accounts from cash used in operating activities. Due to certain regulatory requirements, cash amounts that reside in player’s interactive gaming and sports betting accounts at the end of the period are classified as restricted cash. The following table reconciles cash and cash equivalents and restricted cash in the balance sheet to the total shown on the statements of cash flows: December 31, 2020 2019 ($ in thousands) Cash and cash equivalents $ 255,622 $ 6,905 Restricted cash 6,443 3,638 Total cash, cash equivalents and restricted cash $ 262,065 $ 10,543 Players Receivables Players receivables consist of cash deposits from players that have not yet been received by the Company. Players receivables are stated at the amount that the Company expects to collect from players, generally via third-party payment processors. These receivables arise due to the timing difference between a player’s deposit and the Company’s receipt of that deposit from the payment processor. The amounts are generally outstanding for a short period of time. On a periodic basis, the Company evaluates its players receivable and establishes an allowance for doubtful accounts based on a specific review of the accounts as well as historical collection experience and current economic conditions. No allowance for doubtful accounts was recorded for the periods presented in these consolidated financial statements. Due from Affiliates Due from affiliates consists of amounts that are expected to be collected from certain affiliated land-based casino partners. In certain cases, the affiliate casino maintains the bank account that processes cash deposits and withdrawals for RSI customers. Accordingly, at any point in time, the Company will record a receivable from the affiliate, representing RSI total gaming revenue (with RSI customers) that was collected by the affiliate, less consideration payable to the affiliate for use of its license, which is offset by any consideration received from the affiliate based on the terms of the agreement. On a periodic basis, the Company evaluates the collectability of amounts due from affiliates and establishes an allowance for amounts not expected to be collected. No allowance was recorded for the periods presented in these consolidated financial statements. See Note 14 for disclosure on related parties. Property and Equipment, net Property and equipment are carried at cost, net of accumulated depreciation. Depreciation is computed utilizing the straight-line method over the estimated useful life of the asset. Leasehold improvements depreciation is computed over the shorter of the lease term or estimated useful life of the asset. Additions and improvements are capitalized, while repairs and maintenance are expensed as incurred. Useful lives of each asset class are as follows: Computer equipment and software 3-5 years Furniture and fixtures 4 years Leasehold improvements Lesser of the lease terms or the estimated useful lives of the improvements, generally 1-10 years License Fees, Net The Company incurs costs in connection with operating in certain regulated jurisdictions, including applying for licenses, compliance costs and the purchase of business licenses from strategic partners. The cost of purchasing business licenses, minimum royalty payments for strategic partners and subsequent renewals of business licenses are capitalized as an intangible asset and amortized over the estimated useful life of the asset using the straight-line method. RSI considers these minimum royalty payments to be an integral cost in connection with operating in certain jurisdictions. The minimum royalty payments are offset by the deferred royalty liability on the consolidated balance sheets. RSI’s access to operate in a particular market is often dependent upon the continued viability of that particular strategic partner in that market. The useful life is the period over which the asset is expected to contribute directly, or indirectly, to the Company’s cash flows. At least annually, the remaining useful life is evaluated. Impairment of Long-Lived Assets The Company’s long-lived assets consist of property and equipment, operating lease right-of-use assets and finite-lived intangible assets (i.e., license fees). The Company evaluates long-lived assets for indicators of impairment quarterly or when events or changes in circumstances indicate that their carrying amounts may not be recoverable. The factors that would be considered by management in performing this assessment include current operating results, trends and prospects, the manner in which the long-lived asset is used and the effects of obsolescence, demand, competition and other economic factors. If indicators of impairment are identified, the Company performs an undiscounted cash flow analysis of the long-lived assets. Asset groups are written down only to the extent that their carrying value is lower than their respective fair value. Fair values of the asset group are determined by discounting the cash flows at a rate that approximates the cost of capital of a market participant. The Company did not have any impairment of long-lived assets for the years ended December 31, 2020 and 2019. Players Liabilities The Company records liabilities for player account balances, which consist of player deposits, plus player winning bets, less player losing bets, less player withdrawals. Player liabilities also includes the expected future payout relating to unredeemed bonus store points and unused discretionary bonus incentives in the player’s account. The Company’s restricted cash and players receivables balance will equal or exceed the cash portion of the Company’s player liabilities account. Deferred Royalty The Company records liabilities for minimum royalty payments related to licensing and market access agreements. These liabilities are recorded on the balance sheet at the present value of future payments discounted using a rate that reflects the duration of the agreement. The deferred royalty liability is accreted through interest expense in the Company’s consolidated statements of operations and comprehensive income (loss). The Company records deferred royalty liabilities as either deferred royalty, short-term or deferred royalty, long-term based on the timing of future payments. Due to Affiliates Due to affiliates consists of amounts owed by the Company to certain of its related parties. Amounts due to affiliates may include payment for services provided to the Company by employees of the related party or reimbursement of amounts paid by the related party on the Company’s behalf. Any royalties due to the affiliated land-based casinos are netted against Affiliate Receivables to the extent a right of offset exists. See Note 14 for disclosure on related parties. Earnout Interests Liability Earnout interests represent a freestanding financial instrument classified as liabilities on the accompanying consolidated balance sheet as the Company determined that these financial instruments are not indexed to the Company’s own equity in accordance with ASC 815, Derivatives and Hedging . Earnout interests were initially recorded as fair value in the Business Combination and are adjusted to fair value at each reporting date with changes in fair value recorded in Change in fair value of earnout interests liability in the consolidated statement of operations and comprehensive income (loss). Warrant Liabilities As part of dMY’s initial public offering, dMY issued to third-party investors 23.0 million units, consisting of one share of Class A common stock of dMY and one-half of one warrant, at a price of $10.00 per unit. Each whole warrant entitled the holder to purchase one share of Class A common stock at an exercise price of $11.50 per share (the “Public Warrants”). Simultaneously with the dMY initial public offering, 6,600,000 private placement warrants were sold to the Sponsor (the “Private Placement Warrants”) and an additional 75,000 warrants were issued to the Sponsor upon the Closing in connection with converting certain working capital loans into warrants (the “Working Capital Warrants” and together with the Private Placement Warrants, the “Private Warrants” and the Private Warrants together with the Public Warrants, the “Warrants”)). Each Private Warrant allows the Sponsor to purchase one share of Class A Common Stock at $11.50 per share. Subsequent to the Business Combination, 11,500,000 Public Warrants and 6,675,000 Private Warrants remained outstanding as of December 31, 2020. The Private Warrants and the shares of Class A Common Stock issuable upon the exercise of the Private Warrants are not transferable, assignable or salable until after the completion of a Business Combination, subject to certain limited exceptions. Additionally, the Private Warrants are exercisable for cash or on a cashless basis, at the holder’s option, and are non-redeemable so long as they are held by the initial purchasers or their permitted transferees. If the Private Warrants are held by someone other than the initial purchasers or their permitted transferees, the Private Warrants will be redeemable by the Company and exercisable by such holders on the same basis as the Public Warrants. The Company evaluated the Warrants pursuant to ASC 815-40, and concluded that they do not meet the criteria to be classified in stockholders’ equity. Specifically, the exercise of these Warrants may be settled in cash upon the occurrence of a tender offer or exchange that involves 50% or more of our stockholders holding Class A Common Stock. Because not all of the stockholders need to participate in such tender offer or exchange to trigger the potential cash settlement and the Company does not control the occurrence of such an event, the Company concluded that the Warrants do not meet the conditions to be classified in equity. Because the Warrants meet the definition of a derivative under ASC 815-40, the Company records these Warrants as liabilities on its consolidated balance sheet at fair value as of each reporting date, with subsequent changes in their respective fair values recognized in its consolidated statement of operations and comprehensive income (loss). Concentrations of Credit Risk Financial instruments that potentially subject the Company to concentrations of credit risk consist primarily of operating cash and restricted cash. The Company maintains cash and restricted cash primarily across three financial institutions within separate bank accounts. Management believes the three financial institutions to be of a high credit quality, in amounts that exceed federally insured limits. The Company does not believe that it is subject to unusual credit risk beyond the normal credit risk associated with commercial banking relationships. Leases In February 2016, the FASB issued ASU 2016‑02, Leases (Topic 842) ("ASU 2016-02"). The Company adopted the new standard on January 1, 2020 using the modified retrospective approach. Under this guidance, arrangements meeting the definition of a lease are classified as operating or financing leases and are recorded on the consolidated balance sheet as both a right-of-use asset and a lease liability. The Company determines whether an arrangement is or contains a lease at contract inception. The lease classification evaluation begins at the lease commencement date. The lease term used in the evaluation includes the non-cancellable period for which the Company has the right to use the underlying asset, together with renewal option periods when the exercise of the renewal option is reasonably certain. For leases with an initial term greater than 12 months, a related lease liability is recorded on the balance sheet at the present value of future payments discounted at the estimated fully collateralized incremental borrowing rate (discount rate) corresponding with the lease term. In addition, a right-of-use asset is recorded as the initial amount of the lease liability, plus any lease payments made to the lessor before or at the lease commencement date and any initial direct costs incurred, less any tenant improvement allowance incentives received. Tenant incentives are amortized through the right-of-use asset as a reduction of rent expense over the lease term. The difference between the minimum rents paid and the straight-line rent is reflected within the associated right-of-use asset. Certain leases contain provisions that require variable payments consisting of common area maintenance costs (variable lease cost). Variable lease costs are expensed as incurred. Leases with an initial term of 12 months or less (short-term leases) are not recorded on the balance sheet. Short-term lease expense is recognized on a straight-line basis over the lease term. As the interest rate implicit in the lease is not readily determinable, the Company uses its incremental borrowing rate corresponding with the lease term. As the Company does not have any outstanding debt, this rate is determined based on prevailing market conditions and comparable company and credit analysis. The incremental borrowing rate is reassessed if there is a change to the lease term or if a modification occurs and it is not accounted for as a separate contract. Prior to January 1, 2020, the Company accounted for leases under ASC 840, Leases (Topic 840) , and recorded rent expense associated with its operating lease on a straight-line basis over the term of the lease. Revenue Recognition Revenue is recognized when control of the promised goods or services is transferred to the customer, in an amount that reflects the consideration the Company expects to be entitled to in exchange for those goods or services. The Company determines revenue recognition through the following steps: · Identify the contract with the customer · Identify the performance obligations in the contract · Determine the transaction price · Allocate the transaction price to the performance obligations in the contract · Recognize revenue when, or as, the company satisfies a performance obligation The Company’s revenue from contracts with customers consists of online casino, online sports betting, retail sports betting and social gaming. Online casino and online sports betting Online casino offerings typically include the full suite of games available in land-based casinos, such as blackjack, roulette and slot machines. For these offerings, the Company generates revenue through hold, or gross winnings, as customers play against the house. Online casino revenue is generated based on total player bets less amounts paid to players for winning bets, less other incentives awarded to players, plus or minus the change in the progressive jackpot reserve. Online sports betting involves a user placing a bet on the outcome of a sporting event, or a series of sporting events, with the chance to win a pre-determined amount, often referred to as fixed odds. Online sports betting revenue is generated by setting odds such that there is a built-in theoretical margin in each sports bet offered to its customers. Online sports betting revenue is generated based on total player bets less amounts paid to players for winning bets, less other incentives awarded to players, plus or minus the change in unsettled bets. The Company provides various incentives to promote customer engagement, many of which allow customers to place bets without using their own funds. For some incentive programs, benefits are provided to customers based only on past play and represent an option that grants the player a material right. Other benefits that are provided to customers are more discretionary in nature and may not be related to the customer’s level of play. Performance obligations related to online gaming and sports betting transactions include (1) servicing the player’s bet, which is fulfilled when the outcome of the bet is known and (2) transferring additional goods or services to a player for which the Company has received consideration, such as bonus store points. Bonus store points as well as discretionary bonus incentives, such as bonus dollars and free bets (collectively referred to herein as “player bonuses”) are recognized as a reduction to revenue upon issuance of the incentive and as revenue upon redemption by the player. Reductions to revenue include estimates for the standalone selling price of player bonuses and the percentage of player bonuses that are expected to be redeemed. The expected redemption percentage is based on historical redemption patterns and considers current information or trends. The estimated redemption rate is evaluated each reporting period. The Company does not believe that there is a reasonable likelihood that there will be a material change in the future estimates or assumptions used to calculate the estimated redemption rate. Adjustments to earnings resulting from revisions to management’s estimates of the redemption rates have been insignificant during the years ended December 31, 2020 and December 31, 2019. An increase or decrease in the estimated redemption rate of 5% would not have a material effect on consolidated financial statements for the year ended December 31, 2020. Progressive jackpots related to online casino jackpot games are accrued and charged to revenue at the time the obligation to pay the jackpot is established. The progressive jackpot liability is recorded in Accrued expenses and other current liabilities on the consolidated balance sheets. Retail sports betting The Company provides retail sports services to land-based casinos in exchange for a monthly commission based on the land-based casino’s retail sportsbook revenue. Services include ongoing management and oversight of the retail sportsbook, technical support for the land-based casino’s customers, customer support, risk management, advertising and promotion, and support for the third-party vendor’s sports betting equipment. The Company has a single performance obligation to provide retail sports services and records the revenue as services are performed and when the commission amounts are no longer constrained (i.e., the amount is known). Certain relationships with business partners provide the Company the ability to operate the retail sportsbook at the land-based casino. In this scenario, revenue is generated based on total player bets less amounts paid to players for winning bets, less other incentives awarded to players. Social gaming The Company provides a social gaming platform for players to enjoy free-to-play games that use virtual credits. While virtual credits are issued to players for free, some players may choose to purchase additional virtual credits through the Company’s virtual cashier. The Company has a single performance obligation associated with social gaming services, to provide social gaming services to players upon the redemption of virtual credits. Deferred revenue is recorded when players purchase virtual coins and revenue is recognized when the virtual coins are redeemed, and the Company’s performance obligation has been fulfilled. Certain costs to obtain or fulfill contracts Pursuant to the accounting guidance, certain costs to obtain or fulfill a contract with a customer must be capitalized, to the extent recoverable from the associated contract margin, and subsequently amortized as the products or services are delivered to the customer. These costs are capitalized as contract acquisition costs and are amortized over the period of benefit to the customer. For the Company, the period of benefit has been determined to be less than or equal to one year. As such, the Company applied the practical expedient and contract acquisition costs are expensed immediately. Customer contract costs that do not qualify for capitalization as contract fulfillment costs are expensed as incurred. Contract balances Contract assets and liabilities represent the differences in the timing of revenue recognition from the receipt of cash from the Company’s customers and billings. The Company currently does not have contractual terms that require it to satisfy or partially satisfy its performance obligations in advance of customer billings. Deferred revenue represents wagered amounts that relate to unsettled or pending outcomes, such as a future sports bet. The Company recognizes revenue once the outcome of the bet is settled and fixed. Deferred revenue relating to the Company’s social gaming services includes virtual coins purchased by players but not yet used. Deferred revenue also includes contract liabilities for the Company’s obligation to transfer additional goods or services to a player for which the Company has received consideration, such as bonus store points. The Company recognizes breakage on bonus store points proportionately as redemption occurs. Revenue recognized relating to breakage during the years ended December 31, 2020 and 2019 were not material to the consolidated financial statements. Deferred revenue is recorded in Players liabilities on the consolidated balance sheets. Principle versus agent considerations The Company evaluates the criteria outlined in ASC 606-10-55, Principal versus Agent Considerations , in determining whether it is appropriate to record the gross amount of revenues and related costs, or the net amount earned as commissions. When the Company is the principal in a transaction and controls the specific good or service before it is transferred to the customer, revenue is recorded gross; otherwise, revenue is recorded on a net basis. The Company controls the promised goods or services for online casino and sports betting transactions, retail sports betting transactions and social gaming services, and as a result records related revenue on a gross basis. For retail sports services, the Company does not control the promised goods or services and, therefore, records the net amount of revenue earned as a commission. See Note 11 for a disaggregation of the Company’s revenues. Costs of Revenue Costs of revenue consist primarily of (i) revenue share and market access fees, (ii) platform and content fees, (iii) gaming taxes, (iv) payment processing fees and chargebacks and (v) salaries and benefits of dedicated personnel. These costs are variable in nature and should correlate with the change in revenue. Advertising and Promotions Costs Advertising and promotion costs consist primarily of marketing the Company’s products and services via different channels, promotional activities, and the related costs incurred to acquire new customers that include salaries and benefits for dedicated personnel and are expensed as incurred. General Administration and Other General administration and other expenses consist primarily of administrative personnel costs, including salaries, bonuses and benefits, share-based compensation expenses, professional services related to legal, compliance and audit/consulting services, rent and other premises costs, and insurance. Share-Based Compensation The Company records share-based compensation in accordance with ASC 718, Compensation — Stock Compensation (“ASC 718”) and recognizes share-based compensation expense in the period in which a grantee is required to provide service, which is generally over the vesting period of the individual share-based payment award. Compensation expense for awards with performance conditions is not recognized until it is probable that the performance target will be achieved. Compensation expense for awards is recognized over the requisite service period on a straight-line basis. The Company accounts for forfeitures as they occur. The Company classifies unit awards as either an equity award or a liability award depending on whether the award contains certain repurchase provisions. Equity-classified awards are valued as of the grant date based upon the price of the underlying unit or share and a number of assumptions, including volatility, performance period, risk-free interest rate and expected dividends. Liability-classified awards are valued at fair value at each reporting date. See Note 10. Share-based payment awards which contain certain repurchase provisions were classified as liabilities in accordance with ASC 718. The Company elected to measure all liability-classified awards utilizing an option pricing method and recognizes the related expense within General administration and other expenses in the consolidated statements of operations and comprehensive income (loss). Income Taxes RSI Inc. is a corporation and, as a result, is subject to United States federal, state, and foreign income taxes. RSILP is treated as a partnership for United States federal income tax purposes and therefore does not pay United States federal income tax on its taxable income. Instead, the RSILP unitholders, including the Company, are liable for United States federal income tax on their respective shares of RSILP's taxable income reported on the unitholders' United States federal income tax returns. RSILP is liable for income taxes in those states not recognizing its status as a partnership for United States federal income tax purposes. The Company accounts for income taxes using the asset and liability method. Under this method, deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are calculated by applying existing tax laws and the rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in the year of the enacted rate change. The Company recognizes deferred tax assets to the extent the Company believes these assets are more-likely-than-not to be realized. In making such a determination, the Company considers all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax planning strategies and recent results of operations. The Company accounts for uncertainty in income taxes using a recognition and measurement threshold for tax positions taken or expected to be taken in a tax return, which are subject to examination by federal and state taxing authorities. The tax benefit from an uncertain tax position is recognized when it is more-likely-than-not that the position will be sustained upon examination by taxing authorities based on technical merits of the position. The amount of the tax benefit recognized is the largest amount of the be |
Revenue Recognition
Revenue Recognition | 3 Months Ended | 12 Months Ended |
Mar. 31, 2021 | Dec. 31, 2020 | |
Revenue Recognition | ||
Revenue Recognition | 3. Revenue Recognition The Company’s revenue from contracts with customers consists of online casino, online sports betting, retail sports betting and social gaming. Online casino and online sports betting Online casino offerings typically include the full suite of games available in land-based casinos, such as blackjack, roulette and slot machines. For these offerings, the Company generates revenue through hold, or gross winnings, as customers play against the house. Online casino revenue is generated based on total player bets less amounts paid to players for winning bets, less other incentives awarded to players, plus or minus the change in the progressive jackpot reserve. Online sports betting involves a user placing a bet on the outcome of a sporting event, or a series of sporting events, with the chance to win a pre-determined amount, often referred to as fixed odds. Online sports betting revenue is generated by setting odds such that there is a built-in theoretical margin in each sports bet offered to its customers. Online sports betting revenue is generated based on total player bets less amounts paid to players for winning bets, less other incentives awarded to players, plus or minus the change in unsettled bets. Retail sports betting The Company provides retail sports services to land-based casinos in exchange for a monthly commission based on the land-based casino’s retail sportsbook revenue. Services include ongoing management and oversight of the retail sportsbook, technical support for the land-based casino’s customers, risk management, advertising and promotion, and support for the third-party vendor’s sports betting equipment. The Company has a single performance obligation to provide retail sports services and records the revenue as services are performed and when the commission amounts are no longer constrained (i.e., the amount is known). Certain relationships with business partners provide the Company the ability to operate the retail sportsbook at the land-based casino. In this scenario, revenue is generated based on total player bets less amounts paid to players for winning bets, less other incentives awarded to players. Social gaming The Company provides a social gaming platform for players to enjoy free-to-play games that use virtual credits. While virtual credits are issued to players for free, some players may choose to purchase additional virtual credits through the Company’s virtual cashier. The Company has a single performance obligation associated with social gaming services, to provide social gaming services to players upon the redemption of virtual credits. Deferred revenue is recorded when players purchase virtual coins and revenue is recognized when the virtual coins are redeemed, and the Company’s performance obligation has been fulfilled. Disaggregation of revenue for the three months ended March 31, 2021 and 2020, is as follows: Three months ended March 31, ($in thousands) 2021 2020 Online casino and online sports betting $ 109,978 $ 34,480 Retail sports betting 627 213 Social gaming 1,215 484 Total revenue $ 111,820 $ 35,177 Revenue by geographic region for the three months ended March 31, 2021 and 2020, is as follows: Three months ended March 31, ($in thousands) 2021 2020 United States $ 105,303 $ 32,883 Colombia 6,517 2,294 Total revenue $ 111,820 $ 35,177 The Company included deferred revenue within Players liabilities in the condensed consolidated balance sheets. Deferred revenue includes unsettled player bets, unredeemed social gaming virtual credits and unredeemed bonus amounts. The deferred revenue balances were as follows: Three months ended March 31, ($in thousands) 2021 2020 Deferred revenue, beginning of period $ 1,797 $ 321 Deferred revenue, end of period 2,163 95 Revenue recognized in the period from amounts included in deferred revenue at the beginning of the period 608 321 | 11. Revenue Recognition Disaggregation of revenue for the years ended December 31, 2020 and 2019, are as follows: Years Ended December 31, ($ in thousands) 2020 2019 Online casino and online sports betting $ 273,761 $ 61,268 Retail sports betting 1,205 1,053 Social gaming 3,534 1,346 Total revenue $ 278,500 $ 63,667 The following table presents the Company’s revenue by geographic region for the years ended December 31, 2020 and 2019: Years Ended December 31, ($ in thousands) 2020 2019 United States $ 263,214 $ 59,572 Colombia 15,286 4,095 Total revenue $ 278,500 $ 63,667 The Company included deferred revenue within Players liabilities in the consolidated balance sheets. Deferred revenue includes unsettled player bets, unredeemed social gaming virtual credits and the unredeemed bonus store points. The deferred revenue balances were as follows: Years Ended December 31, ($ in thousands) 2020 2019 Deferred revenue, beginning of period $ 321 $ 129 Deferred revenue, end of period 1,797 321 Revenue recognized in the period from amounts included in deferred revenue at the beginning of the period 321 129 |
Intangible Assets, Net
Intangible Assets, Net | 3 Months Ended | 12 Months Ended |
Mar. 31, 2021 | Dec. 31, 2020 | |
Intangible Assets, Net | ||
Intangible Assets, Net | 4. Intangible Assets, Net The Company has the following intangible assets, net as of March 31, 2021 and December 31, 2020: Weighted Average Remaining Gross Amortization Carrying Accumulated ($in thousands) Period Amount Amortization Net License Fees March 31, 2021 7.86 years $ 14,675 $ (3,955) $ 10,720 December 31, 2020 8.03 years $ 13,225 $ (3,475) $ 9,750 Internally Developed Software March 31, 2021 2.95 years $ 909 $ (17) $ 892 December 31, 2020 — — — — Amortization expense was $0.5 million and $0.4 million for the three months ended March 31, 2021 and 2020, respectively. | 6. License Fees, Net The table below provides a summary of the license fees as of December 31, 2020 and 2019, respectively: Weighted Average Remaining Gross Amortization Period Carrying Accumulated ($ in thousands) (years) Amount Amortization Net December 31, 2020 8.03 $ 13,225 $ (3,475) $ 9,750 December 31, 2019 8.82 $ 8,854 $ (1,897) $ 6,957 The Company recorded amortization expense on license fees of $1.6 million and $1.0 million for the years ended December 31, 2020 and 2019, respectively. At December 31, 2020, estimated future amortization of license fees is as follows ($ in thousands): ($ in thousands) Year ended December 31, 2021 $ 1,614 Year ended December 31, 2022 1,468 Year ended December 31, 2023 1,467 Year ended December 31, 2024 1,080 Year ended December 31, 2025 977 Thereafter 3,144 Total $ 9,750 |
Accrued Expenses and Other Curr
Accrued Expenses and Other Current Liabilities | 3 Months Ended | 12 Months Ended |
Mar. 31, 2021 | Dec. 31, 2020 | |
Accrued Expenses and Other Current Liabilities | ||
Accrued Expenses and Other Current Liabilities | 5. Accrued Expenses and Other Current Liabilities The Company has the following accrued expenses and other current liabilities as of March 31, 2021 and December 31, 2020: March 31, December 31, ($in thousands) 2021 2020 Accrued compensation and related expenses $ 2,735 $ 1,948 Accrued operating expenses 9,508 7,006 Accrued marketing expenses 19,942 12,093 Jackpot liability 1,052 721 Income tax payable 2,674 1,983 Other 1,930 2,244 Total accrued expenses and other current liabilities $ 37,841 $ 25,995 | 7. Accrued Expenses and Other Current Liabilities The table below provides a summary of the accrued expenses and other current liabilities at December 31, 2020 and 2019, respectively: December 31, 2020 2019 ($ in thousands) Accrued compensation and related expenses $ 2,821 $ 530 Accrued operating expenses 7,006 3,422 Accrued marketing expenses 12,093 5,396 Income tax payable 1,983 13 Other 2,092 309 Total accrued expenses and other current liabilities $ 25,995 $ 9,670 |
Warrant Liabilities
Warrant Liabilities | 3 Months Ended | 12 Months Ended |
Mar. 31, 2021 | Dec. 31, 2020 | |
Warrant Liabilities | ||
Warrant Liabilities | 6. Warrant Liabilities As part of dMY’s initial public offering, dMY issued to third-party investors 23.0 million units, consisting of one share of Class A common stock of dMY (“Class A Common Stock”) and one-half of one warrant, at a price of $10.00 per unit. Each whole warrant entitled the holder to purchase one share of Class A Common Stock at an exercise price of $11.50 per share (the “Public Warrants”). Simultaneously with the dMY initial public offering, 6,600,000 private placement warrants were sold to the Sponsor (the “Private Placement Warrants”) and an additional 75,000 warrants were issued to the Sponsor upon the Closing in connection with converting certain working capital loans into warrants (the “Working Capital Warrants” and together with the Private Placement Warrants, the “Private Warrants” and the Private Warrants together with the Public Warrants, the “Warrants”). Each Private Warrant allows the Sponsor to purchase one share of Class A Common Stock at $11.50 per share. The Company classified the Warrants as derivative liabilities on its consolidated balance sheet at fair value as of each reporting date, with subsequent changes in their respective fair values recognized in its consolidated statement of operations and comprehensive loss. Public Warrants On February 22, 2021, the Company announced the redemption of all the Company’s Public Warrants, which were exercisable for an aggregate of approximately 11.5 million shares of Class A Common Stock at a price of $11.50 per share. During March 2021, 11,442,389 Public Warrants were exercised at a price of $11.50 per share, resulting in cash proceeds of approximately $131.6 million (of which $0.1 million was not received until April 2021) and the issuance of 11,442,389 shares of Class A Common Stock. None of the Public Warrants remain outstanding as of March 31, 2021. The Company determined the fair value of its Public Warrants based on the publicly listed trading price of such warrants as of the valuation date. Accordingly, the Public Warrants are classified as Level 1 financial instruments. The aggregate fair value of the Public Warrants on the dates of exercise throughout March 2021 was $77.5 million. The fair value of the Public Warrants was $88.1 million as of December 31, 2020. Private Warrants On March 26, 2021, the Private Warrants were exercised in full on a cashless basis, resulting in the issuance of 2,571,808 shares of Class A Common Stock. None of the Private Warrants remain outstanding as of March 31, 2021. The estimated fair value of the Private Warrants was determined with Level 3 inputs using the Black-Scholes model. The significant inputs and assumptions in this method are the stock price, exercise price, volatility, risk-free rate, and term or maturity. The underlying stock price input is the closing stock price as of each valuation date and the exercise price is the price as stated in the warrant agreement. The volatility input was determined using the historical volatility of comparable publicly traded companies which operate in a similar industry or compete directly against the Company. Volatility for each comparable publicly traded company is calculated as the annualized standard deviation of daily continuously compounded returns. The Black-Scholes analysis is performed in a risk-neutral framework, which requires a risk-free rate assumption based upon constant-maturity treasury yields, which are interpolated based on the remaining term of the Private Warrants as of each valuation date. The term/maturity is the duration between each valuation date and the maturity date, which is five years following the Closing of the Business Combination, or December 29, 2025. The following table provides quantitative information regarding Level 3 fair value measurements inputs at their measurement dates: March 26, 2021 December 31, 2020 Exercise price $ 11.50 $ 11.50 Stock price $ 15.96 $ 22.76 Volatility 42.6 % 41.4 % Term (years) 4.77 5.0 Risk-free interest rate 0.76 % 0.37 % The fair value of the Private Warrants was $50.8 million and $82.0 million as of March 26, 2021 and December 31, 2020, respectively. The Company recorded $41.8 million to Change in fair value of warrant liabilities on the Company’s condensed consolidated statement of operations and comprehensive loss, representing the change in fair value of the Public Warrants and Private Warrants from December 31, 2020 through the dates of exercise. | 8. Warrant Liabilities As part of dMY’s initial public offering, dMY issued to third-party investors 23.0 million units, consisting of one share of Class A common stock of dMY and one-half of one Public Warrant, at a price of $10.00 per unit. Each whole Public Warrant entitled the holder to purchase one share of Class A Common Stock at an exercise price of $11.50 per share. Simultaneously with the dMY initial public offering, 6,600,000 Private Placement Warrants were sold to the Sponsor and an additional 75,000 Working Capital Warrants were issued to the Sponsor upon the Closing in connection with converting certain working capital loans into warrants. Each Private Warrant allows the Sponsor to purchase one share of Class A Common Stock at $11.50 per share. Subsequent to the Business Combination, 11,500,000 Public Warrants and 6,675,000 Private Warrants remained outstanding as of December 31, 2020. The Private Warrants and the shares of Class A Common Stock issuable upon the exercise of the Private Warrants are not transferable, assignable or salable until after the completion of a Business Combination, subject to certain limited exceptions. Additionally, the Private Warrants are exercisable for cash or on a cashless basis, at the holder’s option, and are non-redeemable so long as they are held by the initial purchasers or their permitted transferees. If the Private Warrants are held by someone other than the initial purchasers or their permitted transferees, the Private Warrants will be redeemable by the Company and exercisable by such holders on the same basis as the Public Warrants. The Company classified the Warrants pursuant to ASC 815-40 as derivative liabilities with subsequent changes in their respective fair values recognized in its consolidated statement of operations and comprehensive income (loss) at each reporting date. At December 31, 2020, approximately 18,175,000 Warrants were outstanding. As of the date of this amended report, none of the Public Warrants or Private Warrants remain outstanding. See Note 18 for additional information. |
Earnout Interets Liability
Earnout Interets Liability | 3 Months Ended |
Mar. 31, 2021 | |
Earnout Interests Liability | |
Earnout Interests Liability | 7. Earnout Interests Liability The earnout interests were subject to certain restrictions on transfer and voting and potential forfeiture pending the achievement of certain earnout targets. The earnout targets included (a) a change of control within three years of the Closing, (b) achieving certain revenue targets for the 2021 year, and (c) achieving certain volume weighted average share prices (“VWAPs”) within three years of the Closing. Earnout interests represented a freestanding financial instrument initially classified as liabilities on the accompanying condensed consolidated balance sheet as the Company determined that these financial instruments were not indexed to the Company’s own equity in accordance with ASC 815, Derivatives and Hedging . Earnout interests were initially recorded at fair value and are adjusted to fair value at each reporting date with changes in fair value recorded in Change in fair value of earnout interests liability in the consolidated statement of operations and comprehensive loss. On January 13, 2021, the earnout interests were fully earned and no longer subject to the applicable restrictions on transfer and voting because the VWAP exceeded $14.00 per share for 10 trading days within a 20 consecutive trading day period following the Closing. As a result, the earnout interests liability was reclassed to equity resulting in 1,212,813 shares of Class A Common Stock held by Darla Anderson, Francesca Luthi, Charles E. Wert and Sponsor and 15,000,000 shares of Class V Common Stock and RSILP Units issued to the Sellers (i.e., non-controlling interests) that were no longer subject to the applicable restrictions. The Company recorded $13.7 million to Change in fair value of earnout interests liability on the Company’s condensed consolidated statement of operations and comprehensive loss, representing the change in fair value of the earnout interests from December 31, 2020 through January 13, 2021 when the earnout interests were no longer subject to the restrictions. |
Equity
Equity | 3 Months Ended | 12 Months Ended |
Mar. 31, 2021 | Dec. 31, 2020 | |
Equity | ||
Equity | 8. Equity Non-Controlling Interest The non-controlling interest represents the RSLIP Units held by holders other than the Company. As of December 31, 2020, the non-controlling interests owned 76.9% of the RSILP Units outstanding (which excluded the earnout interests that did not vest until January 2021). On January 13, 2021, the non-controlling interests increased to 78.1% when the earnout interests were fully earned and no longer subject to the applicable restrictions on transfer and voting. The non-controlling interests ownership decreased during March 2021, reflecting the additional issuance of Class A Common Stock in connection with the exercise of the Warrants and the share-based equity grant (see Note 9 for discussion of share-based compensation). As of March 31, 2021, the non-controlling interests owned 73.0% of the RSILP Units outstanding. Treasury Stock During the three months ended March 31, 2021, the Company repurchased 218,589 shares of its Class A Common Stock at an average price of $15.85 and a total cost of $3.5 million. The repurchased shares are considered issued but not outstanding. | 9. Equity RSI LLC was formed on March 5, 2012 as a Delaware limited liability company. The founding members contributed $27.0 million to RSI LLC prior to 2019 and an additional $14.5 million during 2019. On December 19, 2019, the members of RSI LLC entered into the Agreement of Limited Partnership (the “LP Agreement”) with the Sellers’ Representative to form RSILP. As part of the LP Agreement to become limited partners of RSILP, the members contributed all of their member interests in RSI LLC in exchange for Preferred Units and Common A-1 Units of RSILP (the “RSI LLC Recapitalization"). After the formation of RSILP, employees and affiliated individuals purchased additional Preferred Units and Common A-1 Units of RSILP for approximately $1.0 million. In addition, during the fourth quarter of 2019, RSILP issued profits interests in the form of Common A-2 Units to a significant unitholder, which were classified as equity awards and fully vested on the date of grant. Refer to Note 10 for additional information related to share-based compensation. During 2020, certain limited partners contributed a total of $6.5 million resulting in the issuance of additional Preferred Units and Common A-1 Units of RSILP. In December 2020, RSILP approved a distribution to each limited partner approximating each partner’s share of the estimated tax liability for the year ended December 31, 2020. The total amount distributed to the limited partners was $5.2 million. On December 29, 2020, in contemplation of the Business Combination, RSILP’s outstanding equity interests (including Preferred Units, Common A-1 Units and Common A-2 Units) and vested share-based liability awards (i.e., Common B-1 Units) were converted to 172.5 million Class A Common Units of RSILP. In connection with the Business Combination, 12.5 million Class A Common Units of RSILP (the Purchase RSILP Units) were transferred to the Special Limited Partner for cash consideration of $125.0 million In connection with the Business Combination, the Company’s previously reported Members’ Deficit and Preferred Units balances as of December 31, 2018, the earliest period presented, have been adjusted for the retrospective application of the RSI LLC Recapitalization and the Reverse Recapitalization. The total amount of the Company’s authorized capital stock consists of 951,000,000 shares, consisting of (i) 1,000,000 shares of preferred stock, par value $0.0001 per share (“Preferred Stock”), (ii) 750,000,000 shares of Class A Common Stock, and (iii) 200,000,000 shares of Class V Common Stock (together with the Class A Common Stock, the “Common Stock”). As of December 31, 2020, there were 44,792,517 shares of Class A Common Stock outstanding (inclusive of 1,212,813 shares relating to earnout interests) and 160,000,000 shares of Class V Common Stock outstanding (inclusive of 15,000,000 shares relating to earnout interests). Voting Rights Each holder of record of Common Stock, as such, shall be entitled to one (1) vote for each share of Common Stock held of record by such holder on all matters on which stockholders generally are entitled to vote or holders of Common Stock as a separate class are entitled to vote, including the election or removal of directors (whether voting separately as a class or together with one or more classes of the Company’s capital stock); provided, however, that to the fullest extent permitted by law, holders of Common Stock, as such, shall have no voting power with respect to, and shall not be entitled to vote on, any amendment to the Second A&R Certificate of Incorporation of the Company (including any certificate of designations relating to any series of Preferred Stock) that relates solely to the terms of one or more outstanding series of Preferred Stock if the holders of such affected series are entitled, either separately or together with the holders of one or more other such series, to vote thereon pursuant to the Second A&R Certificate of Incorporation of the Company (including any certificate of designations relating to any series of Preferred Stock) or pursuant to the Delaware General Corporation Law. The holders of Class A Common Stock and Class V Common Stock having the right to vote in respect of such Common Stock shall vote together as a single class (or, if the holders of one or more series of Preferred Stock are entitled to vote together with the holders of Common Stock having the right to vote in respect of such Common Stock, as a single class with the holders of such other series of Preferred Stock) on all matters submitted to a vote of the stockholders having voting rights generally. Dividend Rights Subject to applicable law and the rights, if any, of the holders of any outstanding series of Preferred Stock or any class or series of stock having a preference over or the right to participate with the Class A Common Stock with respect to the payment of dividends and other distributions in cash, stock of any corporation or property of the Company, the holders of Class A Common Stock shall be entitled to receive ratably such dividends and other distributions as may from time to time be declared by the Board in its discretion out of the assets of the Company that are by law available therefor at such times and in such amounts as the Board in its discretion shall determine. Dividends and other distributions shall not be declared or paid on the Class V Common Stock. Rights Upon Liquidation In the event of any voluntary or involuntary liquidation, dissolution or winding up of the affairs of the Company, after payment or provision for payment of the debts and other liabilities of the Company and of the preferential and other amounts, if any, to which the holders of Preferred Stock or any class or series of stock having a preference over the Class A Common Stock as to distributions upon dissolution or liquidation or winding up shall be entitled, the holders of all outstanding shares of Class A Common Stock shall be entitled to receive the remaining assets of the Company available for distribution ratably in proportion to the number of shares held by each such stockholder. The holders of shares of Class V Common Stock shall not be entitled to receive any assets of the Company in the event of any voluntary or involuntary liquidation, dissolution or winding up of the affairs of the Company. Cancellation of Class V Common Stock In the event that any outstanding share of Class V Common Stock shall cease to be held directly or indirectly by the holder of the corresponding RSILP Unit (as defined in the RSILP A&R LPA), as set forth in the books and records of RSILP, including by virtue of any divestiture by such holder of such corresponding RSILP Unit, such share of Class V Common Stock shall automatically and without further action on the part of the Company or any holder of Class V Common Stock be transferred to the Company and cancelled for no consideration. The Company shall not issue additional shares of Class V Common Stock after the Closing of the transactions contemplated by the Business Combination, other than in connection with the valid issuance of RSILP Units in accordance with the RSILP A&R LPA. Other Rights If the Company at any time combines or subdivides (by any stock split, stock dividend, recapitalization, reorganization, merger, amendment of the Second A&R Certificate of Incorporation of the Company, scheme, arrangement or otherwise) the number of shares of Class A Common Stock into a greater or lesser number of shares, the shares of Class V Common Stock outstanding immediately prior to such subdivision shall be proportionately similarly combined or subdivided such that the ratio of shares of outstanding Class V Common Stock to shares of outstanding Class A Common Stock immediately prior to such subdivision shall be maintained immediately after such combination or subdivision. Any such adjustment shall become effective at the close of business on the date the combination or subdivision becomes effective. Preferred Stock The Board has the authority to issue shares of preferred stock at any time and from time to time, to provide, out of the unissued shares of Preferred Stock, for one or more series of Preferred Stock and, with respect to each such series, to fix the number of shares constituting such series and the designation of such series, the voting powers (if any) of the shares of such series, and the powers, preferences and relative, participating, optional or other special rights, if any, and any qualifications, limitations or restrictions thereof, of the shares of such series and to cause to be filed with the Secretary of State of the State of Delaware a certificate of designations with respect thereto. The powers, preferences and relative, participating, optional and other special rights of each series of Preferred Stock, and the qualifications, limitations or restrictions thereof, if any, may differ from those of any and all other series at any time outstanding. At December 31, 2020, there were no shares of preferred stock outstanding. Non-Controlling Interest The non-controlling interest represents the RSLIP Units held by holders other than the Company. As of December 31, 2020, the non-controlling interests owned 76.9% of the RSILP Units outstanding (which excludes the earnout interests that did not vest until January 2021). The non-controlling interests’ ownership percentage can fluctuate over time as RSILP earnout interests vest and as the Sellers elect to exchange RSILP Units for Class A Common Stock. The Company has consolidated the financial position and results of operations of RSILP and reflected the proportionate interest held by the Sellers as non-controlling interest. |
Share-Based Compensation
Share-Based Compensation | 3 Months Ended | 12 Months Ended |
Mar. 31, 2021 | Dec. 31, 2020 | |
Share-Based Compensation | ||
Share-Based Compensation | 9. Share-Based Compensation Incentive Plan The Company adopted the Rush Street Interactive, Inc. 2020 Omnibus Equity Incentive Plan, as amended from time to time (the “2020 Plan”), to attract, retain and incentivize employees, consultants and independent directors who will contribute to the success of the Company. Awards that may be granted under the 2020 Plan include incentive stock options, non-qualified stock options, stock appreciation rights, restricted awards, performance share awards, cash awards and other equity-based awards. There is an aggregate of 13.4 million shares of Class A Common Stock reserved under the 2020 Plan, which may consist of authorized and unissued shares, treasury shares or shares reacquired by the Company. The 2020 Plan will terminate on December 29, 2030. Restricted stock unit (“RSU”) activity for the three months ended March 31, 2021 is as follows: Weighted average Number of units grant price Unvested balance at December 31, 2020 — $ — Granted 3,647,504 15.85 Vested (719,479) 15.85 Unvested balance at March 31, 2021 2,928,025 $ 15.85 The aggregate fair value of the RSUs granted was approximately $57.8 million. As of March 31, 2021, the Company had unrecognized stock-based compensation expense related to RSUs of approximately $46.2 million, which is expected to be recognized over the remaining weighted-average vesting period of 3.74 years. During the three-month period ended March 31, 2020, approximately $13.5 million was recognized as share-based compensation expense related to the profit interests granted by RSILP prior to the Business Combination. Share-based compensation expense for the three months ended March 31, 2021 and 2020 is as follows: Three months ended March 31, ($in thousands) 2021 2020 Costs of revenue $ 915 $ — Advertising and promotions 1,698 — General administration and other 8,963 13,490 Total share-based compensation expense $ 11,576 $ 13,490 | 10. Share-Based Compensation Incentive Plan The Company created the Rush Street Interactive, Inc. 2020 Omnibus Equity Incentive Plan, as amended from time to time (the “2020 Plan”), to attract, retain and incentivize employees, consultants and independent directors that will contribute to the success of the Company. Awards that may be granted under the 2020 Plan include incentive stock options, non-qualified stock options, stock appreciation rights, restricted awards, performance share awards, cash awards and other equity-based awards. The aggregate number of shares reserved under the 2020 Plan is approximately 13.4 million shares of Class A Common Stock and may consist of authorized and unissued shares, treasury shares or shares reacquired by the Company. The 2020 Plan terminates on December 29, 2030. As of December 31, 2020, no awards had been granted pursuant to the 2020 Plan. Profit Interests Prior to the Business Combination, RSILP granted Common A-2 Units and Common B-1 Units to a significant unit holder and employees, respectively, that were designated as profit interests. Both issuances are accounted for under ASC 718. As part of the Business Combination, the remaining unvested Common B-1 Units immediately vested, and all of the Common A-2 and Common B-1 Units were exchanged for Class A Common Units in RSILP (see Note 9). Common A‑2 Units RSILP issued profits interests in the form of 414,894 and 2,714,850 Common A-2 Units to a significant unit holder during the years ended December 31, 2020 and 2019, respectively, with a participation threshold of $0. The Common A-2 Units were fully vested on the date of grant. The Common A-2 Units were classified as equity awards, and equity-based compensation expense was based on the grant date fair value of the awards, determined using the Black-Scholes-Merton pricing model and the assumptions noted in the table below. Common B‑1 Units RSILP issued profit interests in the form of 683,889 and 4,475,029 Common B-1 Units to certain employees during the years ended December 31, 2020 and 2019, respectively, with a participation threshold calculated by the total unreturned preferred unit capital plus a 10% preferred return to preferred capital contributed. Holders of Common B-1 Units were entitled to share in distributions after defined distributions have been made to Preferred Unit holders and Common A-2 Unit holders. The Common B-1 Units were fully vested as of December 29, 2020, the date of the Business Combination. Because the Put Price is a negotiated amount and not at fair value, the Common B-1 Units were liability-classified and revalued each period based on their current fair value with compensation costs recognized over the service period. Upon exchange of the Class B-1 Units for Class A Common Units in the Reverse Recapitalization, the share-based liability associated with Class B-1 Units was settled and the fair value of the share-based liability was reclassified to equity. The fair value per Common B-1 Unit, determined using the Black-Scholes-Merton pricing model and the assumptions noted in the table below, was $29.15 and $1.84 as of December 29, 2020 and December 31, 2019, respectively. The summary of B‑1 Units’ activity is as follows: Number of Units Unvested balance at December 31, 2018 — Granted 4,475,029 Vested (3,952,943) Unvested balance at December 31, 2019 522,086 Granted 683,889 Vested (1,205,975) Unvested balance at December 31, 2020 — The fair value for both the Common A‑2 Units and the Common B‑1 Units was determined using the Black-Scholes-Merton pricing model with the following assumptions: December 29, December 31, 2020 2019 Dividend yield — — Volatility factor 45 % 45 % Risk-free interest rate 0.12 % 1.69 % Time to liquidity (in years) — 5.0 Lack of marketability discount % 33.0 % The equity price per unit was based on an independent valuation of RSILP. The independent valuation estimated the equity value, which was then allocated to each unit class using the Black-Scholes-Merton pricing model. The respective unit class values for Common A-2 and B-1 Units were divided by the Common A-2 Units outstanding and Common B-1 Units outstanding, respectively, at the date of grant. The expected life of profit interests awards granted during the period presented was determined based on a permitted simplified method, which is based on the vesting period and contractual term for each tranche of awards. The risk-free rate for periods within the contractual life of the profit interest award is based on an extrapolated 5-year U.S. Treasury bond rate in effect at the time of grant given the expected time to liquidity. RSILP utilized a weighted rate for expected volatility based on a representative peer group of comparable public companies. The dividend yield was set at zero as the underlying security does not pay a dividend. The protective put method was used to estimate the discount for lack of marketability inherent to the awards due to the lack of liquidity associated with the restrictions on the Common A‑2 Units and Common B‑1 Units. During the years ended December 31, 2020 and 2019, approximately $1.7 million and $6.1 million, respectively, was recognized as share-based compensation expense related to the Common A‑2 Units. During the years ended December 31, 2020 and 2019, approximately $143.0 million and $7.3 million, respectively, was recognized as share-based compensation expense related to the Common B‑1 Units. |
Income Taxes
Income Taxes | 3 Months Ended | 12 Months Ended |
Mar. 31, 2021 | Dec. 31, 2020 | |
Income Taxes | ||
Income Taxes | 10. Income Taxes Income Tax Provision for the three months ended March 31, 2021 and 2020 is as follows: Three months ended March 31, ($in thousands) 2021 2020 Income tax provision $ 804 $ — The effective tax rates for the three months ended March 31, 2021 and 2020 were 110.44% and 0%, respectively. The difference between the Company's effective tax rate for the period ended March 31, 2021 and the U.S. statutory tax rate of 21% was primarily due to a full valuation allowance recorded on the Company’s net U.S. deferred tax assets and income tax rate differences related to its foreign operations for which both current and deferred taxes are recorded. The Company did not record a tax provision for the period ended March 31, 2020 primarily due to RSILP's status as a pass-through entity for U.S. federal income tax purposes. The Company evaluates the realizability of the deferred tax assets on a quarterly basis and establishes a valuation allowance when it is more likely than not that all or a portion of a deferred tax asset may not be realized. The Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”) was enacted on March 27, 2020 in the United States to provide emergency assistance to individuals and businesses affected by the COVID-19 pandemic. The CARES Act includes temporary changes to both income and non-income-based tax laws. For the year ended December 31, 2020, the impact of the CARES Act was immaterial to the Company’s tax provision. Future regulatory guidance under the CARES Act or additional legislation enacted by Congress could impact our tax provision in future periods. In connection with the Business Combination, the Special Limited Partner entered into the Tax Receivable Agreement, which generally provides for the payment by it of 85% of certain net tax benefits, if any, that the Company (including the Special Limited Partner) realize (or in certain cases is deemed to realize) as a result of an increase in tax basis and tax benefits related to the transactions contemplated under the Business Combination Agreement and the exchange of Retained RSILP Units for Class A Common Stock (or cash at the Company’s option) pursuant to the RSILP’s amended and restated limited partnership agreement and tax benefits related to entering into the Tax Receivable Agreement, including tax benefits attributable to payments under the Tax Receivable Agreement. These payments are the obligation of the Special Limited Partner and not of RSILP. The actual increase in the Special Limited Partner’s allocable share of RSILP’s tax basis in its assets, as well as the amount and timing of any payments under the Tax Receivable Agreement, will vary depending upon a number of factors, including the timing of exchanges, the market price of our Class A Common Stock at the time of the exchange and the amount and timing of the recognition of our and our consolidated subsidiaries’ (including the Special Limited Partner’s) income. Based primarily on historical losses of RSILP, management has determined it is more-likely-than-not that the Company will be unable to utilize its deferred tax assets subject to the Tax Receivable Agreement; therefore, management has not recorded the deferred tax asset or a corresponding liability under the Tax Receivable Agreement related to the tax savings the Company may realize from the utilization of tax deductions related to basis adjustments created by the transactions in the Business Combination Agreement. The unrecognized Tax Receivable Agreement liability is $51.6 million as of both March 31, 2021 and December 31, 2020. | 12. Income Taxes As a result of the Business Combination, the Company owned, indirectly through the Special Limited Partner, approximately 23.1% of the Common Units of RSILP, and as a result, gained control of RSILP as described in Note 4. RSILP is treated as a partnership for U.S. federal and most applicable state and local income tax purposes. As a partnership, RSILP is not subject to U.S. federal and certain state and local income taxes. Any taxable income or loss generated by RSILP is passed through to and included in the taxable income or loss of the RSILP Unit Holders and the Company, on a pro rata basis. The Company is subject to U.S. federal income taxes, in addition to state and local income taxes with respect to our allocable share of any taxable income or loss of RSILP, as well as any stand-alone income or loss generated by the Company. Income Tax (Benefit) Expense The components of the income tax (benefit) expenses are: Year Ended December 31, 2020 2019 Current income taxes: Federal $ — $ — State and local — — Foreign 2,708 — 2,708 — Deferred income taxes: Federal — — State and local — — Foreign 211 — 211 — Income tax (benefit) expense $ 2,919 $ — Reconciliations of income tax expense computed at the U.S. federal statutory income tax rate to the recognized income tax expense and the U.S. statutory income tax rate to our effective tax rates are as follows: Year Ended December 31, 2020 2019 (Restated) Net loss before income taxes $ (128,726) $ (22,450) Less: net loss before Reverse Recapitalization (133,404) (22,450) Less: net income before income taxes attributable to non-controlling interest 3,597 — Net income attributable to Rush Street Interactive Inc. before income taxes 1,081 — Income tax expense (benefit) at the federal statutory rate 227 — State income taxes, net of federal benefit 100 — Foreign operations 2,919 — Change in valuation allowance (327) — Income tax (benefit) expense $ 2,919 $ — Deferred Tax Assets and Liabilities The Company’s deferred tax position reflects the net tax effects of the temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax reporting. Significant components of the deferred tax assets and liabilities are as follows: Year Ended December 31, 2020 2019 Deferred tax assets: (Restated) Investment in subsidiaries $ 127,171 $ — Net operating losses 136 — Imputed interest 1,202 — Other assets 39 — Total gross deferred tax assets 128,548 — Valuation allowance (128,511) — Total deferred tax assets, net of valuation allowance 37 — Deferred tax liabilities: Investment in subsidiaries — — Total gross deferred tax liabilities — — Net deferred tax assets $ 37 $ — As of December 31, 2020, the Company had approximately $0.5 million each of federal and state net operating loss carryovers. If not utilized, the entire federal net operating loss carryforward can be carried forward indefinitely. State net operating loss carryovers will expire in varying amounts beginning in 2031. The Company regularly reviews its deferred tax assets, including net operating loss carryovers, for recoverability, and a valuation allowance is provided when it is more-likely-than-not that some portion or all of a deferred tax asset may not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which the temporary differences are deductible. In assessing the need for a valuation allowance, the Company makes estimates and assumptions regarding projected future taxable income, its ability to carry back operating losses to prior periods, the reversal of deferred tax liabilities and the implementation of tax planning strategies. Based on our cumulative earnings history and forecasted future sources of taxable income, the Company has determined it is not more-likely-than-not to realize existing deferred tax assets and thus has recorded a valuation allowance. As the Company reassesses these assumptions in the future, changes in forecasted taxable income may alter this expectation and may result in an increase to the valuation allowance and an increase in the effective tax rate. The Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”) was enacted on March 27, 2020 in the United States to provide emergency assistance to individuals and businesses affected by the COVID-19 pandemic. The CARES Act includes temporary changes to both income and non-income-based tax laws. For the year ended December 31, 2020, the impact of the CARES Act was immaterial to the Company’s tax provision. Future regulatory guidance under the CARES Act or additional legislation enacted by Congress in connection with the COVID-19 pandemic could impact our tax provision in future periods. Uncertain Tax Positions The Company evaluates its tax positions and recognizes tax benefits that, more-likely-than-not, will be sustained upon examination based on the technical merits of the position. The Company does not have any unrecognized tax benefits as of December 31, 2020. The Company will file initial year federal and state tax returns for tax year 2020, which is the first tax year subject to examination by taxing authorities. Additionally, although RSILP is treated as a partnership for U.S. federal and state income taxes purposes, it is still required to file an annual U.S. Return of Partnership Income, which is subject to examination by the Internal Revenue Service ("IRS"). The statute of limitations has expired for tax years through 2016 for RSILP. Tax Receivable Agreement Pursuant to RSILP's election under Section 754 of the Internal Revenue Code (the "Code"), the Company expects to obtain an increase in our share of the tax basis in the net assets of RSILP when RSILP Units are redeemed or exchanged by the unit holders and other qualifying transactions. The Company plans to make an election under Section 754 of Code for each taxable year in which a redemption or exchange of RSILP Units occur. The Company intends to treat any redemptions and exchanges of RSILP Units by the unit holders as direct purchases of RSILP Units for U.S. federal income tax purposes. These increases in tax basis may reduce the amounts that the Company would otherwise pay in the future to various tax authorities. These increases in tax basis may also decrease gains (or increase losses) on future dispositions of certain capital assets to the extent tax basis is allocated to those capital assets. In connection with the Business Combination, the Special Limited Partner entered into the Tax Receivable Agreement, which generally provides for the payment by it of 85% of certain net tax benefits, if any, that the Company (including the Special Limited Partner) realize (or in certain cases is deemed to realize) as a result of these increases in tax basis and tax benefits related to the transactions contemplated under the Business Combination Agreement and the exchange of Retained RSILP Units for Class A Common Stock (or cash at the Company’s option) pursuant to the RSILP A&R LPA and tax benefits related to entering into the Tax Receivable Agreement, including tax benefits attributable to payments under the Tax Receivable Agreement. These payments are the obligation of the Special Limited Partner and not of RSILP. The actual increase in the Special Limited Partner’s allocable share of RSILP’s tax basis in its assets, as well as the amount and timing of any payments under the Tax Receivable Agreement, will vary depending upon a number of factors, including the timing of exchanges, the market price of our Class A Common Stock at the time of the exchange and the amount and timing of the recognition of our and our consolidated subsidiaries’ (including the Special Limited Partner’s) income. While many of the factors that will determine the amount of payments that the Special Limited Partner will make under the Tax Receivable Agreement are outside of the Company's control, the Company expects that the payments the Special Limited Partner will make under the Tax Receivable Agreement will be substantial and could have a material adverse effect on the financial condition of the Company. Based primarily on historical losses of RSILP, management has determined it is more-likely-than-not that the Company will be unable to utilize its deferred tax assets subject to the Tax Receivable Agreement; therefore, management has not recorded the deferred tax asset or a corresponding liability under the Tax Receivable Agreement related to the tax savings the Company may realize from the utilization of tax deductions related to basis adjustments created by the transactions in the Business Combination Agreement. The unrecognized Tax Receivable Agreement liability as of December 31, 2020 is $51.6 million. |
Loss Per Share
Loss Per Share | 3 Months Ended | 12 Months Ended |
Mar. 31, 2021 | Dec. 31, 2020 | |
Loss Per Share | ||
Loss Per Share | 11. Loss Per Share Basic net loss per share of Class A Common Stock is computed by dividing net loss attributable to RSI by the weighted-average number of shares of Class A Common Stock outstanding during the period. Diluted net loss per share of Class A Common Stock is computed by dividing net loss attributable to RSI, adjusted for the assumed exchange of all potentially dilutive securities, by the weighted-average number of shares of Class A Common Stock outstanding adjusted to give effect to potentially dilutive shares. Prior to the Business Combination, the membership structure of RSILP included units that had profit interests. The Company analyzed the calculation of net loss per unit for periods prior to the Business Combination and determined that it resulted in values that would not be meaningful to the users of these condensed consolidated financial statements. Therefore, net loss per share information has not been presented for periods prior to the Closing of the Business Combination on December 29, 2020. The basic and diluted loss per share for the three months ended March 31, 2021 are as follows (amounts in thousands, except for share and per share amounts): Numerator: Net loss $ (76) Less: Net loss attributable to noncontrolling interests (59) Net loss attributable to Rush Street Interactive, Inc. – basic $ (17) Effect of dilutive securities: Warrants, net of amounts attributable to noncontrolling interests (9,569) Net loss attributable to Rush Street Interactive, Inc. – diluted $ (9,586) Denominator: Weighted average common shares outstanding – basic 46,955,262 Weighted average effect of dilutive securities: Public Warrants (1) 3,770,106 Private Placement and Working Capital Warrants (1) 2,690,120 Weighted average common shares outstanding – diluted 53,415,488 Net loss per Class A common share – basic $ (0.00) Net loss per Class A common share – diluted $ (0.18) (1) Calculated using the treasury stock method. Shares of the Company’s Class V Common Stock do not participate in the earnings or losses of the Company and are therefore not participating securities. As such, separate presentation of basic and diluted earnings per share of Class V Common Stock under the two-class method has not been presented. The Company excluded the following securities from its computation of diluted shares outstanding, as their effect would have been anti-dilutive: RSILP Units (1) 160,000,000 Unvested Restricted Stock Units 2,928,025 (1) These RSILP Units are held by the Sellers pursuant to the Business Combination, and may be exchanged, subject to certain restrictions, for Class A Common Stock. Upon exchange of an RSILP Unit, a share of Class V Common Stock is cancelled. | 13. Earnings (Loss) Per Share Basic net earnings per share of Class A Common Stock is computed by dividing net earnings attributable to RSI by the weighted-average number of shares of Class A Common Stock outstanding during the period. Diluted net loss per share of Class A Common Stock is computed by dividing net income attributable to RSI, adjusted for the assumed exchange of all potentially dilutive securities, by the weighted-average number of shares of Class A Common Stock outstanding adjusted to give effect to potentially dilutive shares. Prior to the Business Combination, the membership structure of RSILP included units which had profit interests. The Company analyzed the calculation of net loss per unit for periods prior to the Business Combination and determined that it resulted in values that would not be meaningful to the users of these audited consolidated financial statements. Therefore, net earnings per share information has not been presented for periods prior to the Business Combination on December 29, 2020. The basic and diluted earnings (loss)per share for the year ended December 31, 2020 represent only the period of December 29, 2020 to December 31, 2020. The computation of net earnings per share attributable to RSI and weighted-average shares of the Company’s Class A Common Stock outstanding for the year ended December 31, 2020 are as follows (amounts in thousands, except for share and per share amounts): Numerator: Net loss $ (131,645) Less: Net loss attributable to RSILP prior to the Business Combination (136,323) Less: Net income attributable to noncontrolling interests after the Business Combination 3,597 Net income attributable to Rush Street Interactive, Inc. – basic $ 1,081 Effect of dilutive securities: Public, Private Placement and Working Capital Warrants, net of amounts attributable to noncontrolling interests (1,656) Net loss attributable to Rush Street Interactive, Inc. – diluted $ (575) Denominator: Weighted average common shares outstanding – basic 43,579,704 Weighted average effect of dilutive securities: Public Warrants (1) Private Placement and Working Capital Warrants (1) Weighted average common shares outstanding - diluted Net income per Class A common share – basic $ Net loss per Class A common share – diluted $ (0.01) (1) Calculated using the treasury stock method. Shares of the Company’s Class V Common Stock do not participate in the earnings or losses of the Company and are therefore not participating securities. As such, separate presentation of basic and diluted earnings per share of Class V common stock under the two-class method has not been presented. The Company excluded the following securities from its computation of diluted shares outstanding, as their effect would have been anti-dilutive: RSILP Units (1) 160,000,000 Earnout Interests – Class A Common Stock (2) 1,212,813 (1) These RSILP Units are held by the Sellers, pursuant to the Business Combination, and may be exchanged, subject to certain restrictions, for Class A Common Stock. Upon exchange of an RSILP Unit, a share of Class V Common Stock is cancelled. These amounts include 15,000,000 RSILP Units issued to the Sellers in the Business Combination that remain subject to certain restrictions pending the achievement (if any) of certain earnout targets. (2) These Earnout Interests represent the Class A common shares held by the Founder Holders pursuant to the Business Combination. |
Related Parties
Related Parties | 3 Months Ended | 12 Months Ended |
Mar. 31, 2021 | Dec. 31, 2020 | |
Related Parties | ||
Related Parties | 12. Related Parties Services Agreement At the Closing, Rush Street Gaming, LLC (“RSG”), a current affiliate of the Company controlled by Neil Bluhm and Greg Carlin, entered into a Services Agreement (the “Services Agreement”), pursuant to which, among other things, RSG and its affiliates provide certain specified services to the Company for a period of two years following the Closing, subject to extension and early termination, including, without limitation, services relating to legal and compliance, human resources and information technology (in each case as more fully described in the Services Agreement). RSG had provided similar services to RSILP prior to the Business Combination and the Services Agreement represents a continuation of those services and support. As compensation for RSG’s provision of these services, the Company reimburses RSG for (i) all third party costs, including fees and costs incurred in connection with any required consents, incurred in connection with the provision of services, (ii) its reasonable and documented out-of-pocket travel and related expenses as approved by the Company, and (iii) an allocable portion of payroll, benefits and overhead (calculated at 150% of an employee’s salary, bonus and benefits cost) with respect to RSG’s or its affiliates’ employees who perform or otherwise assist in providing the services. Expenses relating to support services were $0.3 million and $0.2 million for the three months ended March 31, 2021 and 2020, respectively, while payables due to RSG for support services were $0.3 million at March 31, 2021 and December 31, 2020. These support services are recorded as General administration and other in the accompanying condensed consolidated statements of operations and comprehensive loss and any payables to RSG are recorded as Due to affiliates within the accompanying condensed consolidated balance sheets. Affiliated Land-Based Casinos Neil Bluhm and Greg Carlin are owners, directors and/or officers of certain land-based casinos. The Company has entered into certain agreements with these affiliated land-based casinos that create strategic partnerships aimed to capture the online gaming, online sports betting and retail sports services markets in the various states and municipalities where the land-based casinos operate. Generally, the Company pays a royalty fee to the land-based casino (calculated as a percentage of the Company’s revenue less reimbursable costs as defined in the agreement) in exchange for the right to operate real-money online casino and/or online sports betting under the gaming license of the land-based casinos. Royalties paid to affiliated casinos were $12.5 million and $4.8 million for the three months ended March 31, 2021 and 2020, respectively, which were net of any consideration received from the affiliated casino for reimbursable costs, as well as costs that are paid directly by the affiliated casino on the Company’s behalf. Net royalties paid are recorded as Costs of revenue in the accompanying condensed consolidated statements of operations and comprehensive loss. In certain cases, the affiliate casino maintains the bank account that processes cash deposits and withdrawals for RSI customers. Accordingly, at any point in time, the Company will record a receivable from the affiliate, representing RSI total gaming revenue (with RSI customers) that was collected by the affiliate, less consideration payable to the affiliate for use of its license, which is offset by any consideration received from the affiliate based on the terms of the agreement. Receivables due from affiliated land-based casinos were $30.0 million and $28.8 million at March 31, 2021 and December 31, 2020, respectively. In addition, the Company provides retail sports services to certain affiliated land-based casinos in exchange for a monthly commission based on the land-based casino’s retail sportsbook revenue. Services include ongoing management and oversight of the retail sportsbook, technical support for the land-based casino’s customers, risk management, advertising and promotion, and support for the third-party vendor’s sports betting equipment. Revenue recognized relating to retail sports services provided to affiliated land-based casinos for the three months ended March 31, 2021 and 2020 were not material to the condensed consolidated financial statements. Any payables due to the affiliated land-based casinos are netted against affiliate receivables to the extent a right of offset exists and were not material to the consolidated financial statements as of March 31, 2021 or December 31, 2020. | 14. Related Parties Prior to the Business Combination, RSILP’s principal unit holders included Neil G. Bluhm, Chairman, and NGB 2013 Grandchildren’s Dynasty Trust (collectively, “Bluhm and Trust”) and Gregory A. Carlin, Chief Executive Officer, and Greg and Marcy Carlin Family Trust (collectively, “Carlin and Trust”). Bluhm and Trust and Carlin and Trust had interests in RSILP of approximately 73% and 20%, respectively. Both Bluhm and Trust and Carlin and Trust are the owners of the Sellers’ Representative, which had an interest of approximately 1% in RSILP. Neil Bluhm and Gregory Carlin maintain ownership in RSILP and have control over governance and general operations. At the Closing, the Company and RSI GP entered into the Amended and Restated Limited Liability Company Agreement of RSI GP, pursuant to which, among other things, the parties established a board of managers of RSI GP, which is initially comprised of Neil Bluhm, Gregory Carlin and Richard Schwartz, President, to direct and exercise control over all activities of RSI GP, including RSI GP’s right to manage and control RSILP. Amended and Restated Agreement of Limited Partnership of RSILP At the Closing, the Company, the Special Limited Partner, RSI GP, RSILP and the Sellers entered into the RSILP A&R LPA. Management RSI GP, as the general partner of RSI following the Closing, has the sole authority to manage the business and affairs of RSI in accordance with the RSILP A&R LPA or applicable law, including laws relating to gaming. The business, property and affairs of RSILP will be managed solely by the general partner, and the general partner cannot be removed or replaced except with the consent of a majority in interests of the partners of RSILP and the Company. The rights of the general partner’s board of managers are governed by the general partner’s limited liability company agreement, which may be amended or modified from time to time by the Company. Tax Distributions The RSILP A&R LPA provides quarterly tax distributions payable in accordance with the RSILP A&R LPA to the holders of RSILP Units on a pro rata basis based upon an agreed-upon formula related to the taxable income of RSILP allocable to holders of RSILP Units. Generally, these tax distributions will be computed based on RSILP’s estimate of the taxable income of RSILP allocable to each holder of RSILP Units (based on certain assumptions) multiplied by an assumed tax rate equal to the highest effective marginal combined United States federal, state and local income tax rate prescribed for an individual or corporation resident in New York, California or Illinois (whichever results in the application of the highest state and local tax rate), subject to various adjustments. Distributions, including tax distributions, will be made to holders of RSILP Units on a pro rata basis. Transfer Restrictions The RSILP A&R LPA contains restrictions on transfers of units and requires the prior consent of the general partner for such transfers, except, in each case, for certain transfers to permitted transferees under certain conditions and exchanges of RSILP Units for shares of Class A Common Stock after the six-month anniversary of the Closing. Exchange of RSILP Units for Class A Common Stock The Sellers are, from and after the six-month anniversary of the Closing up to four times per calendar year, able to exchange all or any portion of their RSILP Units, together with the cancelation of an equal number of shares of Class V Common Stock, for a number of shares of Class A Common Stock equal to the number of exchanged RSILP Units by delivering a written notice to RSILP, with a copy to the Special Limited Partner; provided that no holder of RSILP Units may exchange less than 1,000 RSILP Units in any single exchange unless exchanging all of the RSILP Units held by such holder at such time, subject in each case to the limitations and requirements set forth in the RSILP A&R LPA regarding such exchanges. Notwithstanding the foregoing, the Special Limited Partner may, at its sole discretion, in lieu of delivering shares of Class A Common Stock for any RSILP Units surrendered for exchange, pay an amount in cash per RSILP Unit equal to the 5-day VWAP of the Class A Common Stock on the date of the receipt of the written notice of the exchange. Exchange Ratio For each RSILP Unit exchanged, one share of Class V Common Stock will be canceled, and one share of Class A Common Stock will be issued to the exchanging member. If the Class A Common Stock is converted or changed into another security, securities or other property, on any subsequent exchange an exchanging RSI Unit holder will be entitled to receive such security, securities or other property. Restrictions on Exchange In certain circumstances, RSI GP may limit the rights of holders of RSILP Units to exchange their RSILP Units under the RSILP A&R LPA if RSI GP determines in good faith that such restrictions are necessary so that RSILP will not be classified as a “publicly traded partnership” under applicable tax laws and regulations. Services Agreement At the Closing, Rush Street Gaming, LLC (“RSG”), a current affiliate of the Company controlled by Neil Bluhm and Greg Carlin, entered into a Services Agreement (the “Services Agreement”), pursuant to which, among other things, RSG and its affiliates provide certain specified services to the Company for a period of two years following the Closing, subject to extension and early termination, including, without limitation, services relating to legal and compliance, human resources and information technology (in each case as more fully described in the Services Agreement). RSG had provided similar services to RSILP prior to the Business Combination and the Services Agreement represents a continuation of those services and support. As compensation for RSG’s provision of these services, the Company reimburses RSG for (i) all third party costs, including fees and costs incurred in connection with any required consents, incurred in connection with the provision of services, (ii) its reasonable and documented out-of-pocket travel and related expenses as approved by the Company, and (iii) an allocable portion of payroll, benefits and overhead (calculated at 150% of an employee’s salary, bonus and benefits cost) with respect to RSG’s or its affiliates’ employees who perform or otherwise assist in providing the services. Expenses relating to support services were $1.3 million and $0.6 million for the years ended December 31, 2020 and 2019, respectively, while payables due to RSG for support services were $0.3 million and $0.2 million at December 31, 2020 and December 31, 2019, respectively. These support services are recorded as general administration and other in the accompanying consolidated statements of operations and comprehensive income (loss) and any payables to RSG are recorded as due to affiliates within the accompanying consolidated balance sheets. Affiliated Land-Based Casinos Neil Bluhm and Greg Carlin are owners and officers of certain land-based casinos. The Company has entered into certain agreements with these affiliated land-based casinos that create strategic partnerships aimed to capture the online gaming, online sports betting and retail sports services markets in the various states and municipalities where the land-based casinos operate. Generally, the Company pays a royalty fee to the land-based casino (calculated as a percentage of the Company’s revenue less reimbursable costs as defined in the agreement) in exchange for the right to operate real-money online casino and/or online sports betting under the gaming license of the land-based casinos. Royalties paid to affiliated casinos were $135.5 million and $6.9 million for the years ended December 31, 2020 and December 31, 2019, which were net of any consideration received from the affiliated casino for reimbursable costs. Net royalties paid are recorded as Costs of revenue in the accompanying consolidated statements of operations and comprehensive income (loss). In certain cases, the affiliate casino maintains the bank account that processes cash deposits and withdrawals for RSI customers. Accordingly, at any point in time, the Company will record a receivable from the affiliate, representing RSI total gaming revenue (with RSI customers) that was collected by the affiliate, less consideration payable to the affiliate for use of its license, which is offset by any consideration received from the affiliate based on the terms of the agreement. Receivables due from affiliated land-based casinos were $28.8 million and $3.1 million at December 31, 2020 and 2019, respectively. In addition, the Company provides retail sports services to certain affiliated land-based casinos in exchange for a monthly commission based on the land-based casino’s retail sportsbook revenue. Services include ongoing management and oversight of the retail sportsbook, technical support for the land-based casino’s customers, customer support, risk management, advertising and promotion, and support for the third-party vendor’s sports betting equipment. Revenue recognized relating to retail sports services provided to affiliated land-based casinos during the years ended December 31, 2020 and 2019 were not material to the consolidated financial statements. Any payables due to the affiliated land-based casinos are netted against Affiliate Receivables to the extent a right of offset exists and were not material to the consolidated financial statements for the years ended December 31, 2020 and 2019. |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended | 12 Months Ended |
Mar. 31, 2021 | Dec. 31, 2020 | |
Commitments and Contingencies | ||
Commitments and Contingencies | 13. Commitments and Contingencies Legal Matters The Company is not a party to any material legal proceedings and is not aware of any pending or threatened claims except as noted below. From time to time however, the Company may be subject to various legal proceedings and claims that arise in the ordinary course of its business activities. A complaint in a case styled Todd L. Anderson. vs. Rush Street Gaming, LLC and Rush Street Interactive, LLC , Case Number # 120CV04794 that was filed in the United States District Court for the Northern District of Illinois was served on the Company on August 18, 2020 and was amended on September 15, 2020. The amended complaint alleges that Todd Anderson was offered a 1% equity stake in the Company in 2012 that was never issued and asserts breach of contract, promissory estoppel and unjust enrichment claims to recover damages. The Company believes that the complaint is without merit and intends to defend against it but cannot predict the outcome of the potential impact of this lawsuit and the potential result is not able to be estimated and, therefore, the Company has not recorded a loss or related accrual on its condensed consolidated financial statements related to this matter. Other Contractual Obligations The Company is a party to several non-cancelable contracts with vendors and licensors for marketing and other strategic partnership related agreements where the Company is obligated to make future minimum payments under the non-cancelable terms of these contracts as follows ($ in thousands): From April 1, 2021 to December 31, 2021 $ 9,234 Year ending December 31, 2022 6,367 Year ending December 31, 2023 2,706 Year ending December 31, 2024 1,514 Year ending December 31, 2025 10,537 Thereafter 24,577 Total (1) $ 54,935 (1) Includes operating lease obligations under non-cancelable lease contracts totaling $1.3 million, obligations under non-cancelable contracts with marketing vendors totaling $17.3 million, license and market access commitments totaling $36.2 million and other non-cancelable costs totaling $0.1 million. | 16. Commitments and Contingencies Legal Matters The Company is not a party to any material legal proceedings and is not aware of any pending or threatened claims except as noted below. From time to time however, the Company may be subject to various legal proceedings and claims that arise in the ordinary course of its business activities. A complaint in a case styled Todd L. Anderson. vs. Rush Street Gaming, LLC and Rush Street Interactive, LLC , Case Number # 120CV04794 that was filed in the United States District Court for the Northern District of Illinois was served on the Company on August 18, 2020 and was amended on September 15, 2020. The amended complaint alleges that Todd Anderson was offered a 1% equity stake in the Company in 2012 that was never issued and asserts breach of contract, promissory estoppel and unjust enrichment claims to recover damages. The Company believes that the complaint is without merit and intends to defend against it but cannot predict the outcome of the potential impact of this lawsuit and the potential result is not able to be estimated and, therefore, the Company has not recorded a loss or related accrual on its consolidated financial statements related to this matter. Other Contractual Obligations The Company is a party to several non-cancelable contracts with vendors and licensors for marketing and other strategic partnership related agreements where the Company is obligated to make future minimum payments under the non-cancelable terms of these contracts as follows ($ in thousands): Year ending December 31, 2021 $ 14,598 Year ending December 31, 2022 6,065 Year ending December 31, 2023 2,684 Year ending December 31, 2024 1,513 Year ending December 31, 2025 10,537 Thereafter 24,577 Total $ 59,974 |
Subsequent Events
Subsequent Events | 3 Months Ended | 12 Months Ended |
Mar. 31, 2021 | Dec. 31, 2020 | |
Subsequent Events | ||
Subsequent Events | 14. Subsequent Events Other than the information described below, the Company did not identify any subsequent events that would require recognition in the condensed consolidated financial statements or disclosure in the notes to the condensed consolidated financial statements. On April 9, 2021, the Board approved equity grants to the Company’s officers and certain non-employee directors that had an aggregate fair value of approximately $5.1 million. The equity grants are subject to customary terms and vesting conditions. | 18. Subsequent Events On January 13, 2021, the Earnout Interests were fully earned and no longer subject to the applicable restrictions on transfer and voting because the Volume Weighted Average Share Price exceeded $14.00 per share for 10 trading days within a 20 consecutive trading day period following the Closing. As a result, the earnout interests liability was reclassed to equity resulting in 1,212,813 additional shares of Class A Common Stock held by the Founder Holders and 15,000,000 additional shares of Class V Common Stock and RSILP Units issued to the Sellers (i.e., non-controlling interests). The vesting of the Earnout Interests resulted in a fair value adjustment to other expense of $13.7 million. On February 22, 2021, the Company announced the redemption of all the Company’s Public Warrants, which were exercisable for an aggregate of approximately 11.5 million shares of Class A Common Stock at a price of $11.50 per share. During March 2021, 11,442,389 Public Warrants were exercised at a price of $11.50 per share, resulting in cash proceeds of approximately $131.6 million and the issuance of 11,442,389 shares of Class A Common Stock. None of the Public Warrants remain outstanding as of the date hereof. On March 26, 2021, the Private Warrants were exercised in full on a cashless basis, resulting in the issuance of 2,571,808 shares of Class A Common Stock. None of the Private Warrants remain outstanding as of the date hereof. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies and Recent Accounting Pronouncements (Policies) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2021 | Dec. 31, 2020 | |
Summary of Significant Accounting Policies and Recent Accounting Pronouncements | ||
Basis of Presentation and Principles of Consolidation | Basis of Presentation and Principles of Consolidation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) and the applicable regulations of the U.S. Securities and Exchange Commission (“SEC”) regarding interim financial reporting. Certain information and note disclosures normally included in annual financial statements prepared in accordance with U.S. GAAP have been condensed or omitted. Therefore, these unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and the related notes thereto as of and for the year ended December 31, 2020 included in the Company’s Annual Report on Form 10-K, as filed with the SEC on March 25, 2021 and as amended by Amendment No. 1 on Form 10-K/A and Amendment No. 2 on Form 10-K/A, as filed with the SEC on April 30, 2021 and May 7, 2021, respectively (collectively referred to herein as “Amended Annual Report”). These unaudited condensed consolidated financial statements include the accounts of the Company and its directly and indirectly wholly-owned subsidiaries. For consolidated entities that are less than wholly-owned, the third party’s holding of an equity interest is presented as Non-controlling interests in the Company’s condensed consolidated balance sheets and condensed consolidated statements of equity (deficit). The portion of net earnings attributable to the non-controlling interests is presented as Net loss attributable to non-controlling interests in the Company’s condensed consolidated statements of operations and comprehensive loss. All intercompany accounts and transactions have been eliminated upon consolidation. Pursuant to the Business Combination Agreement, the Business Combination was accounted for as a reverse recapitalization in accordance with U.S. GAAP (the “Reverse Recapitalization”). Under this method of accounting, dMY was treated as the acquired company and RSILP was treated as the acquirer for financial statement reporting purposes. Accordingly, for accounting purposes, the Reverse Recapitalization was treated as the equivalent of RSILP issuing stock for the net assets of dMY, accompanied by a recapitalization. RSILP was determined to be the accounting acquirer based on evaluation of the following facts and circumstances: · RSILP’s existing members, through their ownership of the Class V Common Stock, have the largest portion of the voting rights in the Company; · The Board of Directors of the Company and management are primarily composed of individuals associated with RSILP; and · RSILP is the larger entity based on historical operating activity and has the larger employee base. Thus, the financial statements included in this report reflect (i) the historical operating results of RSILP prior to the Reverse Recapitalization; (ii) the combined results of the RSILP and dMY following the Business Combination; and (iii) the acquired assets and liabilities of dMY stated at historical cost, with no goodwill or other intangible assets recorded. Certain prior period amounts have been reclassified to conform to the current period presentation. | Basis of Presentation and Principles of Consolidation The accompanying consolidated financial statements are presented in conformity with accounting principles generally accepted in the United States (“U.S. GAAP”) and pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”). The consolidated financial statements include the accounts and operations of the Company and its wholly-owned subsidiaries. For consolidated entities that are less than wholly-owned, the third party’s holding of an equity interest is presented as Non-controlling interests in the Company’s consolidated balance sheets and consolidated statements of equity (deficit). The portion of net earnings attributable to the non-controlling interests is presented as Net income (loss) attributable to non-controlling interests in the Company’s consolidated statements of operations and comprehensive income (loss). All intercompany accounts and transactions have been eliminated upon consolidation. Pursuant to the Business Combination Agreement, the Business Combination was accounted for as a reverse recapitalization in accordance with U.S. GAAP (the “Reverse Recapitalization”). Under this method of accounting, dMY is treated as the acquired company and RSILP is treated as the acquirer for financial statement reporting purposes. Accordingly, for accounting purposes, the Reverse Recapitalization was treated as the equivalent of RSILP issuing stock for the net assets of dMY, accompanied by a recapitalization. RSILP was determined to be the accounting acquirer based on evaluation of the following facts and circumstances: · RSILP’s existing member’s, through their ownership of the Class V Common Stock, have the largest portion of the voting rights in the Company; · The Board of Directors of the Company (the “Board”) and management are primarily composed of individuals associated with RSILP; and · RSILP is the larger entity based on historical operating activity and has the larger employee base. Thus, the financial statements included in this report reflect (i) the historical operating results of RSILP prior to the Reverse Recapitalization; (ii) the combined results of the RSILP and dMY following the Business Combination; and (iii) the acquired assets and liabilities of dMY stated at historical cost, with no goodwill or other intangible assets recorded. |
Reclassifications | Reclassifications Certain prior year amounts have been reclassified to conform to the current year presentation. | |
Liquidity and Capital Resources | Liquidity and Capital Resources Based on the net proceeds from the Business Combination (refer to Note 4) and the proceeds from warrant exercises resulting from the public warrant redemption (refer to Note 8) and future spend assumptions, the Company currently expects that its cash will be sufficient to fund its operating expenses and capital expenditure requirements for at least 12 months from the date of issuance of this report. The Company experienced positive operating cash flows of $16.2 million for the year ended December 31, 2020 and negative operating cash flows of $2.5 million for the year ended December 31, 2019. The Company has a working capital deficit as of December 31, 2020 totaling $106.5 million, mainly a result of the earnout interests liability, which was $351.0 million at December 31, 2020. The earnout interests liability pertains to certain shares and units held by directors of dMY and the Sellers that were subject to restrictions pending the achievement of certain earnout targets, which did not occur until January 2021 (refer to Notes 4 and 18). Although recorded as a current liability at December 31, 2020, the earnout interests liability was reclassed to equity upon occurrence of the triggering event in January 2021 and did not result in any cash settlement. That is, the earnout interest liability should not be included in any future cash flow assumptions as of December 31, 2020. Refer to Note 4 for additional discussion of the earnout interest liability. | |
Interim Unaudited Condensed Consolidated Financial Statements | Interim Unaudited Condensed Consolidated Financial Statements The accompanying condensed consolidated balance sheet as of March 31, 2021, and the condensed consolidated statements of operations and comprehensive loss, stockholders' equity (deficit), and cash flows for the three months ended March 31, 2021 and 2020, are unaudited. The condensed consolidated balance sheet as of December 31, 2020 was derived from audited financial statements, but does not include all disclosures required by U.S. GAAP. The interim unaudited condensed consolidated financial statements have been prepared on a basis consistent with the annual consolidated financial statements and, in the opinion of management, reflect all adjustments, which include only normal recurring adjustments, necessary to state fairly the Company's financial condition, its operations and cash flows for the periods presented. The historical results are not necessarily indicative of future results, and the results of operations for the three months ended March 31, 2021 are not necessarily indicative of the results to be expected for the full year or any other period. | |
Use of Estimates | Use of Estimates The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates. Significant estimates and assumptions reflected in the consolidated financial statements relate to and include, but are not limited to: the valuation of share-based awards; the estimated useful lives of property and equipment and intangible assets; redemption rate assumptions associated with the player loyalty program and other discretionary player bonuses; deferred revenue relating to our social gaming revenue stream; accrued expenses and other current liabilities; determination of the incremental borrowing rate to calculate operating lease liabilities; valuation of the earnout interests liability; valuation of the warrant liabilities; and deferred taxes and amounts associated with the Tax Receivable Agreement entered into in connection with the Business Combination (the “Tax Receivable Agreement”). | Use of Estimates The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates. Significant estimates and assumptions reflected in the consolidated financial statements relate to and include, but are not limited to, the valuation of share-based awards; the estimated useful lives of property and equipment and intangible assets; redemption rate assumptions associated with the loyalty program and other discretionary player bonuses; deferred revenue relating to our social gaming revenue stream; accrued expenses and other current liabilities; determination of the incremental borrowing rate to calculate operating lease liabilities; valuation of the earnout interests liability; valuation of the warrant liabilities; and deferred taxes and amounts associated with the Tax Receivable Agreement related to the Business Combination. |
Segment Reporting | Segment Reporting Operating segments are identified as components of an enterprise about which separate discrete financial information is available for evaluation by the chief operating decision maker in making decisions regarding resource allocation and assessing performance. The Company views its operations and manages its business in one operating segment. | |
Cash and Cash Equivalents and Restricted Cash | Cash and Cash Equivalents and Restricted Cash Cash and cash equivalents consist of highly liquid, unrestricted savings, checking and instant access internet banking accounts with original maturities of 90 days or less at acquisition. The Company maintains separate bank accounts to segregate cash that resides in players’ interactive gaming and sports betting accounts from cash used in operating activities. Due to certain regulatory requirements, cash amounts that reside in player’s interactive gaming and sports betting accounts at the end of the period are classified as restricted cash. The following table reconciles cash and cash equivalents and restricted cash in the balance sheet to the total shown on the statements of cash flows: December 31, 2020 2019 ($ in thousands) Cash and cash equivalents $ 255,622 $ 6,905 Restricted cash 6,443 3,638 Total cash, cash equivalents and restricted cash $ 262,065 $ 10,543 | |
Players Receivables | Players Receivables Players receivables consist of cash deposits from players that have not yet been received by the Company. Players receivables are stated at the amount that the Company expects to collect from players, generally via third-party payment processors. These receivables arise due to the timing difference between a player’s deposit and the Company’s receipt of that deposit from the payment processor. The amounts are generally outstanding for a short period of time. On a periodic basis, the Company evaluates its players receivable and establishes an allowance for doubtful accounts based on a specific review of the accounts as well as historical collection experience and current economic conditions. No allowance for doubtful accounts was recorded for the periods presented in these consolidated financial statements. | |
Due from Affiliates | Due from Affiliates Due from affiliates consists of amounts that are expected to be collected from certain affiliated land-based casino partners. In certain cases, the affiliate casino maintains the bank account that processes cash deposits and withdrawals for RSI customers. Accordingly, at any point in time, the Company will record a receivable from the affiliate, representing RSI total gaming revenue (with RSI customers) that was collected by the affiliate, less consideration payable to the affiliate for use of its license, which is offset by any consideration received from the affiliate based on the terms of the agreement. On a periodic basis, the Company evaluates the collectability of amounts due from affiliates and establishes an allowance for amounts not expected to be collected. No allowance was recorded for the periods presented in these consolidated financial statements. See Note 14 for disclosure on related parties. | |
Property and Equipment, net | Property and Equipment, net Property and equipment are carried at cost, net of accumulated depreciation. Depreciation is computed utilizing the straight-line method over the estimated useful life of the asset. Leasehold improvements depreciation is computed over the shorter of the lease term or estimated useful life of the asset. Additions and improvements are capitalized, while repairs and maintenance are expensed as incurred. Useful lives of each asset class are as follows: Computer equipment and software 3-5 years Furniture and fixtures 4 years Leasehold improvements Lesser of the lease terms or the estimated useful lives of the improvements, generally 1-10 years | |
License Fees, Net | License Fees, Net The Company incurs costs in connection with operating in certain regulated jurisdictions, including applying for licenses, compliance costs and the purchase of business licenses from strategic partners. The cost of purchasing business licenses, minimum royalty payments for strategic partners and subsequent renewals of business licenses are capitalized as an intangible asset and amortized over the estimated useful life of the asset using the straight-line method. RSI considers these minimum royalty payments to be an integral cost in connection with operating in certain jurisdictions. The minimum royalty payments are offset by the deferred royalty liability on the consolidated balance sheets. RSI’s access to operate in a particular market is often dependent upon the continued viability of that particular strategic partner in that market. The useful life is the period over which the asset is expected to contribute directly, or indirectly, to the Company’s cash flows. At least annually, the remaining useful life is evaluated. | |
Impairment of Long-Lived Assets | Impairment of Long-Lived Assets The Company’s long-lived assets consist of property and equipment, operating lease right-of-use assets and finite-lived intangible assets (i.e., license fees). The Company evaluates long-lived assets for indicators of impairment quarterly or when events or changes in circumstances indicate that their carrying amounts may not be recoverable. The factors that would be considered by management in performing this assessment include current operating results, trends and prospects, the manner in which the long-lived asset is used and the effects of obsolescence, demand, competition and other economic factors. If indicators of impairment are identified, the Company performs an undiscounted cash flow analysis of the long-lived assets. Asset groups are written down only to the extent that their carrying value is lower than their respective fair value. Fair values of the asset group are determined by discounting the cash flows at a rate that approximates the cost of capital of a market participant. The Company did not have any impairment of long-lived assets for the years ended December 31, 2020 and 2019. | |
Players Liabilities | Players Liabilities The Company records liabilities for player account balances, which consist of player deposits, plus player winning bets, less player losing bets, less player withdrawals. Player liabilities also includes the expected future payout relating to unredeemed bonus store points and unused discretionary bonus incentives in the player’s account. The Company’s restricted cash and players receivables balance will equal or exceed the cash portion of the Company’s player liabilities account. | |
Deferred Royalty | Deferred Royalty The Company records liabilities for minimum royalty payments related to licensing and market access agreements. These liabilities are recorded on the balance sheet at the present value of future payments discounted using a rate that reflects the duration of the agreement. The deferred royalty liability is accreted through interest expense in the Company’s consolidated statements of operations and comprehensive income (loss). The Company records deferred royalty liabilities as either deferred royalty, short-term or deferred royalty, long-term based on the timing of future payments. | |
Due to Affiliates | Due to Affiliates Due to affiliates consists of amounts owed by the Company to certain of its related parties. Amounts due to affiliates may include payment for services provided to the Company by employees of the related party or reimbursement of amounts paid by the related party on the Company’s behalf. Any royalties due to the affiliated land-based casinos are netted against Affiliate Receivables to the extent a right of offset exists. See Note 14 for disclosure on related parties. | |
Earnout Interests Liability | Earnout Interests Liability Earnout interests represent a freestanding financial instrument classified as liabilities on the accompanying consolidated balance sheet as the Company determined that these financial instruments are not indexed to the Company’s own equity in accordance with ASC 815, Derivatives and Hedging . Earnout interests were initially recorded as fair value in the Business Combination and are adjusted to fair value at each reporting date with changes in fair value recorded in Change in fair value of earnout interests liability in the consolidated statement of operations and comprehensive income (loss). | |
Warrant Liabilities | Warrant Liabilities As part of dMY’s initial public offering, dMY issued to third-party investors 23.0 million units, consisting of one share of Class A common stock of dMY and one-half of one warrant, at a price of $10.00 per unit. Each whole warrant entitled the holder to purchase one share of Class A common stock at an exercise price of $11.50 per share (the “Public Warrants”). Simultaneously with the dMY initial public offering, 6,600,000 private placement warrants were sold to the Sponsor (the “Private Placement Warrants”) and an additional 75,000 warrants were issued to the Sponsor upon the Closing in connection with converting certain working capital loans into warrants (the “Working Capital Warrants” and together with the Private Placement Warrants, the “Private Warrants” and the Private Warrants together with the Public Warrants, the “Warrants”)). Each Private Warrant allows the Sponsor to purchase one share of Class A Common Stock at $11.50 per share. Subsequent to the Business Combination, 11,500,000 Public Warrants and 6,675,000 Private Warrants remained outstanding as of December 31, 2020. The Private Warrants and the shares of Class A Common Stock issuable upon the exercise of the Private Warrants are not transferable, assignable or salable until after the completion of a Business Combination, subject to certain limited exceptions. Additionally, the Private Warrants are exercisable for cash or on a cashless basis, at the holder’s option, and are non-redeemable so long as they are held by the initial purchasers or their permitted transferees. If the Private Warrants are held by someone other than the initial purchasers or their permitted transferees, the Private Warrants will be redeemable by the Company and exercisable by such holders on the same basis as the Public Warrants. The Company evaluated the Warrants pursuant to ASC 815-40, and concluded that they do not meet the criteria to be classified in stockholders’ equity. Specifically, the exercise of these Warrants may be settled in cash upon the occurrence of a tender offer or exchange that involves 50% or more of our stockholders holding Class A Common Stock. Because not all of the stockholders need to participate in such tender offer or exchange to trigger the potential cash settlement and the Company does not control the occurrence of such an event, the Company concluded that the Warrants do not meet the conditions to be classified in equity. Because the Warrants meet the definition of a derivative under ASC 815-40, the Company records these Warrants as liabilities on its consolidated balance sheet at fair value as of each reporting date, with subsequent changes in their respective fair values recognized in its consolidated statement of operations and comprehensive income (loss). | |
Concentrations of Credit Risk | Concentrations of Credit Risk Financial instruments that potentially subject the Company to concentrations of credit risk consist primarily of operating cash and restricted cash. The Company maintains cash and restricted cash primarily across three financial institutions within separate bank accounts. Management believes the three financial institutions to be of a high credit quality, in amounts that exceed federally insured limits. The Company does not believe that it is subject to unusual credit risk beyond the normal credit risk associated with commercial banking relationships. | |
Leases | Leases In February 2016, the FASB issued ASU 2016‑02, Leases (Topic 842) ("ASU 2016-02"). The Company adopted the new standard on January 1, 2020 using the modified retrospective approach. Under this guidance, arrangements meeting the definition of a lease are classified as operating or financing leases and are recorded on the consolidated balance sheet as both a right-of-use asset and a lease liability. The Company determines whether an arrangement is or contains a lease at contract inception. The lease classification evaluation begins at the lease commencement date. The lease term used in the evaluation includes the non-cancellable period for which the Company has the right to use the underlying asset, together with renewal option periods when the exercise of the renewal option is reasonably certain. For leases with an initial term greater than 12 months, a related lease liability is recorded on the balance sheet at the present value of future payments discounted at the estimated fully collateralized incremental borrowing rate (discount rate) corresponding with the lease term. In addition, a right-of-use asset is recorded as the initial amount of the lease liability, plus any lease payments made to the lessor before or at the lease commencement date and any initial direct costs incurred, less any tenant improvement allowance incentives received. Tenant incentives are amortized through the right-of-use asset as a reduction of rent expense over the lease term. The difference between the minimum rents paid and the straight-line rent is reflected within the associated right-of-use asset. Certain leases contain provisions that require variable payments consisting of common area maintenance costs (variable lease cost). Variable lease costs are expensed as incurred. Leases with an initial term of 12 months or less (short-term leases) are not recorded on the balance sheet. Short-term lease expense is recognized on a straight-line basis over the lease term. As the interest rate implicit in the lease is not readily determinable, the Company uses its incremental borrowing rate corresponding with the lease term. As the Company does not have any outstanding debt, this rate is determined based on prevailing market conditions and comparable company and credit analysis. The incremental borrowing rate is reassessed if there is a change to the lease term or if a modification occurs and it is not accounted for as a separate contract. Prior to January 1, 2020, the Company accounted for leases under ASC 840, Leases (Topic 840) , and recorded rent expense associated with its operating lease on a straight-line basis over the term of the lease. | |
Revenue Recognition | Revenue Recognition Revenue is recognized when control of the promised goods or services is transferred to the customer, in an amount that reflects the consideration the Company expects to be entitled to in exchange for those goods or services. The Company determines revenue recognition through the following steps: · Identify the contract with the customer · Identify the performance obligations in the contract · Determine the transaction price · Allocate the transaction price to the performance obligations in the contract · Recognize revenue when, or as, the company satisfies a performance obligation The Company’s revenue from contracts with customers consists of online casino, online sports betting, retail sports betting and social gaming. Online casino and online sports betting Online casino offerings typically include the full suite of games available in land-based casinos, such as blackjack, roulette and slot machines. For these offerings, the Company generates revenue through hold, or gross winnings, as customers play against the house. Online casino revenue is generated based on total player bets less amounts paid to players for winning bets, less other incentives awarded to players, plus or minus the change in the progressive jackpot reserve. Online sports betting involves a user placing a bet on the outcome of a sporting event, or a series of sporting events, with the chance to win a pre-determined amount, often referred to as fixed odds. Online sports betting revenue is generated by setting odds such that there is a built-in theoretical margin in each sports bet offered to its customers. Online sports betting revenue is generated based on total player bets less amounts paid to players for winning bets, less other incentives awarded to players, plus or minus the change in unsettled bets. The Company provides various incentives to promote customer engagement, many of which allow customers to place bets without using their own funds. For some incentive programs, benefits are provided to customers based only on past play and represent an option that grants the player a material right. Other benefits that are provided to customers are more discretionary in nature and may not be related to the customer’s level of play. Performance obligations related to online gaming and sports betting transactions include (1) servicing the player’s bet, which is fulfilled when the outcome of the bet is known and (2) transferring additional goods or services to a player for which the Company has received consideration, such as bonus store points. Bonus store points as well as discretionary bonus incentives, such as bonus dollars and free bets (collectively referred to herein as “player bonuses”) are recognized as a reduction to revenue upon issuance of the incentive and as revenue upon redemption by the player. Reductions to revenue include estimates for the standalone selling price of player bonuses and the percentage of player bonuses that are expected to be redeemed. The expected redemption percentage is based on historical redemption patterns and considers current information or trends. The estimated redemption rate is evaluated each reporting period. The Company does not believe that there is a reasonable likelihood that there will be a material change in the future estimates or assumptions used to calculate the estimated redemption rate. Adjustments to earnings resulting from revisions to management’s estimates of the redemption rates have been insignificant during the years ended December 31, 2020 and December 31, 2019. An increase or decrease in the estimated redemption rate of 5% would not have a material effect on consolidated financial statements for the year ended December 31, 2020. Progressive jackpots related to online casino jackpot games are accrued and charged to revenue at the time the obligation to pay the jackpot is established. The progressive jackpot liability is recorded in Accrued expenses and other current liabilities on the consolidated balance sheets. Retail sports betting The Company provides retail sports services to land-based casinos in exchange for a monthly commission based on the land-based casino’s retail sportsbook revenue. Services include ongoing management and oversight of the retail sportsbook, technical support for the land-based casino’s customers, customer support, risk management, advertising and promotion, and support for the third-party vendor’s sports betting equipment. The Company has a single performance obligation to provide retail sports services and records the revenue as services are performed and when the commission amounts are no longer constrained (i.e., the amount is known). Certain relationships with business partners provide the Company the ability to operate the retail sportsbook at the land-based casino. In this scenario, revenue is generated based on total player bets less amounts paid to players for winning bets, less other incentives awarded to players. Social gaming The Company provides a social gaming platform for players to enjoy free-to-play games that use virtual credits. While virtual credits are issued to players for free, some players may choose to purchase additional virtual credits through the Company’s virtual cashier. The Company has a single performance obligation associated with social gaming services, to provide social gaming services to players upon the redemption of virtual credits. Deferred revenue is recorded when players purchase virtual coins and revenue is recognized when the virtual coins are redeemed, and the Company’s performance obligation has been fulfilled. Certain costs to obtain or fulfill contracts Pursuant to the accounting guidance, certain costs to obtain or fulfill a contract with a customer must be capitalized, to the extent recoverable from the associated contract margin, and subsequently amortized as the products or services are delivered to the customer. These costs are capitalized as contract acquisition costs and are amortized over the period of benefit to the customer. For the Company, the period of benefit has been determined to be less than or equal to one year. As such, the Company applied the practical expedient and contract acquisition costs are expensed immediately. Customer contract costs that do not qualify for capitalization as contract fulfillment costs are expensed as incurred. Contract balances Contract assets and liabilities represent the differences in the timing of revenue recognition from the receipt of cash from the Company’s customers and billings. The Company currently does not have contractual terms that require it to satisfy or partially satisfy its performance obligations in advance of customer billings. Deferred revenue represents wagered amounts that relate to unsettled or pending outcomes, such as a future sports bet. The Company recognizes revenue once the outcome of the bet is settled and fixed. Deferred revenue relating to the Company’s social gaming services includes virtual coins purchased by players but not yet used. Deferred revenue also includes contract liabilities for the Company’s obligation to transfer additional goods or services to a player for which the Company has received consideration, such as bonus store points. The Company recognizes breakage on bonus store points proportionately as redemption occurs. Revenue recognized relating to breakage during the years ended December 31, 2020 and 2019 were not material to the consolidated financial statements. Deferred revenue is recorded in Players liabilities on the consolidated balance sheets. Principle versus agent considerations The Company evaluates the criteria outlined in ASC 606-10-55, Principal versus Agent Considerations , in determining whether it is appropriate to record the gross amount of revenues and related costs, or the net amount earned as commissions. When the Company is the principal in a transaction and controls the specific good or service before it is transferred to the customer, revenue is recorded gross; otherwise, revenue is recorded on a net basis. The Company controls the promised goods or services for online casino and sports betting transactions, retail sports betting transactions and social gaming services, and as a result records related revenue on a gross basis. For retail sports services, the Company does not control the promised goods or services and, therefore, records the net amount of revenue earned as a commission. See Note 11 for a disaggregation of the Company’s revenues. | |
Costs of Revenue | Costs of Revenue Costs of revenue consist primarily of (i) revenue share and market access fees, (ii) platform and content fees, (iii) gaming taxes, (iv) payment processing fees and chargebacks and (v) salaries and benefits of dedicated personnel. These costs are variable in nature and should correlate with the change in revenue. | |
Advertising and Promotions Costs | Advertising and Promotions Costs Advertising and promotion costs consist primarily of marketing the Company’s products and services via different channels, promotional activities, and the related costs incurred to acquire new customers that include salaries and benefits for dedicated personnel and are expensed as incurred. | |
General Administration and Other | General Administration and Other General administration and other expenses consist primarily of administrative personnel costs, including salaries, bonuses and benefits, share-based compensation expenses, professional services related to legal, compliance and audit/consulting services, rent and other premises costs, and insurance. | |
Share-Based Compensation | Share-Based Compensation The Company records share-based compensation in accordance with ASC 718, Compensation — Stock Compensation (“ASC 718”) and recognizes share-based compensation expense in the period in which a grantee is required to provide service, which is generally over the vesting period of the individual share-based payment award. Compensation expense for awards with performance conditions is not recognized until it is probable that the performance target will be achieved. Compensation expense for awards is recognized over the requisite service period on a straight-line basis. The Company accounts for forfeitures as they occur. The Company classifies unit awards as either an equity award or a liability award depending on whether the award contains certain repurchase provisions. Equity-classified awards are valued as of the grant date based upon the price of the underlying unit or share and a number of assumptions, including volatility, performance period, risk-free interest rate and expected dividends. Liability-classified awards are valued at fair value at each reporting date. See Note 10. Share-based payment awards which contain certain repurchase provisions were classified as liabilities in accordance with ASC 718. The Company elected to measure all liability-classified awards utilizing an option pricing method and recognizes the related expense within General administration and other expenses in the consolidated statements of operations and comprehensive income (loss). | |
Income Taxes | Income Taxes RSI Inc. is a corporation and, as a result, is subject to United States federal, state, and foreign income taxes. RSILP is treated as a partnership for United States federal income tax purposes and therefore does not pay United States federal income tax on its taxable income. Instead, the RSILP unitholders, including the Company, are liable for United States federal income tax on their respective shares of RSILP's taxable income reported on the unitholders' United States federal income tax returns. RSILP is liable for income taxes in those states not recognizing its status as a partnership for United States federal income tax purposes. The Company accounts for income taxes using the asset and liability method. Under this method, deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are calculated by applying existing tax laws and the rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in the year of the enacted rate change. The Company recognizes deferred tax assets to the extent the Company believes these assets are more-likely-than-not to be realized. In making such a determination, the Company considers all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax planning strategies and recent results of operations. The Company accounts for uncertainty in income taxes using a recognition and measurement threshold for tax positions taken or expected to be taken in a tax return, which are subject to examination by federal and state taxing authorities. The tax benefit from an uncertain tax position is recognized when it is more-likely-than-not that the position will be sustained upon examination by taxing authorities based on technical merits of the position. The amount of the tax benefit recognized is the largest amount of the benefit that has a greater than 50% likelihood of being realized upon ultimate settlement. The effective tax rate and the tax basis of assets and liabilities reflect management’s estimates of the ultimate outcome of various tax uncertainties. The Company recognizes penalties and interest related to uncertain tax positions within the provision (benefit) for income taxes line in the accompanying consolidated statements of operations. See Note 12, “Income Taxes” for additional information regarding income taxes. | |
Tax receivable agreement | Tax receivable agreement In connection with the Business Combination, the Special Limited Partner entered into the Tax Receivable Agreement, which generally provides for the payment by it of 85% of certain net tax benefits, if any, that the Company (including the Special Limited Partner) realize (or in certain cases is deemed to realize) as a result of these increases in tax basis and tax benefits related to the transactions contemplated under the Business Combination Agreement and the exchange of Retained RSILP Units for Class A Common Stock (or cash at the Company's option) pursuant to the RSILP A&R LPA and tax benefits related to entering into the Tax Receivable Agreement, including tax benefits attributable to payments under the Tax Receivable Agreement. These payments are the obligation of the Special Limited Partner and not of RSILP. The actual increase in the Special Limited Partner's allocable share of RSILP's tax basis in its assets, as well as the amount and timing of any payments under the Tax Receivable Agreement, will vary depending upon a number of factors, including the timing of exchanges, the market price of our Class A Common Stock at the time of the exchange and the amount and timing of the recognition of our and our consolidated subsidiaries' (including the Special Limited Partner's) income. While many of the factors that will determine the amount of payments that the Special Limited Partner will make under the Tax Receivable Agreement are outside of the Company's control, the Company expects that the payments the Special Limited Partner will make under the Tax Receivable Agreement will be substantial and could have a material adverse effect on the financial condition of the Company. The Company evaluates the realizability of the deferred tax assets resulting from the exchange of RSILP Units for Class A Common Stock. If the deferred tax assets are determined to be realizable, the Company then assesses whether payment of amounts under the TRA have become probable. If so, the Company records a TRA liability equal to 85% of such deferred tax assets. In subsequent periods, the Company assesses the realizability of all of our deferred tax assets subject to the TRA. Should it be determined that a deferred tax asset with a valuation allowance is realizable in a subsequent period, the related valuation allowance will be released and consideration of a corresponding TRA liability will be assessed. The realizability of deferred tax assets, including those subject to the TRA, is dependent upon the generation of future taxable income during the periods in which those deferred tax assets become deductible and consideration of prudent and feasible tax-planning strategies. The measurement of the TRA liability is accounted for as a contingent liability. Therefore, once the Company determines that a payment becomes probable and can be estimated, the estimate of the payment will be accrued. | |
Earnings Per Share | Earnings Per Share Basic net earnings per share is computed by dividing net earnings attributable to Rush Street Interactive, Inc. for the period following the Business Combination by the weighted-average number of shares of Class A Common Stock outstanding during the same period. Diluted net earnings per share is computed giving effect to all potential weighted-average dilutive shares for the period. The dilutive effect of outstanding awards or financial instruments, if any, is reflected in diluted earnings per share by application of the treasury stock method or if-converted method, as applicable. Prior to the Business Combination, the membership structure of RSILP included units which had profit interests. The Company analyzed the calculation of earnings per unit for periods prior to the Business Combination and determined that it resulted in values that would not be meaningful to the users of these audited consolidated financial statements. Therefore, earnings per share information has not been presented for periods prior to the Business Combination on December 29, 2020. The basic and diluted earnings per share for the year ended December 31, 2020 represent only the period of December 29, 2020 to December 31, 2020. | |
Foreign Currency | Foreign Currency The Company’s reporting currency is the U.S. dollar while the functional currency of non-U.S. subsidiaries is the Colombian peso. The financial statements of non-U.S. subsidiaries are translated into United States dollars in accordance with ASC 830, Foreign Currency Matters , using period-end rates of exchange for assets and liabilities, and average rates of exchange for the period for revenues, costs, and expenses and historical rates for equity. Translation adjustments resulting from the process of translating the local currency financial statements into U.S. dollars are included in determining other comprehensive income (loss). | |
Fair Value Measurements | Fair Value Measurements Fair value measurements are based on the premise that fair value is an exit price representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability. As a basis for considering such assumptions, the following three-tier fair value hierarchy has been used in determining the inputs used in measuring fair value: · Level 1 – Quoted prices in active markets for identical assets or liabilities on the reporting date. · Level 2 – Pricing inputs are based on quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active and model-based valuation techniques for which all significant assumptions are observable in the market or can be corroborated by observable market data for substantially the full term of the assets or liabilities. · Level 3 – Pricing inputs are generally unobservable and include situations where there is little, if any, market activity for the investment. The inputs into the determination of fair value require management’s judgment or estimation of assumptions that market participants would use in pricing the assets or liabilities. The fair values are therefore determined using factors that involve considerable judgment and interpretations, including but not limited to private and public comparables, third-party appraisals, discounted cash flow models, and fund manager estimates. Financial instruments measured at fair value are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. Management’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the asset or liability. The use of different assumptions and/or estimation methodologies may have a material effect on estimated fair values. Accordingly, the fair value estimates disclosed or initial amounts recorded may not be indicative of the amount that the Company or holders of the instruments could realize in a current market exchange. See Note 17 for additional information related to fair value measurement. | |
Significant Accounting Policies | Significant Accounting Policies The following accounting policy is incremental to the Company’s significant accounting policies as described in Note 2, “Summary of Significant Accounting Policies,” of its audited consolidated financial statements and related notes included in the Amended Annual Report. | |
Internally Developed Software | Internally Developed Software Software that is developed for internal use is accounted for pursuant to Accounting Standards Codification (“ASC”) 350-40, Intangibles, Goodwill and Other — Internal-Use Software . Qualifying costs incurred to develop internal-use software are capitalized when (i) the preliminary project stage is completed, (ii) management has authorized further funding for the completion of the project and (iii) it is probable that the project will be completed and perform as intended. These capitalized costs include compensation for employees who develop internal-use software and external costs related to development of internal-use software. Capitalization of these costs ceases once the project is substantially complete and the software is ready for its intended purpose. Internally developed software is amortized using the straight-line method over an estimated useful life of three to four years. All other expenditures, including those incurred to maintain an intangible asset’s current level of performance, are expensed as incurred. | |
Recently Adopted Accounting Pronouncements | Recently Adopted Accounting Pronouncements In December 2019, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes (“ASU 2019-12”), which is intended to simplify various aspects related to accounting for income taxes. ASU 2019-12 removes certain exceptions to the general principles in ASC 740 and clarifies and amends existing guidance to improve consistent application. This guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020, with early adoption permitted. The Company adopted ASU 2019-12 on January 1, 2021, and the adoption had no impact on its condensed consolidated financial statements. | Recently Adopted Accounting Pronouncements In February 2016, the FASB issued ASU 2016‑02. The guidance in ASU 2016-02 and subsequently issued amendments requires lessees to capitalize virtually all leases with terms of more than twelve months on the balance sheet as a right-of-use asset and recognize an associated lease liability. The right-of-use asset represents the lessee’s right to use, or control the use of, a specified asset for the specified lease term. The lease liability represents the lessee’s obligation to make lease payments arising from the lease, measured on a discounted basis. Based on certain characteristics, leases are classified as financing or operating leases and their classification affects the recognition of expense in the income statement. The Company adopted the new standard on January 1, 2020 using the modified retrospective approach by recognizing and measuring leases without revising comparative period information or disclosures. The Company elected the transition package of three practical expedients permitted within the standard. In addition, the Company elected to apply the practical expedient that allows for the combination of lease and non-lease components for all asset classes. The Company made an accounting policy election to keep leases with terms of twelve months or less off the balance sheet and recognize those lease payments on a straight-line basis over the lease term. The adoption of ASU 2016-02 resulted in the recognition of operating lease assets and liabilities of $0.2 million and $0.2 million, respectively, with no effect on opening accumulated deficit. The adoption of ASU 2016-02 did not materially affect the Company’s consolidated results of operations and had no impact on cash flows. In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820), - Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement , which makes a number of changes meant to add, modify or remove certain disclosure requirements associated with the movement amongst or hierarchy associated with Level 1, Level 2 and Level 3 fair value measurements. On January 1, 2020, the Company adopted this guidance, which did not have a material impact on the Company’s consolidated financial statements. |
Recent Accounting Pronouncements Not Yet Adopted | Recent Accounting Pronouncements Not Yet Adopted In June 2016, the FASB issued ASU 2016-13, Financial Instruments – Credit Losses (Topic 326) . Together with subsequent amendments, this ASU sets forth a “current expected credit loss” model, which requires the Company to measure all expected credit losses for financial instruments held at the reporting date based on historical experience, current conditions and reasonable supportable forecasts. This ASU replaces the existing incurred loss model and is applicable to the measurement of credit losses on financial assets measured at amortized cost, available-for-sale debt securities and applies to certain off-balance sheet credit exposures. This ASU is effective for the Company in calendar year 2023. The Company is currently assessing the impact of the adoption of this ASU on its condensed consolidated financial statements. | Recent Accounting Pronouncements Not Yet Adopted In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments – Credit Losses (Topic 326) . Together with subsequent amendments, the ASU sets forth a “current expected credit loss” model which requires the Company to measure all expected credit losses for financial instruments held at the reporting date based on historical experience, current conditions and reasonable supportable forecasts. This ASU replaces the existing incurred loss model and is applicable to the measurement of credit losses on financial assets measured at amortized cost, available-for-sale debt securities and applies to certain off-balance sheet credit exposures. This ASU is effective for the Company in calendar year 2023. The Company is currently assessing the impact of the adoption of this ASU on its consolidated financial statements. In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes (“ASU 2019-12”), which is intended to simplify various aspects related to accounting for income taxes. ASU 2019-12 removes certain exceptions to the general principles in ASC 740 and also clarifies and amends existing guidance to improve consistent application. This guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020, with early adoption permitted. The Company is currently evaluating the impact of this standard on its consolidated financial statements. In August 2020, the FASB issued ASU 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity , which simplifies accounting for convertible instruments by removing major separation models required under current GAAP. This ASU removes certain settlement conditions that are required for equity contracts to qualify for the derivative scope exception and it also simplifies the diluted earnings per share calculation in certain areas. This ASU is effective for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years. Early adoption is permitted, but no earlier than fiscal years beginning after December 15, 2021 and adoption must be as of the beginning of the Company’s annual fiscal year. The Company is currently evaluating the impact of this standard on its consolidated financial statements and related disclosures. |
Revenue Recognition (Table)
Revenue Recognition (Table) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2021 | Dec. 31, 2020 | |
Revenue Recognition | ||
Summary of disaggregation of revenue | Disaggregation of revenue for the three months ended March 31, 2021 and 2020, is as follows: Three months ended March 31, ($in thousands) 2021 2020 Online casino and online sports betting $ 109,978 $ 34,480 Retail sports betting 627 213 Social gaming 1,215 484 Total revenue $ 111,820 $ 35,177 | Years Ended December 31, ($ in thousands) 2020 2019 Online casino and online sports betting $ 273,761 $ 61,268 Retail sports betting 1,205 1,053 Social gaming 3,534 1,346 Total revenue $ 278,500 $ 63,667 |
Summary of revenue by geographic region | Revenue by geographic region for the three months ended March 31, 2021 and 2020, is as follows: Three months ended March 31, ($in thousands) 2021 2020 United States $ 105,303 $ 32,883 Colombia 6,517 2,294 Total revenue $ 111,820 $ 35,177 | Years Ended December 31, ($ in thousands) 2020 2019 United States $ 263,214 $ 59,572 Colombia 15,286 4,095 Total revenue $ 278,500 $ 63,667 |
Summary of deferred revenue balances | Three months ended March 31, ($in thousands) 2021 2020 Deferred revenue, beginning of period $ 1,797 $ 321 Deferred revenue, end of period 2,163 95 Revenue recognized in the period from amounts included in deferred revenue at the beginning of the period 608 321 | Years Ended December 31, ($ in thousands) 2020 2019 Deferred revenue, beginning of period $ 321 $ 129 Deferred revenue, end of period 1,797 321 Revenue recognized in the period from amounts included in deferred revenue at the beginning of the period 321 129 |
Intangible Assets, Net (Tables)
Intangible Assets, Net (Tables) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2021 | Dec. 31, 2020 | |
Intangible Assets, Net | ||
Summary of intangible assets, net | The Company has the following intangible assets, net as of March 31, 2021 and December 31, 2020: Weighted Average Remaining Gross Amortization Carrying Accumulated ($in thousands) Period Amount Amortization Net License Fees March 31, 2021 7.86 years $ 14,675 $ (3,955) $ 10,720 December 31, 2020 8.03 years $ 13,225 $ (3,475) $ 9,750 Internally Developed Software March 31, 2021 2.95 years $ 909 $ (17) $ 892 December 31, 2020 — — — — | The table below provides a summary of the license fees as of December 31, 2020 and 2019, respectively: Weighted Average Remaining Gross Amortization Period Carrying Accumulated ($ in thousands) (years) Amount Amortization Net December 31, 2020 8.03 $ 13,225 $ (3,475) $ 9,750 December 31, 2019 8.82 $ 8,854 $ (1,897) $ 6,957 |
Accrued Expenses and Other Cu_2
Accrued Expenses and Other Current Liabilities (Tables) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2021 | Dec. 31, 2020 | |
Accrued Expenses and Other Current Liabilities | ||
Schedule of Accrued Expenses and Other Current Liabilities | March 31, December 31, ($in thousands) 2021 2020 Accrued compensation and related expenses $ 2,735 $ 1,948 Accrued operating expenses 9,508 7,006 Accrued marketing expenses 19,942 12,093 Jackpot liability 1,052 721 Income tax payable 2,674 1,983 Other 1,930 2,244 Total accrued expenses and other current liabilities $ 37,841 $ 25,995 | December 31, 2020 2019 ($ in thousands) Accrued compensation and related expenses $ 2,821 $ 530 Accrued operating expenses 7,006 3,422 Accrued marketing expenses 12,093 5,396 Income tax payable 1,983 13 Other 2,092 309 Total accrued expenses and other current liabilities $ 25,995 $ 9,670 |
Warrant Liabilities (Tables)
Warrant Liabilities (Tables) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2021 | Dec. 31, 2020 | |
Warrant Liabilities | ||
Schedule of range and weighted-average of the significant unobservable inputs used to fair value Level 3 recurring liabilities along with the valuation techniques used | March 26, 2021 December 31, 2020 Exercise price $ 11.50 $ 11.50 Stock price $ 15.96 $ 22.76 Volatility 42.6 % 41.4 % Term (years) 4.77 5.0 Risk-free interest rate 0.76 % 0.37 % | Observable (O) or Fair Value Valuation Unobservable (U) Range (in thousands) Technique Input (Weighted-Average) Earnout interests liability $ 351,048 Option pricing model Share price (O) $21.51 - $21.65 Volatility (U) 54.6% Term (U) 2.99 years Risk-free rate (O) 0.17% |
Share-Based Compensation (Table
Share-Based Compensation (Tables) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2021 | Dec. 31, 2020 | |
Share-Based Compensation | ||
Schedule of unit's activity | Number of Units Unvested balance at December 31, 2018 — Granted 4,475,029 Vested (3,952,943) Unvested balance at December 31, 2019 522,086 Granted 683,889 Vested (1,205,975) Unvested balance at December 31, 2020 — | |
Schedule of unit activity | Restricted stock unit (“RSU”) activity for the three months ended March 31, 2021 is as follows: Weighted average Number of units grant price Unvested balance at December 31, 2020 — $ — Granted 3,647,504 15.85 Vested (719,479) 15.85 Unvested balance at March 31, 2021 2,928,025 $ 15.85 | |
Summary of share-based compensation expense | Share-based compensation expense for the three months ended March 31, 2021 and 2020 is as follows: Three months ended March 31, ($in thousands) 2021 2020 Costs of revenue $ 915 $ — Advertising and promotions 1,698 — General administration and other 8,963 13,490 Total share-based compensation expense $ 11,576 $ 13,490 | |
Schedule of assumptions used for determination of fair value of unit | The fair value for both the Common A‑2 Units and the Common B‑1 Units was determined using the Black-Scholes-Merton pricing model with the following assumptions: December 29, December 31, 2020 2019 Dividend yield — — Volatility factor 45 % 45 % Risk-free interest rate 0.12 % 1.69 % Time to liquidity (in years) — 5.0 Lack of marketability discount % 33.0 % |
Income Taxes (Tables)
Income Taxes (Tables) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2021 | Dec. 31, 2020 | |
Income Taxes | ||
Summary of components of the income tax provision | Income Tax Provision for the three months ended March 31, 2021 and 2020 is as follows: Three months ended March 31, ($in thousands) 2021 2020 Income tax provision $ 804 $ — | Year Ended December 31, 2020 2019 Current income taxes: Federal $ — $ — State and local — — Foreign 2,708 — 2,708 — Deferred income taxes: Federal — — State and local — — Foreign 211 — 211 — Income tax (benefit) expense $ 2,919 $ — |
Summary of reconciliations of income tax expense computed at the U.S. federal statutory income tax rate to the recognized income tax expense and the U.S. statutory income tax rate to our effective tax rates | Year Ended December 31, 2020 2019 (Restated) Net loss before income taxes $ (128,726) $ (22,450) Less: net loss before Reverse Recapitalization (133,404) (22,450) Less: net income before income taxes attributable to non-controlling interest 3,597 — Net income attributable to Rush Street Interactive Inc. before income taxes 1,081 — Income tax expense (benefit) at the federal statutory rate 227 — State income taxes, net of federal benefit 100 — Foreign operations 2,919 — Change in valuation allowance (327) — Income tax (benefit) expense $ 2,919 $ — | |
Summary of significant components of the deferred tax assets and liabilities | Year Ended December 31, 2020 2019 Deferred tax assets: (Restated) Investment in subsidiaries $ 127,171 $ — Net operating losses 136 — Imputed interest 1,202 — Other assets 39 — Total gross deferred tax assets 128,548 — Valuation allowance (128,511) — Total deferred tax assets, net of valuation allowance 37 — Deferred tax liabilities: Investment in subsidiaries — — Total gross deferred tax liabilities — — Net deferred tax assets $ 37 $ — |
Loss Per Share (Tables)
Loss Per Share (Tables) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2021 | Dec. 31, 2020 | |
Loss Per Share | ||
Summary of basic and diluted loss per share | The basic and diluted loss per share for the three months ended March 31, 2021 are as follows (amounts in thousands, except for share and per share amounts): Numerator: Net loss $ (76) Less: Net loss attributable to noncontrolling interests (59) Net loss attributable to Rush Street Interactive, Inc. – basic $ (17) Effect of dilutive securities: Warrants, net of amounts attributable to noncontrolling interests (9,569) Net loss attributable to Rush Street Interactive, Inc. – diluted $ (9,586) Denominator: Weighted average common shares outstanding – basic 46,955,262 Weighted average effect of dilutive securities: Public Warrants (1) 3,770,106 Private Placement and Working Capital Warrants (1) 2,690,120 Weighted average common shares outstanding – diluted 53,415,488 Net loss per Class A common share – basic $ (0.00) Net loss per Class A common share – diluted $ (0.18) (1) Calculated using the treasury stock method. | The computation of net earnings per share attributable to RSI and weighted-average shares of the Company’s Class A Common Stock outstanding for the year ended December 31, 2020 are as follows (amounts in thousands, except for share and per share amounts): Numerator: Net loss $ (131,645) Less: Net loss attributable to RSILP prior to the Business Combination (136,323) Less: Net income attributable to noncontrolling interests after the Business Combination 3,597 Net income attributable to Rush Street Interactive, Inc. – basic $ 1,081 Effect of dilutive securities: Public, Private Placement and Working Capital Warrants, net of amounts attributable to noncontrolling interests (1,656) Net loss attributable to Rush Street Interactive, Inc. – diluted $ (575) Denominator: Weighted average common shares outstanding – basic 43,579,704 Weighted average effect of dilutive securities: Public Warrants (1) Private Placement and Working Capital Warrants (1) Weighted average common shares outstanding - diluted Net income per Class A common share – basic $ Net loss per Class A common share – diluted $ (0.01) (1) Calculated using the treasury stock method. |
Summary of securities excluded from computation of diluted shares outstanding, as their effect would have been anti-dilutive | The Company excluded the following securities from its computation of diluted shares outstanding, as their effect would have been anti-dilutive: RSILP Units (1) 160,000,000 Unvested Restricted Stock Units 2,928,025 (1) These RSILP Units are held by the Sellers pursuant to the Business Combination, and may be exchanged, subject to certain restrictions, for Class A Common Stock. Upon exchange of an RSILP Unit, a share of Class V Common Stock is cancelled. | The Company excluded the following securities from its computation of diluted shares outstanding, as their effect would have been anti-dilutive: RSILP Units (1) 160,000,000 Earnout Interests – Class A Common Stock (2) 1,212,813 (1) These RSILP Units are held by the Sellers, pursuant to the Business Combination, and may be exchanged, subject to certain restrictions, for Class A Common Stock. Upon exchange of an RSILP Unit, a share of Class V Common Stock is cancelled. These amounts include 15,000,000 RSILP Units issued to the Sellers in the Business Combination that remain subject to certain restrictions pending the achievement (if any) of certain earnout targets. (2) These Earnout Interests represent the Class A common shares held by the Founder Holders pursuant to the Business Combination. |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2021 | Dec. 31, 2020 | |
Commitments and Contingencies | ||
Schedule of future minimum payments under the non-cancelable terms of contracts | The Company is a party to several non-cancelable contracts with vendors and licensors for marketing and other strategic partnership related agreements where the Company is obligated to make future minimum payments under the non-cancelable terms of these contracts as follows ($ in thousands): From April 1, 2021 to December 31, 2021 $ 9,234 Year ending December 31, 2022 6,367 Year ending December 31, 2023 2,706 Year ending December 31, 2024 1,514 Year ending December 31, 2025 10,537 Thereafter 24,577 Total (1) $ 54,935 (1) Includes operating lease obligations under non-cancelable lease contracts totaling $1.3 million, obligations under non-cancelable contracts with marketing vendors totaling $17.3 million, license and market access commitments totaling $36.2 million and other non-cancelable costs totaling $0.1 million. | The Company is a party to several non-cancelable contracts with vendors and licensors for marketing and other strategic partnership related agreements where the Company is obligated to make future minimum payments under the non-cancelable terms of these contracts as follows ($ in thousands): Year ending December 31, 2021 $ 14,598 Year ending December 31, 2022 6,065 Year ending December 31, 2023 2,684 Year ending December 31, 2024 1,513 Year ending December 31, 2025 10,537 Thereafter 24,577 Total $ 59,974 |
Description of Business (Detail
Description of Business (Details) - $ / shares | Mar. 31, 2021 | Dec. 31, 2020 | Dec. 29, 2020 | Dec. 31, 2019 |
Sellers | ||||
Description of Business | ||||
Percentage of interest holding | 73.00% | |||
Class V common stock | ||||
Description of Business | ||||
Common stock, par value | $ 0.0001 | $ 0.0001 | $ 0.0001 | |
RSILP | ||||
Description of Business | ||||
Percentage of common units acquired | 23.10% | 23.10% | ||
RSILP | Class V common stock | ||||
Description of Business | ||||
Common stock, par value | $ 0.0001 | |||
RSILP | ||||
Description of Business | ||||
Percentage of common units retained by sellers | 73.00% | |||
Percentage of interest holding | 27.00% | |||
RSILP | Sellers | ||||
Description of Business | ||||
Percentage of common units retained by sellers | 76.90% | 76.90% |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies - Property and Equipment, net (Details) | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Property and equipment, net | |||
Useful life of the asset | 8 years 11 days | 8 years 9 months 26 days | |
Software | Maximum | |||
Property and equipment, net | |||
Useful life of the asset | P5Y | ||
Useful life of the asset | 4 years | ||
Software | Minimum | |||
Property and equipment, net | |||
Useful life of the asset | P3Y | ||
Useful life of the asset | 3 years | ||
Furniture and fixtures | |||
Property and equipment, net | |||
Useful life of the asset | P4Y | ||
Leasehold improvements | |||
Property and equipment, net | |||
Useful life of the asset | P4Y | ||
Leasehold improvements | Maximum | |||
Property and equipment, net | |||
Useful life of the asset | P10Y | ||
Leasehold improvements | Minimum | |||
Property and equipment, net | |||
Useful life of the asset | P1Y |
Revenue Recognition - Disaggreg
Revenue Recognition - Disaggregation of revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2021 | Mar. 31, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | |
Disaggregation of Revenue [Line Items] | ||||
Total revenue | $ 111,820 | $ 35,177 | $ 278,500 | $ 63,667 |
Online casino and online sports betting | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 109,978 | 34,480 | 273,761 | 61,268 |
Retail sports betting | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 627 | 213 | 1,205 | 1,053 |
Social gaming services | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | $ 1,215 | $ 484 | $ 3,534 | $ 1,346 |
Revenue Recognition - Geographi
Revenue Recognition - Geographic region (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2021 | Mar. 31, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | |
Disaggregation of Revenue [Line Items] | ||||
Total revenue | $ 111,820 | $ 35,177 | $ 278,500 | $ 63,667 |
United States | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 105,303 | 32,883 | 263,214 | 59,572 |
Colombia | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | $ 6,517 | $ 2,294 | $ 15,286 | $ 4,095 |
Revenue Recognition - Deferred
Revenue Recognition - Deferred revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2021 | Mar. 31, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | |
Revenue Recognition | ||||
Deferred revenue, beginning of period | $ 1,797 | $ 321 | $ 321 | $ 129 |
Deferred revenue, end of period | 2,163 | 95 | 1,797 | 321 |
Revenue recognized in the period from amounts included in deferred revenue at the beginning of the period | $ 608 | $ 321 | $ 321 | $ 129 |
Intangible Assets, Net (Details
Intangible Assets, Net (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Finite-Lived Intangible Assets [Line Items] | |||
Accumulated Amortization | $ 3,475 | $ 1,897 | |
Net | $ 9,750 | $ 6,957 | |
License Fees | |||
Finite-Lived Intangible Assets [Line Items] | |||
Weighted Average Remaining Amortization Period | 7 years 10 months 10 days | 8 years 11 days | |
Gross Carrying Amount | $ 14,675 | $ 13,225 | |
Accumulated Amortization | (3,955) | (3,475) | |
Net | $ 10,720 | $ 9,750 | |
Internally Developed Software | |||
Finite-Lived Intangible Assets [Line Items] | |||
Weighted Average Remaining Amortization Period | 2 years 11 months 12 days | 0 years | |
Gross Carrying Amount | $ 909 | $ 0 | |
Accumulated Amortization | (17) | 0 | |
Net | $ 892 | $ 0 |
Intangible Assets, Net - Additi
Intangible Assets, Net - Additional Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2021 | Mar. 31, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | |
Intangible Assets, Net | ||||
Amortization expense | $ 500 | $ 400 | $ 1,592 | $ 1,039 |
Accrued Expenses and Other Cu_3
Accrued Expenses and Other Current Liabilities (Details) - USD ($) $ in Thousands | Mar. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Accrued Expenses and Other Current Liabilities | |||
Accrued compensation and related expenses | $ 2,735 | $ 1,948 | |
Accrued operating expenses | 9,508 | 7,006 | $ 3,422 |
Accrued marketing expenses | 19,942 | 12,093 | 5,396 |
Jackpot liability | 1,052 | 721 | |
Income tax payable | 2,674 | 1,983 | 13 |
Other | 1,930 | 2,244 | |
Total accrued expenses and other current liabilities | $ 37,841 | $ 25,995 | $ 9,670 |
Warrant Liabilities (Details)
Warrant Liabilities (Details) - USD ($) $ / shares in Units, $ in Millions | 1 Months Ended | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2021 | Mar. 31, 2021 | Dec. 31, 2020 | Mar. 26, 2021 | Feb. 22, 2021 | |
Debt and Equity Securities, FV-NI [Line Items] | |||||
Number of shares called by warrants | 11,442,389 | 11,442,389 | |||
Public Warrants | |||||
Debt and Equity Securities, FV-NI [Line Items] | |||||
Number of shares issuable per warrant | 11,442,389 | 11,442,389 | |||
Warrants exercise price | $ 11.50 | $ 11.50 | $ 11.50 | ||
Total potential cash proceeds | $ 131.6 | ||||
Cash not received from proceeds of warrants | $ 0.1 | ||||
Warrants outstanding | 0 | 0 | 18,175,000 | ||
Number of shares called by warrants | 11,500,000 | ||||
Fair value | $ 77.5 | $ 77.5 | $ 88.1 | ||
Public Warrants | dMY | |||||
Debt and Equity Securities, FV-NI [Line Items] | |||||
Number of shares issuable per warrant | 1 | ||||
Warrants exercise price | $ 11.50 | $ 11.50 | $ 11.50 | ||
Warrants outstanding | 11,500,000 | ||||
Private Placement Warrants | |||||
Debt and Equity Securities, FV-NI [Line Items] | |||||
Number of shares issuable per warrant | 6,600,000 | 2,571,808 | |||
Warrants outstanding | 0 | 0 | |||
Private Placement Warrants | dMY | |||||
Debt and Equity Securities, FV-NI [Line Items] | |||||
Number of shares in a unit | 1 | ||||
Price per unit | $ 11.50 | ||||
Number of warrants sold | 6,600,000 | 6,600,000 | |||
Warrants outstanding | 6,675,000 | ||||
Working Capital Warrants | dMY | |||||
Debt and Equity Securities, FV-NI [Line Items] | |||||
Number of warrants sold | 75,000 | 75,000 | |||
IPO | |||||
Debt and Equity Securities, FV-NI [Line Items] | |||||
Number of units issued | 23,000,000 | ||||
Number of shares in a unit | 1 | ||||
Number of warrants in a unit | 1 | ||||
Price per unit | $ 10 | ||||
IPO | dMY | |||||
Debt and Equity Securities, FV-NI [Line Items] | |||||
Number of units issued | 23,000,000 | 23,000,000 | |||
Number of shares in a unit | 1 | 1 | |||
Number of warrants in a unit | 1 | ||||
Price per unit | $ 10 | $ 10 | $ 10 | ||
IPO | Public Warrants | |||||
Debt and Equity Securities, FV-NI [Line Items] | |||||
Number of shares issuable per warrant | 1 | ||||
Warrants exercise price | $ 11.50 | $ 11.50 | $ 11.50 |
Warrant Liabilities - Quantitat
Warrant Liabilities - Quantitative Information Regarding Level 3 Inputs (Details $ in Thousands | 3 Months Ended | 12 Months Ended | |||
Mar. 31, 2021USD ($) | Dec. 31, 2020USD ($)Y$ / shares | Dec. 31, 2019USD ($) | Mar. 26, 2021USD ($) | Dec. 29, 2020Y$ / shares | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Change in fair value of warrant liabilities | $ | $ 41,800 | $ (7,166) | $ 0 | ||
Private Warrants | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Fair value | $ | $ 82,000 | $ 50,800 | |||
Exercise price | Level 3 | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Measurement input | 11.50 | 11.50 | |||
Exercise price | Level 3 | Private Warrants | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Measurement input | $ / shares | 11.50 | 11.50 | |||
Stock price | Level 3 | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Measurement input | 22.76 | 15.96 | |||
Stock price | Level 3 | Private Warrants | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Measurement input | $ / shares | 22.76 | 21.65 | |||
Volatility | Level 3 | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Measurement input | 41.4 | 42.6 | |||
Volatility | Level 3 | Private Warrants | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Measurement input | 41.4 | 41.4 | |||
Term (years) | Level 3 | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Measurement input | 5 | 4.77 | |||
Term (years) | Level 3 | Private Warrants | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Measurement input | Y | 5 | 5 | |||
Term (years) | Level 3 | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Measurement input | 0.37 | 0.76 | |||
Term (years) | Level 3 | Private Warrants | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Measurement input | 0.37 | 0.36 |
Earnout Interest Liability - Ad
Earnout Interest Liability - Additional Information (Details) $ / shares in Units, $ in Thousands | Jan. 13, 2021USD ($)shares | Jan. 13, 2021D$ / sharesshares | Mar. 31, 2021USD ($) | Dec. 31, 2020USD ($) | Dec. 31, 2019USD ($) |
Earnout Interests Liability [Line items] | |||||
VWAP exceeded by company | $ / shares | $ 14 | ||||
Number of trading days to calculate VWAPs | D | 10 | ||||
Number of consecutive trading days to calculate VWAPs | D | 20 | ||||
Change in fair value of earnout interests liability | $ | $ (13,700) | $ 13,740 | $ 2,338 | $ 0 | |
Class A Common Stock | |||||
Earnout Interests Liability [Line items] | |||||
Number of shares reclassed to equity | shares | 1,212,813 | 1,212,813 | |||
Class V common stock | |||||
Earnout Interests Liability [Line items] | |||||
Number of shares reclassed to equity | shares | 15,000,000 | 15,000,000 |
Equity (Details)
Equity (Details) | Dec. 29, 2020USD ($)$ / sharesshares | Mar. 31, 2021USD ($)$ / sharesshares | Dec. 31, 2020USD ($)Vote$ / sharesshares | Jan. 13, 2021 | Dec. 31, 2019USD ($)$ / shares | Dec. 19, 2019USD ($)shares |
Debt and Equity Securities, FV-NI [Line Items] | ||||||
Number of shares authorized | 951,000,000 | |||||
Sellers | RSILP | ||||||
Debt and Equity Securities, FV-NI [Line Items] | ||||||
Purchased units | 12,500,000 | |||||
Class A Common Stock | ||||||
Debt and Equity Securities, FV-NI [Line Items] | ||||||
Common stock, shares authorized | 750,000,000 | |||||
Common stock, par value | $ / shares | $ 0.0001 | $ 0.0001 | $ 0.0001 | |||
Common Stock outstanding | 44,792,517 | |||||
Earnout interests | 1,212,813 | |||||
Treasury stock repurchased | 218,589 | |||||
Treasury stock average price | $ / shares | $ 15.85 | |||||
Treasury stock of total cost | $ | $ 3,500,000 | |||||
Class A Common Stock | RSILP | ||||||
Debt and Equity Securities, FV-NI [Line Items] | ||||||
Earnout interests | 1,212,813 | |||||
Class V common stock | ||||||
Debt and Equity Securities, FV-NI [Line Items] | ||||||
Common stock, shares authorized | 200,000,000 | |||||
Common stock, par value | $ / shares | $ 0.0001 | $ 0.0001 | $ 0.0001 | |||
Common Stock outstanding | 160,000,000 | |||||
Earnout interests | 15,000,000 | |||||
Class V common stock | RSILP | ||||||
Debt and Equity Securities, FV-NI [Line Items] | ||||||
Common stock, par value | $ / shares | $ 0.0001 | |||||
Earnout interests | 15,000,000 | 15,000,000 | ||||
Consideration for shares cancelled per unit exchanged | $ | $ 0 | |||||
Common Stock | ||||||
Debt and Equity Securities, FV-NI [Line Items] | ||||||
Number of Votes per Share | Vote | 1 | |||||
Preferred stock | ||||||
Debt and Equity Securities, FV-NI [Line Items] | ||||||
Number of shares authorized | 1,000,000 | |||||
Preferred stock, shares authorized | 1,000,000 | |||||
Preferred stock, par value | $ / shares | $ 0.0001 | |||||
Number of Votes per Share | Vote | 1 | |||||
Shares of preferred stock outstanding | 0 | |||||
Common A-1 Units | RSILP | ||||||
Debt and Equity Securities, FV-NI [Line Items] | ||||||
Capital contributed | $ | $ 6,500,000 | $ 1,000,000 | ||||
RSI GP | ||||||
Debt and Equity Securities, FV-NI [Line Items] | ||||||
Capital contributed | $ | $ 14,500,000 | |||||
Special Limited Partner | RSILP | ||||||
Debt and Equity Securities, FV-NI [Line Items] | ||||||
Amount distributed to the limited partners | $ | $ 5,200,000 | |||||
Special Limited Partner | Sellers | RSILP | ||||||
Debt and Equity Securities, FV-NI [Line Items] | ||||||
Purchased Units Cash Consideration | $ | $ 125,000,000 | |||||
Special Limited Partner | Common Stock | RSILP | ||||||
Debt and Equity Securities, FV-NI [Line Items] | ||||||
Purchased Units Cash Consideration | $ | $ 125,000,000 | |||||
Special Limited Partner | Common A-1 Units | RSILP | ||||||
Debt and Equity Securities, FV-NI [Line Items] | ||||||
Purchased units | 172,500,000 | |||||
Special Limited Partner | Common B-1 Units | RSILP | ||||||
Debt and Equity Securities, FV-NI [Line Items] | ||||||
Purchased units | 12,500,000 | |||||
Members' Deficit | RSI GP | ||||||
Debt and Equity Securities, FV-NI [Line Items] | ||||||
Capital contributed | $ | $ 27,000,000 | |||||
RSILP | ||||||
Debt and Equity Securities, FV-NI [Line Items] | ||||||
Percentage of common units retained by sellers | 73.00% | |||||
RSILP | Sellers | ||||||
Debt and Equity Securities, FV-NI [Line Items] | ||||||
Percentage of common units retained by sellers | 76.90% | 76.90% | ||||
RSILP | Sellers | Earnout interests fully earned and no longer subject to restriction on transfer and voting | Maximum | ||||||
Debt and Equity Securities, FV-NI [Line Items] | ||||||
Percentage of common units retained by sellers | 78.10% |
Share-Based Compensation - Ince
Share-Based Compensation - Incentive Plan (Details) - 2020 Omnibus Equity Incentive Plan - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | Dec. 31, 2020 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Number of awards granted | 0 | ||
Share-based compensation expense related to profit interests | $ 11,576 | $ 13,490 | |
Restricted stock unit ("RSU") | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Aggregate fair value granted | 57,800 | ||
Unrecognized stock-based compensation expense | $ 46,200 | ||
Weighted-average vesting period expected to be recognized | 3 years 8 months 27 days | ||
Restricted stock unit ("RSU") | RSILP | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Share-based compensation expense related to profit interests | $ 13,500 | ||
Class A Common Stock | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Aggregate number of shares reserved under the Plan | 13,400,000 |
Share-Based Compensation - Unit
Share-Based Compensation - Unit activity (Details) - $ / shares | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Number of units | |||
Granted | 10 | 10 | |
Restricted stock unit ("RSU") | 2020 Omnibus Equity Incentive Plan | |||
Number of units | |||
Unvested balance | 0 | ||
Granted | 3,647,504 | ||
Vested | (719,479) | ||
Unvested balance | 2,928,025 | 0 | |
Weighted average grant price | |||
Unvested balance | $ 0 | ||
Granted | 15.85 | ||
Vested | 15.85 | ||
Unvested balance | $ 15.85 | $ 0 | |
Common B-1 Units | |||
Number of units | |||
Unvested balance | 522,086 | ||
Granted | 683,889 | 4,475,029 | |
Vested | (1,205,975) | (3,952,943) | |
Unvested balance | 522,086 |
Share-Based Compensation - Shar
Share-Based Compensation - Share-based compensation expense (Details) - 2020 Omnibus Equity Incentive Plan - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||
Total share-based compensation expense | $ 11,576 | $ 13,490 |
Costs of revenue | ||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||
Total share-based compensation expense | 915 | |
Advertising and promotions | ||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||
Total share-based compensation expense | 1,698 | |
General administration and other | ||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||
Total share-based compensation expense | $ 8,963 | $ 13,490 |
Income Taxes - Components of In
Income Taxes - Components of Income tax provision (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Current income taxes: | |||
Federal | $ 0 | ||
State and local | 0 | ||
Foreign | 2,708 | ||
Total current | 2,708 | ||
Deferred income taxes: | |||
Federal | 0 | ||
State and local | 0 | ||
Foreign | 211 | ||
Total deferred | $ (317) | 211 | |
Income tax provision | $ 804 | $ 2,919 | $ 0 |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Details) - USD ($) $ in Millions | Dec. 29, 2020 | Mar. 31, 2021 | Mar. 31, 2020 | Dec. 31, 2020 |
Income Tax [Line Items] | ||||
Effective tax rates | 110.44% | 0.00% | ||
U. S. Federal Statutory rate | 21.00% | |||
Unrecognized Tax Receivable Agreement liability | $ 51.6 | $ 51.6 | ||
Federal and state net operating loss carryovers | $ 0.5 | |||
RSILP | ||||
Income Tax [Line Items] | ||||
Percentage of common units acquired | 23.10% | 23.10% | ||
RSILP | Special Limited Partner | ||||
Income Tax [Line Items] | ||||
Percentage of net income tax savings, entitled to pay | 85.00% |
Loss Per Share (Details)
Loss Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2021 | Mar. 31, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | |
Numerator: | ||||
Net loss | $ (76) | $ (12,943) | $ (131,645) | $ (22,450) |
Less: Net loss attributable to RSILP prior to the Business Combination | (136,323) | |||
Less: Net loss attributable to noncontrolling interests | (59) | 132,726 | $ 0 | |
Less: Net income attributable to noncontrolling interests after the Business Combination | 3,597 | |||
Net income attributable to Rush Street Interactive, Inc. - basic | (17) | 1,081 | ||
Effect of dilutive securities: | ||||
Public, Private Placement and Working Capital Warrants, net of amounts attributable to noncontrolling interests | (1,656) | |||
Warrants, net of amounts attributable to noncontrolling interests | (9,569) | |||
Net loss attributable to Rush Street Interactive, Inc. - diluted | $ (9,586) | $ (575) | ||
Denominator: | ||||
Weighted average common shares outstanding - basic | 46,955,262 | 43,579,704 | ||
Weighted average effect of dilutive securities: | ||||
Public Warrants | 3,770,106 | 5,481,341 | ||
Private Placement and Working Capital Warrants | 2,690,120 | 3,181,561 | ||
Weighted average common shares outstanding - diluted | 53,415,488 | 52,242,606 | ||
Net loss per Class A common share - basic | $ 0 | $ 0.02 | ||
Net loss per Class A common share - diluted | $ (0.18) | $ (0.01) |
Loss Per Share - Anti dilutive
Loss Per Share - Anti dilutive (Details) - shares | Dec. 29, 2020 | Mar. 31, 2021 | Dec. 31, 2020 |
RSILP Units | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Securities excluded from computation of diluted shares outstanding, as their effect would have been anti-dilutive | 160,000,000 | 160,000,000 | |
Restricted stock unit ("RSU") | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Securities excluded from computation of diluted shares outstanding, as their effect would have been anti-dilutive | 2,928,025 | ||
Class A Common Stock | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Shares placed in escrow subject to the achievement of certain earnout targets | 1,212,813 | ||
Class A Common Stock | Earnout Interests | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Securities excluded from computation of diluted shares outstanding, as their effect would have been anti-dilutive | 1,212,813 | ||
Class V common stock | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Shares placed in escrow subject to the achievement of certain earnout targets | 15,000,000 | ||
RSILP | Class A Common Stock | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Shares placed in escrow subject to the achievement of certain earnout targets | 1,212,813 | ||
RSILP | Class V common stock | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Shares placed in escrow subject to the achievement of certain earnout targets | 15,000,000 | 15,000,000 |
Related Parties (Details)
Related Parties (Details) $ in Millions | Dec. 29, 2020 | Mar. 31, 2021USD ($) | Mar. 31, 2020USD ($) | Dec. 31, 2020USD ($)Dshares | Dec. 31, 2019USD ($) |
RSI A&R LPA | RSILP | |||||
Related Party Transaction [Line Items] | |||||
Threshold Period For Right to Exchange Retained Units | 6 months | ||||
Threshold minimum number of Retained units that should be exchanged in any single exchange | shares | 1,000 | ||||
Number of days VWAP considered for cash per unit payable by Special Limited Partner | D | 5 | ||||
Services Agreement | RSILP | |||||
Related Party Transaction [Line Items] | |||||
Term of the agreement | 2 years | 2 years | |||
Affiliated Land-Based Casinos | |||||
Related Party Transaction [Line Items] | |||||
Related Party Costs | $ 12.5 | $ 4.8 | $ 135.5 | $ 6.9 | |
Due from Related Parties, Current | $ 30 | $ 28.8 | 3.1 | ||
RSG | Services Agreement | |||||
Related Party Transaction [Line Items] | |||||
Percentage of employee's salary, bonus and benefits cost considered for payroll reimbursement | 150.00% | 150.00% | |||
Expenses relating to related party | $ 0.3 | $ 0.2 | $ 1.3 | 0.6 | |
Payables due to related party | $ 0.3 | $ 0.3 | $ 0.2 | ||
RSILP | RSI GP | |||||
Related Party Transaction [Line Items] | |||||
Ownership of units (in percent) | 1.00% | ||||
RSILP | Bluhm and Trust | |||||
Related Party Transaction [Line Items] | |||||
Ownership of units (in percent) | 73.00% | ||||
RSILP | Carlin and Trust | |||||
Related Party Transaction [Line Items] | |||||
Ownership of units (in percent) | 20.00% | ||||
Class A Common Stock | RSILP | |||||
Related Party Transaction [Line Items] | |||||
Shares Conversion Ratio | 1 | ||||
Class A Common Stock | RSI A&R LPA | RSILP | |||||
Related Party Transaction [Line Items] | |||||
Shares Conversion Ratio | 1 | ||||
Class V common stock | RSI A&R LPA | RSILP | |||||
Related Party Transaction [Line Items] | |||||
Number of shares cancelled per unit exchanged | shares | 1 |
Commitments and Contingencies_2
Commitments and Contingencies (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended |
Mar. 31, 2021 | Dec. 31, 2020 | |
Loss Contingencies [Line Items] | ||
Equity stake offered (in percent) | 1.00% | 1.00% |
Contractual Obligation, Fiscal Year Maturity [Abstract] | ||
From April 1, 2021 to December 31, 2021 | $ 9,234 | |
Year ending December 31, 2022 | 6,367 | $ 14,598 |
Year ending December 31, 2023 | 2,706 | 6,065 |
Year ending December 31, 2024 | 1,514 | 2,684 |
Year ending December 31, 2025 | 10,537 | 1,513 |
Year ending December 31, 2025 | 10,537 | |
Thereafter | 24,577 | |
Thereafter | 24,577 | |
Total | 54,935 | 59,974 |
Operating lease cost | 1,300 | $ 252 |
Marketing Vendors [Member] | ||
Contractual Obligation, Fiscal Year Maturity [Abstract] | ||
Operating lease cost | 17,300 | |
License, Market Access Commitments [Member] | ||
Contractual Obligation, Fiscal Year Maturity [Abstract] | ||
Operating lease cost | 36,200 | |
Other Lease [Member] | ||
Contractual Obligation, Fiscal Year Maturity [Abstract] | ||
Operating lease cost | $ 100 |
Subsequent Events (Details)
Subsequent Events (Details) $ / shares in Units, $ in Thousands | Apr. 09, 2021USD ($) | Feb. 22, 2021USD ($)$ / sharesshares | Jan. 13, 2021USD ($)shares | Jan. 13, 2021USD ($)D$ / sharesshares | Mar. 31, 2021USD ($)$ / sharesshares | Mar. 31, 2021USD ($)$ / sharesshares | Dec. 31, 2020USD ($) | Dec. 31, 2019USD ($) | Mar. 26, 2021shares |
Subsequent Event [Line Items] | |||||||||
VWAP exceeded by company | $ / shares | $ 14 | ||||||||
Number of trading days to calculate VWAPs | D | 10 | ||||||||
Number of consecutive trading days to calculate VWAPs | D | 20 | ||||||||
Change in fair value of earnout interests liability | $ | $ (13,700) | $ 13,740 | $ 2,338 | $ 0 | |||||
Number of shares called by warrants | 11,442,389 | 11,442,389 | |||||||
Public Warrants | |||||||||
Subsequent Event [Line Items] | |||||||||
Number of shares called by warrants | 11,500,000 | ||||||||
Exercise price of warrants | $ / shares | $ 11.50 | $ 11.50 | $ 11.50 | ||||||
Total potential cash proceeds | $ | $ 131,600 | ||||||||
Subsequent event | |||||||||
Subsequent Event [Line Items] | |||||||||
VWAP exceeded by company | $ / shares | $ 14 | ||||||||
Number of trading days to calculate VWAPs | D | 10 | ||||||||
Number of consecutive trading days to calculate VWAPs | D | 20 | ||||||||
Change in fair value of earnout interests liability | $ | $ 13,700 | ||||||||
Subsequent event | Public Warrants | |||||||||
Subsequent Event [Line Items] | |||||||||
Number of shares called by warrants | 11,442,389 | 11,442,389 | |||||||
Exercise price of warrants | $ / shares | $ 11.50 | $ 11.50 | |||||||
Subsequent event | Private Warrants | |||||||||
Subsequent Event [Line Items] | |||||||||
Number of shares called by warrants | 2,571,808 | ||||||||
Subsequent event | Officers and non-employee directors | |||||||||
Subsequent Event [Line Items] | |||||||||
Aggregate fair value of equity grants | $ | $ 5,100 | ||||||||
Class A Common Stock | |||||||||
Subsequent Event [Line Items] | |||||||||
Number of shares reclassed to equity | 1,212,813 | 1,212,813 | |||||||
Stock Issued During Period, Shares, New Issues | 14,014,197 | ||||||||
Class A Common Stock | Subsequent event | |||||||||
Subsequent Event [Line Items] | |||||||||
Number of shares reclassed to equity | 1,212,813 | 1,212,813 | |||||||
Number of shares called by warrants | 11,500,000 | ||||||||
Exercise price of warrants | $ / shares | $ 11.50 | ||||||||
Class A Common Stock | Subsequent event | Public Warrants | |||||||||
Subsequent Event [Line Items] | |||||||||
Total potential cash proceeds | $ | $ 131,600 | ||||||||
Stock Issued During Period, Shares, New Issues | 11,442,389 | ||||||||
Class V common stock | Subsequent event | |||||||||
Subsequent Event [Line Items] | |||||||||
Number of shares reclassed to equity | 15,000,000 | 15,000,000 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Mar. 31, 2021 | Dec. 31, 2020 | Mar. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | [1] |
Current assets | ||||||
Cash and cash equivalents | $ 363,575 | $ 255,622 | $ 6,905 | |||
Restricted cash | 11,568 | 6,443 | 3,638 | |||
Players receivables | 3,389 | 779 | 1,851 | |||
Due from affiliates | 29,987 | 28,764 | 3,135 | |||
Prepaid expenses and other current assets | 3,280 | 2,871 | 1,673 | |||
Total current assets | 411,799 | 294,479 | 17,202 | |||
License fees, net | 9,750 | 6,957 | ||||
Property and equipment, net | 2,278 | 2,016 | 581 | |||
Operating lease right-of-use asset, net | 1,033 | 1,100 | 0 | |||
Other assets | 2,080 | 1,215 | 753 | |||
Total assets | 428,802 | 308,560 | 25,493 | |||
Current liabilities | ||||||
Accounts payable | 6,306 | 11,994 | 707 | |||
Accrued expenses and other current liabilities | 37,841 | 25,995 | 9,670 | |||
Players liabilities | 14,147 | 7,779 | 5,346 | |||
Share-based liability | 0 | 7,342 | ||||
Deferred royalty, short-term | 255 | 195 | 159 | |||
Operating lease liabilities, short-term | 270 | 226 | 0 | |||
Due to affiliates | 617 | 3,751 | 2,858 | |||
Earnout interests liability | 351,048 | 0 | ||||
Total current liabilities | 59,436 | 400,988 | 26,082 | |||
Deferred royalty, long-term | 3,733 | 3,813 | 2,779 | |||
Operating lease liabilities, long-term | 868 | 979 | 0 | |||
Warrant liabilities | 170,109 | 0 | ||||
Total liabilities | 64,037 | 575,889 | 28,861 | |||
Commitments and contingencies | ||||||
Stockholders' deficit | ||||||
Treasury stock, 218,589 and 0 shares as of March 31, 2021 and December 31, 2020, respectively | (850) | |||||
Additional paid-in capital | 142,835 | (18,402) | 0 | |||
Accumulated other comprehensive income | (50) | 93 | 0 | |||
Accumulated deficit | (43,507) | (43,490) | 0 | |||
Total stockholders' equity (deficit) attributed to Rush Street Interactive, Inc. | 98,450 | (61,779) | 0 | |||
Non-controlling interests | 266,315 | (205,550) | 0 | |||
Members' deficit | 0 | (3,368) | ||||
Total stockholders' equity (deficit) | 364,765 | (267,329) | $ (14,390) | (3,368) | $ (2,539) | |
Total liabilities and stockholders' equity (deficit) | 428,802 | 308,560 | 25,493 | |||
Class A Common Stock | ||||||
Stockholders' deficit | ||||||
Class A common stock, $0.0001 par value, 750,000,000 shares authorized as of March 31, 2021 and December 31, 2020; 59,377,953 and 44,792,517 shares issued as of March 31, 2021 and December 31, 2020, respectively; 59,159,364 and 44,792,517 shares outstanding as of March 31, 2021 and December 31, 2020, respectively | 6 | 4 | 0 | |||
Total stockholders' equity (deficit) | 6 | 4 | ||||
Class V common stock | ||||||
Stockholders' deficit | ||||||
Class A common stock, $0.0001 par value, 750,000,000 shares authorized as of March 31, 2021 and December 31, 2020; 59,377,953 and 44,792,517 shares issued as of March 31, 2021 and December 31, 2020, respectively; 59,159,364 and 44,792,517 shares outstanding as of March 31, 2021 and December 31, 2020, respectively | 16 | 16 | $ 0 | |||
Total stockholders' equity (deficit) | $ 16 | $ 16 | ||||
[1] | Previously reported amounts have been adjusted for the retroactive application of the recapitalization related to the Business Combination. Refer to Note 4 for further information. |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Mar. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Treasury Stock, Shares | 218,589 | 0 | |
Class A Common Stock | |||
Common Stock, Par or Stated Value Per Share | $ 0.0001 | $ 0.0001 | $ 0.0001 |
Common Stock, Shares Authorized | 750,000,000 | 750,000,000 | 0 |
Common Stock, Shares, Issued | 59,377,953 | 44,792,517 | 0 |
Common Stock, Shares, Outstanding | 59,159,364 | 44,792,517 | 0 |
Class V common stock | |||
Common Stock, Par or Stated Value Per Share | $ 0.0001 | $ 0.0001 | $ 0.0001 |
Common Stock, Shares Authorized | 200,000,000 | 200,000,000 | 0 |
Common Stock, Shares, Issued | 160,000,000 | 160,000,000 | 0 |
Common Stock, Shares, Outstanding | 160,000,000 | 160,000,000 | 0 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Thousands | Jan. 13, 2021 | Mar. 31, 2021 | Mar. 31, 2020 | Dec. 31, 2020 | Dec. 31, 2019 |
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) | |||||
Revenue | $ 111,820 | $ 35,177 | $ 278,500 | $ 63,667 | |
Operating costs and expenses | |||||
Costs of revenue | 79,687 | 22,380 | 190,873 | 32,893 | |
Advertising and promotions | 42,216 | 8,470 | 56,517 | 28,313 | |
General administration and other | 16,564 | 16,766 | 162,447 | 23,649 | |
Depreciation and amortization | 674 | 459 | 2,082 | 1,139 | |
Total operating costs and expenses | 139,141 | 48,075 | 411,919 | 85,994 | |
Loss from operations | (27,321) | (12,898) | (133,419) | (22,327) | |
Other income (expenses) | |||||
Interest expense, net | (13) | (45) | (135) | (123) | |
Change in fair value of warrant liabilities | 41,802 | ||||
Change in fair value of warrant liabilities | (41,800) | 7,166 | 0 | ||
Change in fair value of earnout interests liability | $ 13,700 | (13,740) | (2,338) | 0 | |
Total other income (expenses) | 28,049 | (45) | 4,693 | (123) | |
Loss before income taxes | 728 | (12,943) | (128,726) | (22,450) | |
Income tax expense | 804 | 2,919 | 0 | ||
Net loss | (76) | (12,943) | (131,645) | (22,450) | |
Net loss attributable to non-controlling interests | (59) | 132,726 | 0 | ||
Net Loss attributable to Rush Street Interactive, Inc. | $ (17) | (12,943) | $ 1,081 | (22,450) | |
Net loss per Class A common share - basic | $ 0 | $ 0.02 | |||
Weighted average common shares outstanding - basic | 46,955,262 | 43,579,704 | |||
Net loss per Class A common share - diluted | $ (0.18) | $ (0.01) | |||
Weighted average common shares outstanding - diluted | 53,415,488 | 52,242,606 | |||
COMPREHENSIVE LOSS | |||||
Net loss | $ (76) | (12,943) | $ (131,645) | (22,450) | |
Other comprehensive income (loss) | |||||
Foreign currency translation adjustment | (624) | (364) | (524) | (10) | |
Comprehensive loss | 700 | 13,307 | (131,121) | (22,440) | |
Comprehensive loss attributable to non-controlling interests | 540 | (132,202) | 0 | ||
Comprehensive loss attributable to Rush Street Interactive, Inc. | $ 160 | $ 13,307 | $ 1,081 | $ (22,440) |
CONSOLIDATED STATEMENTS OF CHAN
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (DEFICIT) - USD ($) $ in Thousands | Class A Common Stock | Class V common stock | Treasury Stock | Additional Paid-in Capital | Accumulated Other Comprehensive Loss | Accumulated Deficit | Total Stockholders' Deficit | Non-Controlling Interests | Members' Deficit | Total | |
Balance at beginning of year at Dec. 31, 2018 | [1] | $ (2,539) | $ (2,539) | ||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||
Members' contribution | 15,545 | 15,545 | |||||||||
Share-based compensation | 6,066 | 6,066 | |||||||||
Foreign currency translation adjustment | (10) | (10) | |||||||||
Net income (loss) | (22,450) | (22,450) | |||||||||
Balance at end of the year at Dec. 31, 2019 | (3,368) | (3,368) | |||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||
Members' contribution | 2,000 | 2,000 | |||||||||
Share-based compensation | 285 | 285 | |||||||||
Foreign currency translation adjustment | (364) | (364) | |||||||||
Net income (loss) | (12,943) | (12,943) | |||||||||
Balance at end of the year at Mar. 31, 2020 | (14,390) | (14,390) | |||||||||
Balance at beginning of year at Dec. 31, 2019 | (3,368) | (3,368) | |||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||
Members' contribution | 6,500 | 6,500 | |||||||||
Share-based compensation | 1,692 | 1,692 | |||||||||
Disctribution to members | (5,192) | (5,192) | |||||||||
Settlement of share-based liability in exchange for RSILP Units | 150,382 | 150,382 | |||||||||
Foreign currency translation adjustment | (524) | (524) | |||||||||
Proceeds and shares issued in the Business Combination (Note 4) | $ 4 | $ 16 | $ (18,402) | $ 93 | $ (44,571) | $ (62,860) | $ (209,147) | (14,215) | (286,222) | ||
Proceeds and shares issued in the Business Combination (Note 4) (in shares) | 44,792,517 | 160,000,000 | |||||||||
Net income (loss) | 1,081 | 1,081 | 3,597 | $ (136,323) | (131,645) | ||||||
Balance at end of the year at Dec. 31, 2020 | $ 4 | $ 16 | (18,402) | 93 | (43,490) | (61,779) | (205,550) | (267,329) | |||
Balance at end of the year (in shares) at Dec. 31, 2020 | 44,792,517 | 160,000,000 | |||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||
Share-based compensation | 2,772 | 2,772 | 8,804 | 11,576 | |||||||
Share-based compensation (in shares) | 571,239 | ||||||||||
Foreign currency translation adjustment | (143) | (143) | (481) | (624) | |||||||
Issuance of Class A Common Stock upon exercise of Warrants | $ 2 | 75,372 | 75,374 | 184,521 | 259,895 | ||||||
Settlement of earnout interests liability | 83,093 | 83,093 | 281,695 | 364,788 | |||||||
Net income (loss) | (17) | (17) | (59) | (76) | |||||||
Balance at end of the year at Mar. 31, 2021 | $ 6 | $ 16 | $ (850) | $ 142,835 | $ (50) | $ (43,507) | 98,450 | 266,315 | 364,765 | ||
Balance at end of the year (in shares) at Mar. 31, 2021 | 59,159,364 | 160,000,000 | 218,589 | ||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||
Repurchase of Class A Common Stock | $ (850) | $ (850) | $ (2,615) | $ (3,465) | |||||||
Repurchase of Class A Common Stock (in shares) | 218,589 | ||||||||||
[1] | Previously reported amounts have been adjusted for the retroactive application of the recapitalization related to the Business Combination. Refer to Note 4 for further information. |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2021 | Mar. 31, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | |
Cash flows from operating activities | ||||
Net loss | $ (76) | $ (12,943) | $ (131,645) | $ (22,450) |
Adjustments to reconcile net loss to net cash provided by (used in) operating activities | ||||
Share-based compensation expense | 11,576 | 13,490 | 144,733 | 13,407 |
Depreciation expense | 674 | 459 | 490 | 100 |
Amortization of license fee | 500 | 400 | 1,592 | 1,039 |
Noncash lease expense | 67 | 27 | 205 | |
Change in fair value of earnout interests liability | 13,740 | 2,338 | 0 | |
Change in fair value of warrant liabilities | (41,802) | (7,166) | ||
Changes in assets and liabilities: | ||||
Players receivables | (2,610) | 1,004 | 1,072 | (1,797) |
Due from affiliates | (1,223) | (4,860) | (25,629) | (2,536) |
Prepaid expenses and other current assets | (268) | 347 | (1,199) | (607) |
Other assets | (298) | (65) | (462) | (502) |
Accounts payable | (5,688) | 144 | 11,229 | 129 |
Accrued expenses and other current liabilities | 11,846 | 1,176 | ||
Accrued expenses and other current liabilities | 16,325 | 4,458 | ||
Players liabilities | 6,368 | (2,181) | 2,433 | 2,678 |
Deferred royalty | (20) | (29) | 1,070 | 2,070 |
Lease liabilities | (67) | (27) | (100) | |
Due to affiliates | (3,134) | 421 | 893 | 1,552 |
Net cash used in operating activities | (11,232) | (3,037) | 16,179 | (2,459) |
Cash flows from investing activities | ||||
Purchases of property and equipment | (447) | (326) | (1,872) | (430) |
Acquisition of gaming licenses | (1,450) | (1,051) | (4,371) | (5,340) |
Cash paid for internally developed software costs | (909) | |||
Investment in long-term deposits | (250) | |||
Net cash used in investing activities | (3,056) | (1,377) | (6,243) | (5,770) |
Cash flows from financing activities | ||||
Proceeds from related party loan | 650 | 650 | ||
Repayments of related party loan | (650) | |||
Net proceeds from the Business Combination | 239,763 | |||
Distribution to members | (5,192) | |||
Members' capital contribution | 2,000 | 6,500 | 15,545 | |
Proceeds from shares issued for warrants | 131,447 | |||
Repurchase of common stock | (3,465) | |||
Net cash provided by financing activities | 127,982 | 2,650 | 241,071 | 15,545 |
Effect of exchange rate changes on cash, cash equivalents and restricted cash | (616) | (370) | 515 | (6) |
Net change in cash, cash equivalents and restricted cash | 113,078 | (2,134) | 251,522 | 7,310 |
Cash, cash equivalents and restricted cash, at the beginning of the period | 262,065 | 10,543 | 10,543 | 3,233 |
Cash, cash equivalents and restricted cash, at the end of the period | 375,143 | 8,409 | 262,065 | $ 10,543 |
Supplemental disclosure of noncash investing and financing activities: | ||||
Right-of-use assets obtained in exchange for new or modified operating lease liabilities | $ 727 | 1,305 | ||
Non-cash redemption of Private Placement and Working Capital Warrants | 50,798 | |||
Non-cash settlement of Public Warrants | 77,650 | |||
Non-cash settlement of Earnout Interests Liability | 364,788 | |||
Increase in accounts payable for property and equipment purchases | 58 | |||
Earnout interests liability recognized in the Business Combination | 348,710 | |||
Warrant liabilities recognized in the Business Combination | 181,271 | |||
Supplemental disclosure of cash flow information: | ||||
Cash paid for income taxes | $ 252 | $ 763 |
Description of Business_2
Description of Business | 3 Months Ended | 12 Months Ended |
Mar. 31, 2021 | Dec. 31, 2020 | |
Description of Business | ||
Description of Business | 1. Description of Business Rush Street Interactive, Inc. is a holding company organized under the laws of the State of Delaware and, through its main operating subsidiary, Rush Street Interactive, LP and its subsidiaries (collectively, “RSILP”), is a leading online gaming company that provides online casino and sports betting in the U.S. and Latin America markets. Rush Street Interactive, Inc. and its subsidiaries (including RSILP) are collectively referred to as “RSI” or the “Company.” The Company is headquartered in Chicago, IL. On December 29, 2020, dMY Technology Group, Inc. (“dMY”), a special purpose acquisition company incorporated in Delaware on September 27, 2019, completed the acquisition of certain units of RSILP pursuant to a Business Combination Agreement, dated as of July 27, 2020 (as amended and restated on October 9, 2020, as further amended on December 4, 2020), (the “Business Combination Agreement”), between RSILP, the sellers set forth on the signature pages thereto (collectively, the “Sellers” and each, a “Seller”), dMY Sponsor, LLC, a Delaware limited liability company (the “Sponsor”), and Rush Street Interactive GP, LLC, a Delaware limited liability company, in its capacity as the Sellers’ Representative (in such capacity, the “Sellers’ Representative”). In connection with the closing (the “Closing”) of the transactions described in the Business Combination Agreement (the “Business Combination”), the Company was reorganized in an umbrella partnership-C corporation, or UP-C, structure, in which substantially all of the assets of the combined company are held by RSILP and the Company’s only assets are its equity interests in RSILP (which are held indirectly through wholly-owned subsidiaries of the Company – RSI ASLP, Inc. (the “Special Limited Partner”) and RSI GP, LLC (“RSI GP”), which is the general partner of RSILP). As of the Closing, the Company owned, indirectly through the Special Limited Partner, approximately 23.1% of the Common Units of RSILP (“RSILP Units”) and controls RSILP through RSI GP, and the Sellers owned approximately 76.9% of the RSILP Units and control the Company through their ownership of the Class V Common Stock, par value $0.0001 per share, of the Company (the “Class V Common Stock”). Upon consummation of the Business Combination, dMY changed its name to “Rush Street Interactive, Inc.” As of March 31, 2021, the Company and the Sellers owned approximately 27.0% and 73.0% of the RSILP Units, respectively. Impact of COVID-19 The COVID-19 pandemic has adversely impacted global commercial activity, disrupted supply chains and contributed to significant volatility in financial markets. In 2020 and continuing into 2021, the COVID-19 pandemic continued to adversely impact many different industries. The ongoing COVID-19 pandemic could have a continued material adverse impact on economic and market conditions and trigger a period of global economic slowdown. The rapid development and fluidity of this situation precludes any prediction as to the extent and the duration of the impact of COVID-19. The COVID-19 pandemic therefore presents material uncertainty and risk with respect to the Company and its performance and could affect its financial results in a materially adverse way. The COVID-19 pandemic has significantly impacted RSI. The direct impact, beyond disruptions in normal business operations, is primarily through the change in consumer habits as a result of stay-at-home orders and similar consumer restrictions. During that time, RSI experienced increased player activity that has continued to remain strong even after many of these orders were lifted. COVID-19 has also had a direct impact on sports betting due to the rescheduling, reconfiguring, suspension, postponement and cancellation of major sports seasons and sporting events. The suspension of sports seasons and sporting events reduced RSI’s customers’ use of, and spending on, RSI’s sports betting offerings. Primarily starting in the third quarter and continuing into the fourth quarter of 2020, most major professional sports leagues resumed their activities. The return of major sports and sporting events, as well as the unique and concentrated sports calendar, generated significant customer interest and activity in the Company’s sports betting offerings. However, sports seasons and calendars continue to remain uncertain and could be further suspended, cancelled or rescheduled due to additional COVID-19 outbreaks. The Company’s revenues vary based on sports seasons and sporting events, among other things, and cancellations, suspensions or alterations resulting from COVID-19 have the potential to adversely affect our revenue, possibly materially. However, the Company’s online casino offerings do not rely on sports seasons and sporting events, and as such, they may partially offset this adverse impact on revenue. The ultimate impact of COVID-19 and the related restrictions on consumer behavior is currently unknown. A significant or prolonged decrease in consumer spending on entertainment or leisure activities would likely have an adverse effect on demand for RSI offerings, reducing cash flows and revenues, thus materially harming the business, financial condition and results of operations. In addition, a recurrence of COVID-19 cases or an emergence of additional variants or strains could cause other widespread or more severe impacts depending on where infection rates are highest. As steps taken to mitigate the spread of COVID-19 have necessitated a shift away from a traditional office environment for many employees, the Company has business continuity programs in place to ensure that employees are safe, and that the business continues to function with minimal disruptions to normal work operations while employees work remotely. The Company will continue to monitor developments relating to disruptions and uncertainties caused by COVID-19. | 1. Description of Business Rush Street Interactive, Inc. is a holding company organized under the laws of the State of Delaware and, through its main operating subsidiary, Rush Street Interactive, LP and its subsidiaries (collectively, “RSILP”), is a leading online gaming company that provides online casino and sports betting in the U.S. and Latin America markets. Rush Street Interactive, Inc. and its subsidiaries (including RSILP) are collectively referred to as “RSI” or the “Company." The Company is headquartered in Chicago, IL. Prior to the Reorganization (see Reorganization section below), RSILP was formed in the State of Delaware originally as Rush Street Interactive, LLC (“RSI LLC”) in March 2012. In December 2019, RSI LLC converted to a Delaware limited partnership. RSI launched its first social gaming website in 2015 and began accepting real-money bets in the United States in 2016. The Company establishes and utilizes subsidiaries, usually in the form of limited liability companies, to facilitate its operations in primarily jurisdictions where the Company is licensed to operate. Currently, RSI offers a combination of real-money online casino and sports betting, retail sports betting and retail sports services in the nine U.S. states as outlined in the table below. Online Sports Retail Sports U.S. State Online Casino Betting Betting Colorado P Illinois P P Indiana P P Iowa P Michigan P P P Pennsylvania P P P New Jersey P P New York P Virginia P In addition, in 2018, RSI became the first U.S.-based online gaming operator to launch in Colombia, which was an early adopting Latin American country to legalize and regulate online casino and sports betting. Currently, the Company offers both online casino and online sports betting in Colombia. Reorganization On December 29, 2020, dMY Technology Group, Inc. (“dMY”), a special purpose acquisition company incorporated in Delaware on September 27, 2019, completed the acquisition of certain units of RSILP pursuant to a Business Combination Agreement, dated as of July 27, 2020 (as amended and restated on October 9, 2020, as further amended on December 4, 2020), (the “Business Combination Agreement”), between RSILP, the sellers set forth on the signature pages thereto (collectively, the “Sellers” and each, a “Seller”), dMY Sponsor, LLC, a Delaware limited liability company (the “Sponsor”), and Rush Street Interactive GP, LLC, a Delaware limited liability company, in its capacity as the Sellers’ Representative (in such capacity, the “Sellers’ Representative”). In connection with the closing of the Business Combination Agreement (the “Closing”), and collectively with the other transactions described in the Business Combination Agreement, (the “Business Combination”), the Company was reorganized in an umbrella partnership-C corporation (or “Up-C structure”), in which substantially all of the assets of the combined company are held by RSILP and its subsidiaries, and Rush Street Interactive, Inc.'s only assets are its equity interests in RSILP (which are held indirectly through wholly-owned subsidiaries of the Company– RSI ASLP, Inc. (the “Special Limited Partner”) and RSI GP, LLC (“RSI GP”), which is the general partner of RSILP). As of the Closing, the Company owned, indirectly through the Special Limited Partner, approximately 23.1% of the Common Units of RSILP (“RSILP Units”) and controls RSILP through RSI GP, and the Sellers, owned approximately 76.9% of the RSILP Units and control the Company through the ownership of the Class V Common Stock (as defined below). Upon consummation of the Business Combination, dMY changed its name to “Rush Street Interactive, Inc.” See Note 4 for additional discussion related to the Business Combination. Impact of COVID-19 The COVID-19 pandemic has adversely impacted global commercial activity, disrupted supply chains and contributed to significant volatility in financial markets. In 2020, the COVID-19 pandemic adversely impacted many different industries. The ongoing COVID-19 pandemic could have a continued material adverse impact on economic and market conditions and trigger a period of global economic slowdown. The rapid development and fluidity of this situation precludes any prediction as to the extent and the duration of the impact of COVID-19. The COVID-19 pandemic therefore presents material uncertainty and risk with respect to the Company and its performance and could affect its financial results in a materially adverse way. The COVID-19 pandemic has significantly impacted RSI. The direct impact, beyond disruptions in normal business operations, is primarily through the change in consumer habits as a result of stay-at-home orders and similar consumer restrictions. During that time, RSI experienced increased player activity that has continued to remain strong even after many of these orders were lifted. COVID-19 has also had a direct impact on sports betting due to the rescheduling, reconfiguring, suspension, postponement and cancellation of major sports seasons and sporting events. The suspension of sports seasons and sporting events reduced RSI’s customers’ use of, and spending on, our sports betting offerings. Primarily starting in the third quarter and continuing into the fourth quarter of 2020, most major professional sports leagues resumed their activities. The return of major sports and sporting events, as well as the unique and concentrated sports calendar, generated significant customer interest and activity in the Company’s sports betting offerings. However, sports seasons and calendars continue to remain uncertain and could be further suspended, cancelled or rescheduled due to additional COVID-19 outbreaks. The Company’s revenues vary based on sports seasons and sporting events, among other things, and cancellations, suspensions or alterations resulting from COVID-19 have the potential to adversely affect our revenue, possibly materially. However, the Company’s online casino offerings do not rely on sports seasons and sporting events, and as such, they may partially offset this adverse impact on revenue. The ultimate impact of COVID-19 and the related restrictions on consumer behavior is currently unknown. A significant or prolonged decrease in consumer spending on entertainment or leisure activities would likely have an adverse effect on demand for RSI offerings, reducing cash flows and revenues, thus materially harming the business, financial condition and results of operations. In addition, a recurrence of COVID-19 cases or an emergence of additional variants or strains could cause other widespread or more severe impacts depending on where infection rates are highest. As steps taken to mitigate the spread of COVID-19 have necessitated a shift away from a traditional office environment for many employees, the Company has business continuity programs in place to ensure that employees are safe, and that the business continues to function with minimal disruptions to normal work operations while employees work remotely. The Company will continue to monitor developments relating to disruptions and uncertainties caused by COVID-19. |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies | 3 Months Ended | 12 Months Ended |
Mar. 31, 2021 | Dec. 31, 2020 | |
Summary of Significant Accounting Policies and Recent Accounting Pronouncements | ||
Summary of Significant Accounting Policies | 2. Summary of Significant Accounting Policies and Recent Accounting Pronouncements Basis of Presentation and Principles of Consolidation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) and the applicable regulations of the U.S. Securities and Exchange Commission (“SEC”) regarding interim financial reporting. Certain information and note disclosures normally included in annual financial statements prepared in accordance with U.S. GAAP have been condensed or omitted. Therefore, these unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and the related notes thereto as of and for the year ended December 31, 2020 included in the Company’s Annual Report on Form 10-K, as filed with the SEC on March 25, 2021 and as amended by Amendment No. 1 on Form 10-K/A and Amendment No. 2 on Form 10-K/A, as filed with the SEC on April 30, 2021 and May 7, 2021, respectively (collectively referred to herein as “Amended Annual Report”). These unaudited condensed consolidated financial statements include the accounts of the Company and its directly and indirectly wholly-owned subsidiaries. For consolidated entities that are less than wholly-owned, the third party’s holding of an equity interest is presented as Non-controlling interests in the Company’s condensed consolidated balance sheets and condensed consolidated statements of equity (deficit). The portion of net earnings attributable to the non-controlling interests is presented as Net loss attributable to non-controlling interests in the Company’s condensed consolidated statements of operations and comprehensive loss. All intercompany accounts and transactions have been eliminated upon consolidation. Pursuant to the Business Combination Agreement, the Business Combination was accounted for as a reverse recapitalization in accordance with U.S. GAAP (the “Reverse Recapitalization”). Under this method of accounting, dMY was treated as the acquired company and RSILP was treated as the acquirer for financial statement reporting purposes. Accordingly, for accounting purposes, the Reverse Recapitalization was treated as the equivalent of RSILP issuing stock for the net assets of dMY, accompanied by a recapitalization. RSILP was determined to be the accounting acquirer based on evaluation of the following facts and circumstances: · RSILP’s existing members, through their ownership of the Class V Common Stock, have the largest portion of the voting rights in the Company; · The Board of Directors of the Company and management are primarily composed of individuals associated with RSILP; and · RSILP is the larger entity based on historical operating activity and has the larger employee base. Thus, the financial statements included in this report reflect (i) the historical operating results of RSILP prior to the Reverse Recapitalization; (ii) the combined results of the RSILP and dMY following the Business Combination; and (iii) the acquired assets and liabilities of dMY stated at historical cost, with no goodwill or other intangible assets recorded. Certain prior period amounts have been reclassified to conform to the current period presentation. Interim Unaudited Condensed Consolidated Financial Statements The accompanying condensed consolidated balance sheet as of March 31, 2021, and the condensed consolidated statements of operations and comprehensive loss, stockholders' equity (deficit), and cash flows for the three months ended March 31, 2021 and 2020, are unaudited. The condensed consolidated balance sheet as of December 31, 2020 was derived from audited financial statements, but does not include all disclosures required by U.S. GAAP. The interim unaudited condensed consolidated financial statements have been prepared on a basis consistent with the annual consolidated financial statements and, in the opinion of management, reflect all adjustments, which include only normal recurring adjustments, necessary to state fairly the Company's financial condition, its operations and cash flows for the periods presented. The historical results are not necessarily indicative of future results, and the results of operations for the three months ended March 31, 2021 are not necessarily indicative of the results to be expected for the full year or any other period. Use of Estimates The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates. Significant estimates and assumptions reflected in the consolidated financial statements relate to and include, but are not limited to: the valuation of share-based awards; the estimated useful lives of property and equipment and intangible assets; redemption rate assumptions associated with the player loyalty program and other discretionary player bonuses; deferred revenue relating to our social gaming revenue stream; accrued expenses and other current liabilities; determination of the incremental borrowing rate to calculate operating lease liabilities; valuation of the earnout interests liability; valuation of the warrant liabilities; and deferred taxes and amounts associated with the Tax Receivable Agreement entered into in connection with the Business Combination (the “Tax Receivable Agreement”). Significant Accounting Policies The following accounting policy is incremental to the Company’s significant accounting policies as described in Note 2, “Summary of Significant Accounting Policies,” of its audited consolidated financial statements and related notes included in the Amended Annual Report. Internally Developed Software Software that is developed for internal use is accounted for pursuant to Accounting Standards Codification (“ASC”) 350-40, Intangibles, Goodwill and Other — Internal-Use Software . Qualifying costs incurred to develop internal-use software are capitalized when (i) the preliminary project stage is completed, (ii) management has authorized further funding for the completion of the project and (iii) it is probable that the project will be completed and perform as intended. These capitalized costs include compensation for employees who develop internal-use software and external costs related to development of internal-use software. Capitalization of these costs ceases once the project is substantially complete and the software is ready for its intended purpose. Internally developed software is amortized using the straight-line method over an estimated useful life of three to four years. All other expenditures, including those incurred to maintain an intangible asset’s current level of performance, are expensed as incurred. Recently Adopted Accounting Pronouncements In December 2019, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes (“ASU 2019-12”), which is intended to simplify various aspects related to accounting for income taxes. ASU 2019-12 removes certain exceptions to the general principles in ASC 740 and clarifies and amends existing guidance to improve consistent application. This guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020, with early adoption permitted. The Company adopted ASU 2019-12 on January 1, 2021, and the adoption had no impact on its condensed consolidated financial statements. Recent Accounting Pronouncements Not Yet Adopted In June 2016, the FASB issued ASU 2016-13, Financial Instruments – Credit Losses (Topic 326) . Together with subsequent amendments, this ASU sets forth a “current expected credit loss” model, which requires the Company to measure all expected credit losses for financial instruments held at the reporting date based on historical experience, current conditions and reasonable supportable forecasts. This ASU replaces the existing incurred loss model and is applicable to the measurement of credit losses on financial assets measured at amortized cost, available-for-sale debt securities and applies to certain off-balance sheet credit exposures. This ASU is effective for the Company in calendar year 2023. The Company is currently assessing the impact of the adoption of this ASU on its condensed consolidated financial statements. | 2. Summary of Significant Accounting Policies Basis of Presentation and Principles of Consolidation The accompanying consolidated financial statements are presented in conformity with accounting principles generally accepted in the United States (“U.S. GAAP”) and pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”). The consolidated financial statements include the accounts and operations of the Company and its wholly-owned subsidiaries. For consolidated entities that are less than wholly-owned, the third party’s holding of an equity interest is presented as Non-controlling interests in the Company’s consolidated balance sheets and consolidated statements of equity (deficit). The portion of net earnings attributable to the non-controlling interests is presented as Net income (loss) attributable to non-controlling interests in the Company’s consolidated statements of operations and comprehensive income (loss). All intercompany accounts and transactions have been eliminated upon consolidation. Pursuant to the Business Combination Agreement, the Business Combination was accounted for as a reverse recapitalization in accordance with U.S. GAAP (the “Reverse Recapitalization”). Under this method of accounting, dMY is treated as the acquired company and RSILP is treated as the acquirer for financial statement reporting purposes. Accordingly, for accounting purposes, the Reverse Recapitalization was treated as the equivalent of RSILP issuing stock for the net assets of dMY, accompanied by a recapitalization. RSILP was determined to be the accounting acquirer based on evaluation of the following facts and circumstances: · RSILP’s existing member’s, through their ownership of the Class V Common Stock, have the largest portion of the voting rights in the Company; · The Board of Directors of the Company (the “Board”) and management are primarily composed of individuals associated with RSILP; and · RSILP is the larger entity based on historical operating activity and has the larger employee base. Thus, the financial statements included in this report reflect (i) the historical operating results of RSILP prior to the Reverse Recapitalization; (ii) the combined results of the RSILP and dMY following the Business Combination; and (iii) the acquired assets and liabilities of dMY stated at historical cost, with no goodwill or other intangible assets recorded. Reclassifications Certain prior year amounts have been reclassified to conform to the current year presentation. Liquidity and Capital Resources Based on the net proceeds from the Business Combination (refer to Note 4) and the proceeds from warrant exercises resulting from the public warrant redemption (refer to Note 8) and future spend assumptions, the Company currently expects that its cash will be sufficient to fund its operating expenses and capital expenditure requirements for at least 12 months from the date of issuance of this report. The Company experienced positive operating cash flows of $16.2 million for the year ended December 31, 2020 and negative operating cash flows of $2.5 million for the year ended December 31, 2019. The Company has a working capital deficit as of December 31, 2020 totaling $106.5 million, mainly a result of the earnout interests liability, which was $351.0 million at December 31, 2020. The earnout interests liability pertains to certain shares and units held by directors of dMY and the Sellers that were subject to restrictions pending the achievement of certain earnout targets, which did not occur until January 2021 (refer to Notes 4 and 18). Although recorded as a current liability at December 31, 2020, the earnout interests liability was reclassed to equity upon occurrence of the triggering event in January 2021 and did not result in any cash settlement. That is, the earnout interest liability should not be included in any future cash flow assumptions as of December 31, 2020. Refer to Note 4 for additional discussion of the earnout interest liability. Use of Estimates The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates. Significant estimates and assumptions reflected in the consolidated financial statements relate to and include, but are not limited to, the valuation of share-based awards; the estimated useful lives of property and equipment and intangible assets; redemption rate assumptions associated with the loyalty program and other discretionary player bonuses; deferred revenue relating to our social gaming revenue stream; accrued expenses and other current liabilities; determination of the incremental borrowing rate to calculate operating lease liabilities; valuation of the earnout interests liability; valuation of the warrant liabilities; and deferred taxes and amounts associated with the Tax Receivable Agreement related to the Business Combination. Segment Reporting Operating segments are identified as components of an enterprise about which separate discrete financial information is available for evaluation by the chief operating decision maker in making decisions regarding resource allocation and assessing performance. The Company views its operations and manages its business in one operating segment. Cash and Cash Equivalents and Restricted Cash Cash and cash equivalents consist of highly liquid, unrestricted savings, checking and instant access internet banking accounts with original maturities of 90 days or less at acquisition. The Company maintains separate bank accounts to segregate cash that resides in players’ interactive gaming and sports betting accounts from cash used in operating activities. Due to certain regulatory requirements, cash amounts that reside in player’s interactive gaming and sports betting accounts at the end of the period are classified as restricted cash. The following table reconciles cash and cash equivalents and restricted cash in the balance sheet to the total shown on the statements of cash flows: December 31, 2020 2019 ($ in thousands) Cash and cash equivalents $ 255,622 $ 6,905 Restricted cash 6,443 3,638 Total cash, cash equivalents and restricted cash $ 262,065 $ 10,543 Players Receivables Players receivables consist of cash deposits from players that have not yet been received by the Company. Players receivables are stated at the amount that the Company expects to collect from players, generally via third-party payment processors. These receivables arise due to the timing difference between a player’s deposit and the Company’s receipt of that deposit from the payment processor. The amounts are generally outstanding for a short period of time. On a periodic basis, the Company evaluates its players receivable and establishes an allowance for doubtful accounts based on a specific review of the accounts as well as historical collection experience and current economic conditions. No allowance for doubtful accounts was recorded for the periods presented in these consolidated financial statements. Due from Affiliates Due from affiliates consists of amounts that are expected to be collected from certain affiliated land-based casino partners. In certain cases, the affiliate casino maintains the bank account that processes cash deposits and withdrawals for RSI customers. Accordingly, at any point in time, the Company will record a receivable from the affiliate, representing RSI total gaming revenue (with RSI customers) that was collected by the affiliate, less consideration payable to the affiliate for use of its license, which is offset by any consideration received from the affiliate based on the terms of the agreement. On a periodic basis, the Company evaluates the collectability of amounts due from affiliates and establishes an allowance for amounts not expected to be collected. No allowance was recorded for the periods presented in these consolidated financial statements. See Note 14 for disclosure on related parties. Property and Equipment, net Property and equipment are carried at cost, net of accumulated depreciation. Depreciation is computed utilizing the straight-line method over the estimated useful life of the asset. Leasehold improvements depreciation is computed over the shorter of the lease term or estimated useful life of the asset. Additions and improvements are capitalized, while repairs and maintenance are expensed as incurred. Useful lives of each asset class are as follows: Computer equipment and software 3-5 years Furniture and fixtures 4 years Leasehold improvements Lesser of the lease terms or the estimated useful lives of the improvements, generally 1-10 years License Fees, Net The Company incurs costs in connection with operating in certain regulated jurisdictions, including applying for licenses, compliance costs and the purchase of business licenses from strategic partners. The cost of purchasing business licenses, minimum royalty payments for strategic partners and subsequent renewals of business licenses are capitalized as an intangible asset and amortized over the estimated useful life of the asset using the straight-line method. RSI considers these minimum royalty payments to be an integral cost in connection with operating in certain jurisdictions. The minimum royalty payments are offset by the deferred royalty liability on the consolidated balance sheets. RSI’s access to operate in a particular market is often dependent upon the continued viability of that particular strategic partner in that market. The useful life is the period over which the asset is expected to contribute directly, or indirectly, to the Company’s cash flows. At least annually, the remaining useful life is evaluated. Impairment of Long-Lived Assets The Company’s long-lived assets consist of property and equipment, operating lease right-of-use assets and finite-lived intangible assets (i.e., license fees). The Company evaluates long-lived assets for indicators of impairment quarterly or when events or changes in circumstances indicate that their carrying amounts may not be recoverable. The factors that would be considered by management in performing this assessment include current operating results, trends and prospects, the manner in which the long-lived asset is used and the effects of obsolescence, demand, competition and other economic factors. If indicators of impairment are identified, the Company performs an undiscounted cash flow analysis of the long-lived assets. Asset groups are written down only to the extent that their carrying value is lower than their respective fair value. Fair values of the asset group are determined by discounting the cash flows at a rate that approximates the cost of capital of a market participant. The Company did not have any impairment of long-lived assets for the years ended December 31, 2020 and 2019. Players Liabilities The Company records liabilities for player account balances, which consist of player deposits, plus player winning bets, less player losing bets, less player withdrawals. Player liabilities also includes the expected future payout relating to unredeemed bonus store points and unused discretionary bonus incentives in the player’s account. The Company’s restricted cash and players receivables balance will equal or exceed the cash portion of the Company’s player liabilities account. Deferred Royalty The Company records liabilities for minimum royalty payments related to licensing and market access agreements. These liabilities are recorded on the balance sheet at the present value of future payments discounted using a rate that reflects the duration of the agreement. The deferred royalty liability is accreted through interest expense in the Company’s consolidated statements of operations and comprehensive income (loss). The Company records deferred royalty liabilities as either deferred royalty, short-term or deferred royalty, long-term based on the timing of future payments. Due to Affiliates Due to affiliates consists of amounts owed by the Company to certain of its related parties. Amounts due to affiliates may include payment for services provided to the Company by employees of the related party or reimbursement of amounts paid by the related party on the Company’s behalf. Any royalties due to the affiliated land-based casinos are netted against Affiliate Receivables to the extent a right of offset exists. See Note 14 for disclosure on related parties. Earnout Interests Liability Earnout interests represent a freestanding financial instrument classified as liabilities on the accompanying consolidated balance sheet as the Company determined that these financial instruments are not indexed to the Company’s own equity in accordance with ASC 815, Derivatives and Hedging . Earnout interests were initially recorded as fair value in the Business Combination and are adjusted to fair value at each reporting date with changes in fair value recorded in Change in fair value of earnout interests liability in the consolidated statement of operations and comprehensive income (loss). Warrant Liabilities As part of dMY’s initial public offering, dMY issued to third-party investors 23.0 million units, consisting of one share of Class A common stock of dMY and one-half of one warrant, at a price of $10.00 per unit. Each whole warrant entitled the holder to purchase one share of Class A common stock at an exercise price of $11.50 per share (the “Public Warrants”). Simultaneously with the dMY initial public offering, 6,600,000 private placement warrants were sold to the Sponsor (the “Private Placement Warrants”) and an additional 75,000 warrants were issued to the Sponsor upon the Closing in connection with converting certain working capital loans into warrants (the “Working Capital Warrants” and together with the Private Placement Warrants, the “Private Warrants” and the Private Warrants together with the Public Warrants, the “Warrants”)). Each Private Warrant allows the Sponsor to purchase one share of Class A Common Stock at $11.50 per share. Subsequent to the Business Combination, 11,500,000 Public Warrants and 6,675,000 Private Warrants remained outstanding as of December 31, 2020. The Private Warrants and the shares of Class A Common Stock issuable upon the exercise of the Private Warrants are not transferable, assignable or salable until after the completion of a Business Combination, subject to certain limited exceptions. Additionally, the Private Warrants are exercisable for cash or on a cashless basis, at the holder’s option, and are non-redeemable so long as they are held by the initial purchasers or their permitted transferees. If the Private Warrants are held by someone other than the initial purchasers or their permitted transferees, the Private Warrants will be redeemable by the Company and exercisable by such holders on the same basis as the Public Warrants. The Company evaluated the Warrants pursuant to ASC 815-40, and concluded that they do not meet the criteria to be classified in stockholders’ equity. Specifically, the exercise of these Warrants may be settled in cash upon the occurrence of a tender offer or exchange that involves 50% or more of our stockholders holding Class A Common Stock. Because not all of the stockholders need to participate in such tender offer or exchange to trigger the potential cash settlement and the Company does not control the occurrence of such an event, the Company concluded that the Warrants do not meet the conditions to be classified in equity. Because the Warrants meet the definition of a derivative under ASC 815-40, the Company records these Warrants as liabilities on its consolidated balance sheet at fair value as of each reporting date, with subsequent changes in their respective fair values recognized in its consolidated statement of operations and comprehensive income (loss). Concentrations of Credit Risk Financial instruments that potentially subject the Company to concentrations of credit risk consist primarily of operating cash and restricted cash. The Company maintains cash and restricted cash primarily across three financial institutions within separate bank accounts. Management believes the three financial institutions to be of a high credit quality, in amounts that exceed federally insured limits. The Company does not believe that it is subject to unusual credit risk beyond the normal credit risk associated with commercial banking relationships. Leases In February 2016, the FASB issued ASU 2016‑02, Leases (Topic 842) ("ASU 2016-02"). The Company adopted the new standard on January 1, 2020 using the modified retrospective approach. Under this guidance, arrangements meeting the definition of a lease are classified as operating or financing leases and are recorded on the consolidated balance sheet as both a right-of-use asset and a lease liability. The Company determines whether an arrangement is or contains a lease at contract inception. The lease classification evaluation begins at the lease commencement date. The lease term used in the evaluation includes the non-cancellable period for which the Company has the right to use the underlying asset, together with renewal option periods when the exercise of the renewal option is reasonably certain. For leases with an initial term greater than 12 months, a related lease liability is recorded on the balance sheet at the present value of future payments discounted at the estimated fully collateralized incremental borrowing rate (discount rate) corresponding with the lease term. In addition, a right-of-use asset is recorded as the initial amount of the lease liability, plus any lease payments made to the lessor before or at the lease commencement date and any initial direct costs incurred, less any tenant improvement allowance incentives received. Tenant incentives are amortized through the right-of-use asset as a reduction of rent expense over the lease term. The difference between the minimum rents paid and the straight-line rent is reflected within the associated right-of-use asset. Certain leases contain provisions that require variable payments consisting of common area maintenance costs (variable lease cost). Variable lease costs are expensed as incurred. Leases with an initial term of 12 months or less (short-term leases) are not recorded on the balance sheet. Short-term lease expense is recognized on a straight-line basis over the lease term. As the interest rate implicit in the lease is not readily determinable, the Company uses its incremental borrowing rate corresponding with the lease term. As the Company does not have any outstanding debt, this rate is determined based on prevailing market conditions and comparable company and credit analysis. The incremental borrowing rate is reassessed if there is a change to the lease term or if a modification occurs and it is not accounted for as a separate contract. Prior to January 1, 2020, the Company accounted for leases under ASC 840, Leases (Topic 840) , and recorded rent expense associated with its operating lease on a straight-line basis over the term of the lease. Revenue Recognition Revenue is recognized when control of the promised goods or services is transferred to the customer, in an amount that reflects the consideration the Company expects to be entitled to in exchange for those goods or services. The Company determines revenue recognition through the following steps: · Identify the contract with the customer · Identify the performance obligations in the contract · Determine the transaction price · Allocate the transaction price to the performance obligations in the contract · Recognize revenue when, or as, the company satisfies a performance obligation The Company’s revenue from contracts with customers consists of online casino, online sports betting, retail sports betting and social gaming. Online casino and online sports betting Online casino offerings typically include the full suite of games available in land-based casinos, such as blackjack, roulette and slot machines. For these offerings, the Company generates revenue through hold, or gross winnings, as customers play against the house. Online casino revenue is generated based on total player bets less amounts paid to players for winning bets, less other incentives awarded to players, plus or minus the change in the progressive jackpot reserve. Online sports betting involves a user placing a bet on the outcome of a sporting event, or a series of sporting events, with the chance to win a pre-determined amount, often referred to as fixed odds. Online sports betting revenue is generated by setting odds such that there is a built-in theoretical margin in each sports bet offered to its customers. Online sports betting revenue is generated based on total player bets less amounts paid to players for winning bets, less other incentives awarded to players, plus or minus the change in unsettled bets. The Company provides various incentives to promote customer engagement, many of which allow customers to place bets without using their own funds. For some incentive programs, benefits are provided to customers based only on past play and represent an option that grants the player a material right. Other benefits that are provided to customers are more discretionary in nature and may not be related to the customer’s level of play. Performance obligations related to online gaming and sports betting transactions include (1) servicing the player’s bet, which is fulfilled when the outcome of the bet is known and (2) transferring additional goods or services to a player for which the Company has received consideration, such as bonus store points. Bonus store points as well as discretionary bonus incentives, such as bonus dollars and free bets (collectively referred to herein as “player bonuses”) are recognized as a reduction to revenue upon issuance of the incentive and as revenue upon redemption by the player. Reductions to revenue include estimates for the standalone selling price of player bonuses and the percentage of player bonuses that are expected to be redeemed. The expected redemption percentage is based on historical redemption patterns and considers current information or trends. The estimated redemption rate is evaluated each reporting period. The Company does not believe that there is a reasonable likelihood that there will be a material change in the future estimates or assumptions used to calculate the estimated redemption rate. Adjustments to earnings resulting from revisions to management’s estimates of the redemption rates have been insignificant during the years ended December 31, 2020 and December 31, 2019. An increase or decrease in the estimated redemption rate of 5% would not have a material effect on consolidated financial statements for the year ended December 31, 2020. Progressive jackpots related to online casino jackpot games are accrued and charged to revenue at the time the obligation to pay the jackpot is established. The progressive jackpot liability is recorded in Accrued expenses and other current liabilities on the consolidated balance sheets. Retail sports betting The Company provides retail sports services to land-based casinos in exchange for a monthly commission based on the land-based casino’s retail sportsbook revenue. Services include ongoing management and oversight of the retail sportsbook, technical support for the land-based casino’s customers, customer support, risk management, advertising and promotion, and support for the third-party vendor’s sports betting equipment. The Company has a single performance obligation to provide retail sports services and records the revenue as services are performed and when the commission amounts are no longer constrained (i.e., the amount is known). Certain relationships with business partners provide the Company the ability to operate the retail sportsbook at the land-based casino. In this scenario, revenue is generated based on total player bets less amounts paid to players for winning bets, less other incentives awarded to players. Social gaming The Company provides a social gaming platform for players to enjoy free-to-play games that use virtual credits. While virtual credits are issued to players for free, some players may choose to purchase additional virtual credits through the Company’s virtual cashier. The Company has a single performance obligation associated with social gaming services, to provide social gaming services to players upon the redemption of virtual credits. Deferred revenue is recorded when players purchase virtual coins and revenue is recognized when the virtual coins are redeemed, and the Company’s performance obligation has been fulfilled. Certain costs to obtain or fulfill contracts Pursuant to the accounting guidance, certain costs to obtain or fulfill a contract with a customer must be capitalized, to the extent recoverable from the associated contract margin, and subsequently amortized as the products or services are delivered to the customer. These costs are capitalized as contract acquisition costs and are amortized over the period of benefit to the customer. For the Company, the period of benefit has been determined to be less than or equal to one year. As such, the Company applied the practical expedient and contract acquisition costs are expensed immediately. Customer contract costs that do not qualify for capitalization as contract fulfillment costs are expensed as incurred. Contract balances Contract assets and liabilities represent the differences in the timing of revenue recognition from the receipt of cash from the Company’s customers and billings. The Company currently does not have contractual terms that require it to satisfy or partially satisfy its performance obligations in advance of customer billings. Deferred revenue represents wagered amounts that relate to unsettled or pending outcomes, such as a future sports bet. The Company recognizes revenue once the outcome of the bet is settled and fixed. Deferred revenue relating to the Company’s social gaming services includes virtual coins purchased by players but not yet used. Deferred revenue also includes contract liabilities for the Company’s obligation to transfer additional goods or services to a player for which the Company has received consideration, such as bonus store points. The Company recognizes breakage on bonus store points proportionately as redemption occurs. Revenue recognized relating to breakage during the years ended December 31, 2020 and 2019 were not material to the consolidated financial statements. Deferred revenue is recorded in Players liabilities on the consolidated balance sheets. Principle versus agent considerations The Company evaluates the criteria outlined in ASC 606-10-55, Principal versus Agent Considerations , in determining whether it is appropriate to record the gross amount of revenues and related costs, or the net amount earned as commissions. When the Company is the principal in a transaction and controls the specific good or service before it is transferred to the customer, revenue is recorded gross; otherwise, revenue is recorded on a net basis. The Company controls the promised goods or services for online casino and sports betting transactions, retail sports betting transactions and social gaming services, and as a result records related revenue on a gross basis. For retail sports services, the Company does not control the promised goods or services and, therefore, records the net amount of revenue earned as a commission. See Note 11 for a disaggregation of the Company’s revenues. Costs of Revenue Costs of revenue consist primarily of (i) revenue share and market access fees, (ii) platform and content fees, (iii) gaming taxes, (iv) payment processing fees and chargebacks and (v) salaries and benefits of dedicated personnel. These costs are variable in nature and should correlate with the change in revenue. Advertising and Promotions Costs Advertising and promotion costs consist primarily of marketing the Company’s products and services via different channels, promotional activities, and the related costs incurred to acquire new customers that include salaries and benefits for dedicated personnel and are expensed as incurred. General Administration and Other General administration and other expenses consist primarily of administrative personnel costs, including salaries, bonuses and benefits, share-based compensation expenses, professional services related to legal, compliance and audit/consulting services, rent and other premises costs, and insurance. Share-Based Compensation The Company records share-based compensation in accordance with ASC 718, Compensation — Stock Compensation (“ASC 718”) and recognizes share-based compensation expense in the period in which a grantee is required to provide service, which is generally over the vesting period of the individual share-based payment award. Compensation expense for awards with performance conditions is not recognized until it is probable that the performance target will be achieved. Compensation expense for awards is recognized over the requisite service period on a straight-line basis. The Company accounts for forfeitures as they occur. The Company classifies unit awards as either an equity award or a liability award depending on whether the award contains certain repurchase provisions. Equity-classified awards are valued as of the grant date based upon the price of the underlying unit or share and a number of assumptions, including volatility, performance period, risk-free interest rate and expected dividends. Liability-classified awards are valued at fair value at each reporting date. See Note 10. Share-based payment awards which contain certain repurchase provisions were classified as liabilities in accordance with ASC 718. The Company elected to measure all liability-classified awards utilizing an option pricing method and recognizes the related expense within General administration and other expenses in the consolidated statements of operations and comprehensive income (loss). Income Taxes RSI Inc. is a corporation and, as a result, is subject to United States federal, state, and foreign income taxes. RSILP is treated as a partnership for United States federal income tax purposes and therefore does not pay United States federal income tax on its taxable income. Instead, the RSILP unitholders, including the Company, are liable for United States federal income tax on their respective shares of RSILP's taxable income reported on the unitholders' United States federal income tax returns. RSILP is liable for income taxes in those states not recognizing its status as a partnership for United States federal income tax purposes. The Company accounts for income taxes using the asset and liability method. Under this method, deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are calculated by applying existing tax laws and the rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in the year of the enacted rate change. The Company recognizes deferred tax assets to the extent the Company believes these assets are more-likely-than-not to be realized. In making such a determination, the Company considers all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax planning strategies and recent results of operations. The Company accounts for uncertainty in income taxes using a recognition and measurement threshold for tax positions taken or expected to be taken in a tax return, which are subject to examination by federal and state taxing authorities. The tax benefit from an uncertain tax position is recognized when it is more-likely-than-not that the position will be sustained upon examination by taxing authorities based on technical merits of the position. The amount of the tax benefit recognized is the largest amount of the be |
Restatement of Consolidated Fin
Restatement of Consolidated Financial Statements | 12 Months Ended |
Dec. 31, 2020 | |
Restatement of Consolidated Financial Statements | |
Restatement of Consolidated Financial Statements | 3.Restatement of Consolidated Financial Statements On May 7, 2021, the Company concluded that, because of a misapplication of the accounting guidance applicable to Public Warrants and Private Warrants acquired in connection with the Business Combination in December 2020, the Company’s previously issued consolidated financial statements as of and for the year ended December 31, 2020 should no longer be relied upon. As such, the Company is restating its consolidated financial statements as of and for the year ended December 31, 2020. The Public Warrants and Private Warrants subject to the misapplication of the applicable accounting guidance were originally issued as part of dMY’s initial public offering and in connection with the closing of the Business Combination. On April 12, 2021, the staff of the Securities and Exchange Commission (the “SEC Staff”) issued a public statement entitled “Staff Statement on Accounting and Reporting Considerations for Warrants issued by Special Purpose Acquisition Companies (“SPACs”)” (the “SEC Staff Statement”). In the SEC Staff Statement, the SEC Staff expressed its view that certain terms and conditions common to SPAC warrants may require the warrants to be classified as liabilities on the SPAC’s financial statements as opposed to equity. Since issuance in February 2020 and December 2020, the Company’s Public Warrants and Private Warrants, which were initially issued by dMY Technology Group, Inc. (“dMY”) and assumed by the Company with the consummation of the transactions contemplated by the Business Combination Agreement, were accounted for as equity within the Company’s previously reported balance sheet. The Company initially evaluated the accounting for its Public Warrants and Private Warrants and believed its positions to be appropriate at that time, and while the terms of the Public Warrants and Private Warrants as described in the warrant agreement governing the Warrants have not changed, as a result of the SEC Staff Statement, the Company has determined to classify its Warrants as liabilities, and will subsequently measure them at fair value through earnings pursuant to ASC 815-40. Therefore, the Company, in consultation with its Audit Committee, concluded that its previously issued financial statements as of and for the year ended December 31, 2020 should be restated because of a misapplication in the guidance around accounting for the Public Warrants and Private Warrants and should no longer be relied upon. The material terms of the Public Warrants and Private Warrants are more fully described in Note 8 –Warrant Liabilities. See revised Note 17 – Fair Value Measurement for the estimated fair value of the Public Warrants and Private Warrants and a discussion of the inputs used to estimate the fair value. Impact of the Restatement The impact of the restatement on the consolidated balance sheet, consolidated statement of operations and consolidated statement of cash flows as of and for the year ended December 31, 2020 is presented below. The restatement had no impact on net cash flows from operating, investing or financing activities. December 31, 2020 As Previously Restatement Reported Adjustment As Restated (In Thousands) Warrant liabilities $ — $ 170,109 $ 170,109 Total liabilities 405,780 170,109 575,889 Additional paid-in-capital 22,566 (40,968) (18,402) Accumulated deficit (45,146) 1,656 (43,490) Total stockholders’ deficit attributed to Rush Street Interactive, Inc. (22,467) (39,312) (61,779) Noncontrolling interests (74,753) (130,797) (205,550) Total deficit (97,220) (170,109) (267,329) For the Year Ended December 31, 2020 As Previously Restatement Reported Adjustment As Restated (In Thousands, Except Share and per Share Amounts) Revenue $ 278,500 $ — $ 278,500 Loss from operations (133,419) — (133,419) Change in fair value of warrant liabilities — 7,166 7,166 Total other income (expenses) (2,473) 7,166 4,693 Loss before income taxes (135,892) 7,166 (128,726) Income tax expense 2,919 — 2,919 Net loss (138,811) 7,166 (131,645) Net loss attributable to non-controlling interests (138,236) 5,510 (132,726) Net income (loss) attributable to Rush Street Interactive, Inc. (575) 1,656 1,081 Net income (loss) per common share attributable to Rush Street Interactive, Inc. – Basic (0.01) 0.02 Weighted-average common shares outstanding - Basic 43,579,704 43,579,704 Net loss per common share attributable to Rush Street Interactive, Inc. – Diluted (0.01) (0.01) Weighted-average common shares outstanding - Diluted 43,579,704 52,242,606 Comprehensive loss (138,287) 7,166 (131,121) Comprehensive loss attributable to non-controlling interests (137,712) 5,510 (132,202) Comprehensive income (loss) attributable to Rush Street Interactive, Inc. (575) 1,656 1,081 For the Year Ended December 31, 2020 As Previously Restatement Reported Adjustment As Restated (In Thousands) Statement of Cash Flows Net loss $ (138,811) $ 7,166 $ (131,645) Adjustment to reconcile net loss to net cash provided by (used in) operating activities 154,990 (7,166) 147,824 Net cash provided by (used in) operating activities 16,179 — 16,179 Net cash used in investing activities (6,243) — (6,243) Net cash provided by financing activities 241,071 — 241,071 Supplemental disclosure of noncash investing and financing activities: Warrant liabilities recognized in the Business Combination — Additionally, the historical quarterly dMY financial statements were not restated to reflect this change in accounting, as we believe that information is no longer relevant to investors. |
Business Combination
Business Combination | 12 Months Ended |
Dec. 31, 2020 | |
Business Combination | |
Business Combination | 4. Business Combination As further discussed in Note 1, on December 29, 2020, the Company consummated the Business Combination pursuant to the Business Combination Agreement. In connection with the consummation of the Business Combination, the following occurred: · The Company was reorganized into an Up-C structure, in which substantially all of the assets and business of the Company are held by RSILP and continue to operate through RSILP and its subsidiaries, and Rush Street Interactive, Inc.'s sole material assets are the equity interests of RSILP indirectly held by it. · The Company consummated the sale of 16,043,002 shares of Class A Common Stock for a purchase price of $10.00 per share (together, the “PIPE”) pursuant to certain subscription agreements dated as of July 27, 2020 for an aggregate price of $160.4 million. · The Company converted all outstanding shares of Class B common stock of the Company on a one-for-one basis and into an aggregate number of 5,750,000 shares of Class A Common Stock. · The Company, the Special Limited Partner, RSI GP, RSILP and the Sellers entered into the Second Amended and Restated Limited Partnership Agreement of RSILP (the “RSILP A&R LPA”), pursuant to which all Common A-1 Units, the Common A-2 Units, the Common B-1 Units and the Preferred Units of RSILP held by the Sellers were converted or exchanged into Class A Common Units of RSILP, the result of which all Sellers collectively hold a single class of RSILP Units. · The Company contributed approximately $239.8 million of cash to RSILP (the “Contribution Amount”), representing (a) the net amount held in the Company’s trust account following the redemption of 485 shares of Class A Common Stock originally sold in the Company’s initial public offering, less (b) $125.0 million, representing the aggregate amount of consideration paid to the Sellers in connection with their sale of 12,500,000 RSILP Units (such RSILP Units, the “Purchased RSILP Units”), plus (c) $160.4 million in aggregate proceeds from the PIPE, less (d) the aggregate amount of transaction expenses incurred by the parties to the Business Combination Agreement, in exchange for 32,292,517 Units (such RSI Units issued to dMY, the “Issued RSILP Units”) and certain rights under the Tax Receivable Agreement (as defined and discussed below). · The Sellers transferred to the Special Limited Partner the Purchased RSILP Units for cash consideration of $125.0 million. · The Sellers retained an aggregate of 160,000,000 RSILP Units (the “Retained RSILP Units”) (including 15,000,000 Earnout Interests (as defined below)). · The Company issued to RSILP 160,000,000 shares of newly issued Class V Common Stock, par value $0.0001 per share, (the “Class V Common Stock”), representing the same number of Retained RSILP Units (including 15,000,000 Earnout Interests), which shares were immediately distributed by RSILP to the Sellers. · Pursuant to the terms of the Business Combination Agreement: (i) 1,212,813 shares of Class A Common Stock held by the independent directors of DMY, consisting of Darla Anderson, Francesca Luthi and Charles E. Wert, together with the Sponsor (collectively, the “Founder Holders”) that formerly constituted shares of Class B common stock of the Company held by the Founder Holders, (ii) 1,212,813 Issued RSILP Units issued to the Company in connection with the Business Combination, (iii) 15,000,000 Retained RSILP Units held by the Sellers, and (iv) 15,000,000 shares of Class V Common Stock issued to the Sellers by the Company in connection with the Business Combination (collectively, the “Earnout Interests”), became subject to certain restrictions on transfer and voting and potential forfeiture pending the achievement (if any) of certain earnout targets (as further discussed below). · At the Closing, the Company, the Special Limited Partner, RSILP, the Sellers and the Sellers’ Representative entered into a Tax Receivable Agreement (the “Tax Receivable Agreement”) pursuant to which, among other things, the Sellers are entitled to payment by the Special Limited Partner of 85% of the net income tax savings realized by the Company and its consolidated subsidiaries (including the Special Limited Partner) as a result of the increases in tax basis and certain other tax benefits related to the transactions contemplated by the Business Combination Agreement and the exchange by the Sellers of their Retained RSILP Units for Class A Common Stock (or cash at the Company’s option) pursuant to the RSILP A&R LPA and tax benefits related to entering into the Tax Receivable Agreement, including tax benefits attributable to payments under the Tax Receivable Agreement (as more fully described in the Tax Receivable Agreement). The Tax Receivable Agreement will remain in effect until all such tax benefits have been utilized or expired unless the Special Limited Partner exercises its rights to terminate the Tax Receivable Agreement for an amount representing the present value of anticipated future tax benefits under the Tax Receivable Agreement or certain other acceleration events occur. Beginning on the six month anniversary of the Closing, the Sellers will have the right to exchange Retained RSILP Units for either one share of Class A Common Stock or, at the election of RSI GP in its capacity as the general partner of RSILP, depending on, among other things, the availability of cash at RSILP after first considering the cash necessary at RSILP to fund RSILP’s outstanding and anticipated operating expenses, debt service costs and declared dividends (in each case, if any), license fees and expenses, tax obligations and capital for existing and continued growth in new jurisdictions, the cash equivalent of the market value of one share of Class A Common Stock, pursuant to the terms and conditions RSILP A&R LPA. For each Retained RSILP Unit so exchanged, one share of the Class V Common Stock will be canceled by the Company. After the Closing, Neil G. Bluhm and Gregory A. Carlin and their respective trusts and entities controlled by them (collectively, the “Controlling Holders”) own a majority of the Company’s outstanding common stock and, therefore, control a majority of the voting power of RSI’s outstanding common stock. Furthermore, the Controlling Holders entered into a voting agreement prior to the Closing, pursuant to which they agreed to vote together on certain matters presented to the Company’s stockholders for so long as the voting agreement is in effect. As a result, RSI is a “controlled company” within the meaning of the corporate governance standards of the New York Stock Exchange (the “NYSE”), which status permits the Company to elect not to comply with certain corporate governance requirements as further described herein. The following table reconciles the elements of the Business Combination to the consolidated statements of cash flows and the consolidated statements of changes in equity (deficit) for the year ended December 31, 2020: Business ($ in thousands) Combination Cash- dMY trust and cash, net of redemptions $ 230,800 Cash- PIPE financing 160,430 Less: cash consideration paid to purchased RSI units (125,000) Less: transaction costs and advisory fees (26,467) Net proceeds from the Business Combination $ 239,763 Less: Initial fair value of Warrants recognized in the Business Combination (181,271) Less: Initial fair value of earnout interests liability recognized in the Business Combination (348,710) Add: Transaction costs allocated to Warrants (1) 3,996 Net adjustment to total equity from the Business Combination $ (286,222) (1) Transaction costs allocated to Warrants are recorded to Change in Fair Value of Warrant Liabilities in the Company’s consolidated statements of operations and comprehensive income (loss). The number of shares of common stock issued immediately following the consummation of the Business Combination: Number of Shares Common stock, outstanding prior to Business Combination 23,000,000 Less: redemption of dMY shares (485) Common stock of dMY 22,999,515 dMY sponsor shares (1) 5,750,000 Shares issued in PIPE financing 16,043,002 Class A shares issued in the Business Combination 44,792,517 Class V shares issued to holders of retained RSI units (2)(3) 160,000,000 Total shares of common stock issued in the Business Combination 204,792,517 (1) Includes 1,212,813 shares of Class A Common Stock placed into escrow subject to the achievement of certain earnout targets pursuant to the Business Combination Agreement. (2) Includes 15,000,000 shares of Class V Common Stock placed into escrow subject to the achievement of certain earnout targets pursuant to the Business Combination Agreement. (3) The Class V Common Stock entitle its holder to one vote per share but not any rights to dividends or distributions. Each share of Class V Common Stock is issued to the Sellers for each Retained RSILP Unit retained by the Seller. The Earnout Interests, as described above, were subject to certain restrictions on transfer and voting and potential forfeiture pending the achievement of certain earnout targets. The earnout targets include (a) a change of control within three years of the Closing, (b) achieving certain revenue targets for the 2021 year, and (c) achieving certain volume weighted average share prices (“VWAPs”) within three years of the Closing. With respect to the revenue targets for the 2021 year, the percentage of Earnout Interests no longer subject to the restrictions, starting at 25% and ending at 100%, is dependent on achieving revenue equal to $270 million up to $300 million, respectively. With respect to the earnout targets related to VWAPs, the share price must be equal to or exceed the target price for 10 trading days of any 20 consecutive trading day period. Pursuant to the Business Combination Agreement, a VWAP of $12.00 and $14.00 would result in 50% and 100%, respectively, of the Earnout Interests being no longer subject to the restrictions. During January 2021, the Earnout Interests were fully earned and no longer subject to the applicable restrictions on transfer and voting because the Volume Weighted Average Share Price exceeded $14.00 per share for 10 trading days within a 20 consecutive trading day period following the Closing. As a result, the earnout interests liability was reclassed to equity resulting in 1,212,813 additional shares of Class A Common Stock held by the Founder Holders and 15,000,000 additional shares of Class V Common Stock and RSILP Units issued to the Sellers (i.e., non-controlling interests). |
Property and Equipment
Property and Equipment | 12 Months Ended |
Dec. 31, 2020 | |
Property and Equipment | |
Property and Equipment | 5. Property and Equipment Property and equipment, net consists of the following: Useful Life December 31, ($ in thousands) (Years) 2020 2019 Computer equipment and software 3-5 $ 3,412 $ 2,247 Furniture 4 329 — Leasehold improvements 4 472 — Construction in progress N/A — 40 Total property and equipment 4,213 2,287 Less: accumulated depreciation (2,197) (1,706) Property and equipment, net $ 2,016 $ 581 The Company recorded depreciation expense on property and equipment of $0.5 million and $0.1 million for the years ended December 31, 2020 and 2019, respectively. |
License Fees, Net
License Fees, Net | 3 Months Ended | 12 Months Ended |
Mar. 31, 2021 | Dec. 31, 2020 | |
License Fees, Net | ||
License Fees, Net | 4. Intangible Assets, Net The Company has the following intangible assets, net as of March 31, 2021 and December 31, 2020: Weighted Average Remaining Gross Amortization Carrying Accumulated ($in thousands) Period Amount Amortization Net License Fees March 31, 2021 7.86 years $ 14,675 $ (3,955) $ 10,720 December 31, 2020 8.03 years $ 13,225 $ (3,475) $ 9,750 Internally Developed Software March 31, 2021 2.95 years $ 909 $ (17) $ 892 December 31, 2020 — — — — Amortization expense was $0.5 million and $0.4 million for the three months ended March 31, 2021 and 2020, respectively. | 6. License Fees, Net The table below provides a summary of the license fees as of December 31, 2020 and 2019, respectively: Weighted Average Remaining Gross Amortization Period Carrying Accumulated ($ in thousands) (years) Amount Amortization Net December 31, 2020 8.03 $ 13,225 $ (3,475) $ 9,750 December 31, 2019 8.82 $ 8,854 $ (1,897) $ 6,957 The Company recorded amortization expense on license fees of $1.6 million and $1.0 million for the years ended December 31, 2020 and 2019, respectively. At December 31, 2020, estimated future amortization of license fees is as follows ($ in thousands): ($ in thousands) Year ended December 31, 2021 $ 1,614 Year ended December 31, 2022 1,468 Year ended December 31, 2023 1,467 Year ended December 31, 2024 1,080 Year ended December 31, 2025 977 Thereafter 3,144 Total $ 9,750 |
Accrued Expenses and Other Cu_4
Accrued Expenses and Other Current Liabilities | 3 Months Ended | 12 Months Ended |
Mar. 31, 2021 | Dec. 31, 2020 | |
Accrued Expenses and Other Current Liabilities | ||
Accrued Expenses and Other Current Liabilities | 5. Accrued Expenses and Other Current Liabilities The Company has the following accrued expenses and other current liabilities as of March 31, 2021 and December 31, 2020: March 31, December 31, ($in thousands) 2021 2020 Accrued compensation and related expenses $ 2,735 $ 1,948 Accrued operating expenses 9,508 7,006 Accrued marketing expenses 19,942 12,093 Jackpot liability 1,052 721 Income tax payable 2,674 1,983 Other 1,930 2,244 Total accrued expenses and other current liabilities $ 37,841 $ 25,995 | 7. Accrued Expenses and Other Current Liabilities The table below provides a summary of the accrued expenses and other current liabilities at December 31, 2020 and 2019, respectively: December 31, 2020 2019 ($ in thousands) Accrued compensation and related expenses $ 2,821 $ 530 Accrued operating expenses 7,006 3,422 Accrued marketing expenses 12,093 5,396 Income tax payable 1,983 13 Other 2,092 309 Total accrued expenses and other current liabilities $ 25,995 $ 9,670 |
Warrant Liabilities_2
Warrant Liabilities | 3 Months Ended | 12 Months Ended |
Mar. 31, 2021 | Dec. 31, 2020 | |
Warrant Liabilities | ||
Warrant Liabilities | 6. Warrant Liabilities As part of dMY’s initial public offering, dMY issued to third-party investors 23.0 million units, consisting of one share of Class A common stock of dMY (“Class A Common Stock”) and one-half of one warrant, at a price of $10.00 per unit. Each whole warrant entitled the holder to purchase one share of Class A Common Stock at an exercise price of $11.50 per share (the “Public Warrants”). Simultaneously with the dMY initial public offering, 6,600,000 private placement warrants were sold to the Sponsor (the “Private Placement Warrants”) and an additional 75,000 warrants were issued to the Sponsor upon the Closing in connection with converting certain working capital loans into warrants (the “Working Capital Warrants” and together with the Private Placement Warrants, the “Private Warrants” and the Private Warrants together with the Public Warrants, the “Warrants”). Each Private Warrant allows the Sponsor to purchase one share of Class A Common Stock at $11.50 per share. The Company classified the Warrants as derivative liabilities on its consolidated balance sheet at fair value as of each reporting date, with subsequent changes in their respective fair values recognized in its consolidated statement of operations and comprehensive loss. Public Warrants On February 22, 2021, the Company announced the redemption of all the Company’s Public Warrants, which were exercisable for an aggregate of approximately 11.5 million shares of Class A Common Stock at a price of $11.50 per share. During March 2021, 11,442,389 Public Warrants were exercised at a price of $11.50 per share, resulting in cash proceeds of approximately $131.6 million (of which $0.1 million was not received until April 2021) and the issuance of 11,442,389 shares of Class A Common Stock. None of the Public Warrants remain outstanding as of March 31, 2021. The Company determined the fair value of its Public Warrants based on the publicly listed trading price of such warrants as of the valuation date. Accordingly, the Public Warrants are classified as Level 1 financial instruments. The aggregate fair value of the Public Warrants on the dates of exercise throughout March 2021 was $77.5 million. The fair value of the Public Warrants was $88.1 million as of December 31, 2020. Private Warrants On March 26, 2021, the Private Warrants were exercised in full on a cashless basis, resulting in the issuance of 2,571,808 shares of Class A Common Stock. None of the Private Warrants remain outstanding as of March 31, 2021. The estimated fair value of the Private Warrants was determined with Level 3 inputs using the Black-Scholes model. The significant inputs and assumptions in this method are the stock price, exercise price, volatility, risk-free rate, and term or maturity. The underlying stock price input is the closing stock price as of each valuation date and the exercise price is the price as stated in the warrant agreement. The volatility input was determined using the historical volatility of comparable publicly traded companies which operate in a similar industry or compete directly against the Company. Volatility for each comparable publicly traded company is calculated as the annualized standard deviation of daily continuously compounded returns. The Black-Scholes analysis is performed in a risk-neutral framework, which requires a risk-free rate assumption based upon constant-maturity treasury yields, which are interpolated based on the remaining term of the Private Warrants as of each valuation date. The term/maturity is the duration between each valuation date and the maturity date, which is five years following the Closing of the Business Combination, or December 29, 2025. The following table provides quantitative information regarding Level 3 fair value measurements inputs at their measurement dates: March 26, 2021 December 31, 2020 Exercise price $ 11.50 $ 11.50 Stock price $ 15.96 $ 22.76 Volatility 42.6 % 41.4 % Term (years) 4.77 5.0 Risk-free interest rate 0.76 % 0.37 % The fair value of the Private Warrants was $50.8 million and $82.0 million as of March 26, 2021 and December 31, 2020, respectively. The Company recorded $41.8 million to Change in fair value of warrant liabilities on the Company’s condensed consolidated statement of operations and comprehensive loss, representing the change in fair value of the Public Warrants and Private Warrants from December 31, 2020 through the dates of exercise. | 8. Warrant Liabilities As part of dMY’s initial public offering, dMY issued to third-party investors 23.0 million units, consisting of one share of Class A common stock of dMY and one-half of one Public Warrant, at a price of $10.00 per unit. Each whole Public Warrant entitled the holder to purchase one share of Class A Common Stock at an exercise price of $11.50 per share. Simultaneously with the dMY initial public offering, 6,600,000 Private Placement Warrants were sold to the Sponsor and an additional 75,000 Working Capital Warrants were issued to the Sponsor upon the Closing in connection with converting certain working capital loans into warrants. Each Private Warrant allows the Sponsor to purchase one share of Class A Common Stock at $11.50 per share. Subsequent to the Business Combination, 11,500,000 Public Warrants and 6,675,000 Private Warrants remained outstanding as of December 31, 2020. The Private Warrants and the shares of Class A Common Stock issuable upon the exercise of the Private Warrants are not transferable, assignable or salable until after the completion of a Business Combination, subject to certain limited exceptions. Additionally, the Private Warrants are exercisable for cash or on a cashless basis, at the holder’s option, and are non-redeemable so long as they are held by the initial purchasers or their permitted transferees. If the Private Warrants are held by someone other than the initial purchasers or their permitted transferees, the Private Warrants will be redeemable by the Company and exercisable by such holders on the same basis as the Public Warrants. The Company classified the Warrants pursuant to ASC 815-40 as derivative liabilities with subsequent changes in their respective fair values recognized in its consolidated statement of operations and comprehensive income (loss) at each reporting date. At December 31, 2020, approximately 18,175,000 Warrants were outstanding. As of the date of this amended report, none of the Public Warrants or Private Warrants remain outstanding. See Note 18 for additional information. |
Equity_2
Equity | 3 Months Ended | 12 Months Ended |
Mar. 31, 2021 | Dec. 31, 2020 | |
Equity | ||
Equity | 8. Equity Non-Controlling Interest The non-controlling interest represents the RSLIP Units held by holders other than the Company. As of December 31, 2020, the non-controlling interests owned 76.9% of the RSILP Units outstanding (which excluded the earnout interests that did not vest until January 2021). On January 13, 2021, the non-controlling interests increased to 78.1% when the earnout interests were fully earned and no longer subject to the applicable restrictions on transfer and voting. The non-controlling interests ownership decreased during March 2021, reflecting the additional issuance of Class A Common Stock in connection with the exercise of the Warrants and the share-based equity grant (see Note 9 for discussion of share-based compensation). As of March 31, 2021, the non-controlling interests owned 73.0% of the RSILP Units outstanding. Treasury Stock During the three months ended March 31, 2021, the Company repurchased 218,589 shares of its Class A Common Stock at an average price of $15.85 and a total cost of $3.5 million. The repurchased shares are considered issued but not outstanding. | 9. Equity RSI LLC was formed on March 5, 2012 as a Delaware limited liability company. The founding members contributed $27.0 million to RSI LLC prior to 2019 and an additional $14.5 million during 2019. On December 19, 2019, the members of RSI LLC entered into the Agreement of Limited Partnership (the “LP Agreement”) with the Sellers’ Representative to form RSILP. As part of the LP Agreement to become limited partners of RSILP, the members contributed all of their member interests in RSI LLC in exchange for Preferred Units and Common A-1 Units of RSILP (the “RSI LLC Recapitalization"). After the formation of RSILP, employees and affiliated individuals purchased additional Preferred Units and Common A-1 Units of RSILP for approximately $1.0 million. In addition, during the fourth quarter of 2019, RSILP issued profits interests in the form of Common A-2 Units to a significant unitholder, which were classified as equity awards and fully vested on the date of grant. Refer to Note 10 for additional information related to share-based compensation. During 2020, certain limited partners contributed a total of $6.5 million resulting in the issuance of additional Preferred Units and Common A-1 Units of RSILP. In December 2020, RSILP approved a distribution to each limited partner approximating each partner’s share of the estimated tax liability for the year ended December 31, 2020. The total amount distributed to the limited partners was $5.2 million. On December 29, 2020, in contemplation of the Business Combination, RSILP’s outstanding equity interests (including Preferred Units, Common A-1 Units and Common A-2 Units) and vested share-based liability awards (i.e., Common B-1 Units) were converted to 172.5 million Class A Common Units of RSILP. In connection with the Business Combination, 12.5 million Class A Common Units of RSILP (the Purchase RSILP Units) were transferred to the Special Limited Partner for cash consideration of $125.0 million In connection with the Business Combination, the Company’s previously reported Members’ Deficit and Preferred Units balances as of December 31, 2018, the earliest period presented, have been adjusted for the retrospective application of the RSI LLC Recapitalization and the Reverse Recapitalization. The total amount of the Company’s authorized capital stock consists of 951,000,000 shares, consisting of (i) 1,000,000 shares of preferred stock, par value $0.0001 per share (“Preferred Stock”), (ii) 750,000,000 shares of Class A Common Stock, and (iii) 200,000,000 shares of Class V Common Stock (together with the Class A Common Stock, the “Common Stock”). As of December 31, 2020, there were 44,792,517 shares of Class A Common Stock outstanding (inclusive of 1,212,813 shares relating to earnout interests) and 160,000,000 shares of Class V Common Stock outstanding (inclusive of 15,000,000 shares relating to earnout interests). Voting Rights Each holder of record of Common Stock, as such, shall be entitled to one (1) vote for each share of Common Stock held of record by such holder on all matters on which stockholders generally are entitled to vote or holders of Common Stock as a separate class are entitled to vote, including the election or removal of directors (whether voting separately as a class or together with one or more classes of the Company’s capital stock); provided, however, that to the fullest extent permitted by law, holders of Common Stock, as such, shall have no voting power with respect to, and shall not be entitled to vote on, any amendment to the Second A&R Certificate of Incorporation of the Company (including any certificate of designations relating to any series of Preferred Stock) that relates solely to the terms of one or more outstanding series of Preferred Stock if the holders of such affected series are entitled, either separately or together with the holders of one or more other such series, to vote thereon pursuant to the Second A&R Certificate of Incorporation of the Company (including any certificate of designations relating to any series of Preferred Stock) or pursuant to the Delaware General Corporation Law. The holders of Class A Common Stock and Class V Common Stock having the right to vote in respect of such Common Stock shall vote together as a single class (or, if the holders of one or more series of Preferred Stock are entitled to vote together with the holders of Common Stock having the right to vote in respect of such Common Stock, as a single class with the holders of such other series of Preferred Stock) on all matters submitted to a vote of the stockholders having voting rights generally. Dividend Rights Subject to applicable law and the rights, if any, of the holders of any outstanding series of Preferred Stock or any class or series of stock having a preference over or the right to participate with the Class A Common Stock with respect to the payment of dividends and other distributions in cash, stock of any corporation or property of the Company, the holders of Class A Common Stock shall be entitled to receive ratably such dividends and other distributions as may from time to time be declared by the Board in its discretion out of the assets of the Company that are by law available therefor at such times and in such amounts as the Board in its discretion shall determine. Dividends and other distributions shall not be declared or paid on the Class V Common Stock. Rights Upon Liquidation In the event of any voluntary or involuntary liquidation, dissolution or winding up of the affairs of the Company, after payment or provision for payment of the debts and other liabilities of the Company and of the preferential and other amounts, if any, to which the holders of Preferred Stock or any class or series of stock having a preference over the Class A Common Stock as to distributions upon dissolution or liquidation or winding up shall be entitled, the holders of all outstanding shares of Class A Common Stock shall be entitled to receive the remaining assets of the Company available for distribution ratably in proportion to the number of shares held by each such stockholder. The holders of shares of Class V Common Stock shall not be entitled to receive any assets of the Company in the event of any voluntary or involuntary liquidation, dissolution or winding up of the affairs of the Company. Cancellation of Class V Common Stock In the event that any outstanding share of Class V Common Stock shall cease to be held directly or indirectly by the holder of the corresponding RSILP Unit (as defined in the RSILP A&R LPA), as set forth in the books and records of RSILP, including by virtue of any divestiture by such holder of such corresponding RSILP Unit, such share of Class V Common Stock shall automatically and without further action on the part of the Company or any holder of Class V Common Stock be transferred to the Company and cancelled for no consideration. The Company shall not issue additional shares of Class V Common Stock after the Closing of the transactions contemplated by the Business Combination, other than in connection with the valid issuance of RSILP Units in accordance with the RSILP A&R LPA. Other Rights If the Company at any time combines or subdivides (by any stock split, stock dividend, recapitalization, reorganization, merger, amendment of the Second A&R Certificate of Incorporation of the Company, scheme, arrangement or otherwise) the number of shares of Class A Common Stock into a greater or lesser number of shares, the shares of Class V Common Stock outstanding immediately prior to such subdivision shall be proportionately similarly combined or subdivided such that the ratio of shares of outstanding Class V Common Stock to shares of outstanding Class A Common Stock immediately prior to such subdivision shall be maintained immediately after such combination or subdivision. Any such adjustment shall become effective at the close of business on the date the combination or subdivision becomes effective. Preferred Stock The Board has the authority to issue shares of preferred stock at any time and from time to time, to provide, out of the unissued shares of Preferred Stock, for one or more series of Preferred Stock and, with respect to each such series, to fix the number of shares constituting such series and the designation of such series, the voting powers (if any) of the shares of such series, and the powers, preferences and relative, participating, optional or other special rights, if any, and any qualifications, limitations or restrictions thereof, of the shares of such series and to cause to be filed with the Secretary of State of the State of Delaware a certificate of designations with respect thereto. The powers, preferences and relative, participating, optional and other special rights of each series of Preferred Stock, and the qualifications, limitations or restrictions thereof, if any, may differ from those of any and all other series at any time outstanding. At December 31, 2020, there were no shares of preferred stock outstanding. Non-Controlling Interest The non-controlling interest represents the RSLIP Units held by holders other than the Company. As of December 31, 2020, the non-controlling interests owned 76.9% of the RSILP Units outstanding (which excludes the earnout interests that did not vest until January 2021). The non-controlling interests’ ownership percentage can fluctuate over time as RSILP earnout interests vest and as the Sellers elect to exchange RSILP Units for Class A Common Stock. The Company has consolidated the financial position and results of operations of RSILP and reflected the proportionate interest held by the Sellers as non-controlling interest. |
Share-Based Compensation_2
Share-Based Compensation | 3 Months Ended | 12 Months Ended |
Mar. 31, 2021 | Dec. 31, 2020 | |
Share-Based Compensation | ||
Share-Based Compensation | 9. Share-Based Compensation Incentive Plan The Company adopted the Rush Street Interactive, Inc. 2020 Omnibus Equity Incentive Plan, as amended from time to time (the “2020 Plan”), to attract, retain and incentivize employees, consultants and independent directors who will contribute to the success of the Company. Awards that may be granted under the 2020 Plan include incentive stock options, non-qualified stock options, stock appreciation rights, restricted awards, performance share awards, cash awards and other equity-based awards. There is an aggregate of 13.4 million shares of Class A Common Stock reserved under the 2020 Plan, which may consist of authorized and unissued shares, treasury shares or shares reacquired by the Company. The 2020 Plan will terminate on December 29, 2030. Restricted stock unit (“RSU”) activity for the three months ended March 31, 2021 is as follows: Weighted average Number of units grant price Unvested balance at December 31, 2020 — $ — Granted 3,647,504 15.85 Vested (719,479) 15.85 Unvested balance at March 31, 2021 2,928,025 $ 15.85 The aggregate fair value of the RSUs granted was approximately $57.8 million. As of March 31, 2021, the Company had unrecognized stock-based compensation expense related to RSUs of approximately $46.2 million, which is expected to be recognized over the remaining weighted-average vesting period of 3.74 years. During the three-month period ended March 31, 2020, approximately $13.5 million was recognized as share-based compensation expense related to the profit interests granted by RSILP prior to the Business Combination. Share-based compensation expense for the three months ended March 31, 2021 and 2020 is as follows: Three months ended March 31, ($in thousands) 2021 2020 Costs of revenue $ 915 $ — Advertising and promotions 1,698 — General administration and other 8,963 13,490 Total share-based compensation expense $ 11,576 $ 13,490 | 10. Share-Based Compensation Incentive Plan The Company created the Rush Street Interactive, Inc. 2020 Omnibus Equity Incentive Plan, as amended from time to time (the “2020 Plan”), to attract, retain and incentivize employees, consultants and independent directors that will contribute to the success of the Company. Awards that may be granted under the 2020 Plan include incentive stock options, non-qualified stock options, stock appreciation rights, restricted awards, performance share awards, cash awards and other equity-based awards. The aggregate number of shares reserved under the 2020 Plan is approximately 13.4 million shares of Class A Common Stock and may consist of authorized and unissued shares, treasury shares or shares reacquired by the Company. The 2020 Plan terminates on December 29, 2030. As of December 31, 2020, no awards had been granted pursuant to the 2020 Plan. Profit Interests Prior to the Business Combination, RSILP granted Common A-2 Units and Common B-1 Units to a significant unit holder and employees, respectively, that were designated as profit interests. Both issuances are accounted for under ASC 718. As part of the Business Combination, the remaining unvested Common B-1 Units immediately vested, and all of the Common A-2 and Common B-1 Units were exchanged for Class A Common Units in RSILP (see Note 9). Common A‑2 Units RSILP issued profits interests in the form of 414,894 and 2,714,850 Common A-2 Units to a significant unit holder during the years ended December 31, 2020 and 2019, respectively, with a participation threshold of $0. The Common A-2 Units were fully vested on the date of grant. The Common A-2 Units were classified as equity awards, and equity-based compensation expense was based on the grant date fair value of the awards, determined using the Black-Scholes-Merton pricing model and the assumptions noted in the table below. Common B‑1 Units RSILP issued profit interests in the form of 683,889 and 4,475,029 Common B-1 Units to certain employees during the years ended December 31, 2020 and 2019, respectively, with a participation threshold calculated by the total unreturned preferred unit capital plus a 10% preferred return to preferred capital contributed. Holders of Common B-1 Units were entitled to share in distributions after defined distributions have been made to Preferred Unit holders and Common A-2 Unit holders. The Common B-1 Units were fully vested as of December 29, 2020, the date of the Business Combination. Because the Put Price is a negotiated amount and not at fair value, the Common B-1 Units were liability-classified and revalued each period based on their current fair value with compensation costs recognized over the service period. Upon exchange of the Class B-1 Units for Class A Common Units in the Reverse Recapitalization, the share-based liability associated with Class B-1 Units was settled and the fair value of the share-based liability was reclassified to equity. The fair value per Common B-1 Unit, determined using the Black-Scholes-Merton pricing model and the assumptions noted in the table below, was $29.15 and $1.84 as of December 29, 2020 and December 31, 2019, respectively. The summary of B‑1 Units’ activity is as follows: Number of Units Unvested balance at December 31, 2018 — Granted 4,475,029 Vested (3,952,943) Unvested balance at December 31, 2019 522,086 Granted 683,889 Vested (1,205,975) Unvested balance at December 31, 2020 — The fair value for both the Common A‑2 Units and the Common B‑1 Units was determined using the Black-Scholes-Merton pricing model with the following assumptions: December 29, December 31, 2020 2019 Dividend yield — — Volatility factor 45 % 45 % Risk-free interest rate 0.12 % 1.69 % Time to liquidity (in years) — 5.0 Lack of marketability discount % 33.0 % The equity price per unit was based on an independent valuation of RSILP. The independent valuation estimated the equity value, which was then allocated to each unit class using the Black-Scholes-Merton pricing model. The respective unit class values for Common A-2 and B-1 Units were divided by the Common A-2 Units outstanding and Common B-1 Units outstanding, respectively, at the date of grant. The expected life of profit interests awards granted during the period presented was determined based on a permitted simplified method, which is based on the vesting period and contractual term for each tranche of awards. The risk-free rate for periods within the contractual life of the profit interest award is based on an extrapolated 5-year U.S. Treasury bond rate in effect at the time of grant given the expected time to liquidity. RSILP utilized a weighted rate for expected volatility based on a representative peer group of comparable public companies. The dividend yield was set at zero as the underlying security does not pay a dividend. The protective put method was used to estimate the discount for lack of marketability inherent to the awards due to the lack of liquidity associated with the restrictions on the Common A‑2 Units and Common B‑1 Units. During the years ended December 31, 2020 and 2019, approximately $1.7 million and $6.1 million, respectively, was recognized as share-based compensation expense related to the Common A‑2 Units. During the years ended December 31, 2020 and 2019, approximately $143.0 million and $7.3 million, respectively, was recognized as share-based compensation expense related to the Common B‑1 Units. |
Revenue Recognition_2
Revenue Recognition | 3 Months Ended | 12 Months Ended |
Mar. 31, 2021 | Dec. 31, 2020 | |
Revenue Recognition | ||
Revenue Recognition | 3. Revenue Recognition The Company’s revenue from contracts with customers consists of online casino, online sports betting, retail sports betting and social gaming. Online casino and online sports betting Online casino offerings typically include the full suite of games available in land-based casinos, such as blackjack, roulette and slot machines. For these offerings, the Company generates revenue through hold, or gross winnings, as customers play against the house. Online casino revenue is generated based on total player bets less amounts paid to players for winning bets, less other incentives awarded to players, plus or minus the change in the progressive jackpot reserve. Online sports betting involves a user placing a bet on the outcome of a sporting event, or a series of sporting events, with the chance to win a pre-determined amount, often referred to as fixed odds. Online sports betting revenue is generated by setting odds such that there is a built-in theoretical margin in each sports bet offered to its customers. Online sports betting revenue is generated based on total player bets less amounts paid to players for winning bets, less other incentives awarded to players, plus or minus the change in unsettled bets. Retail sports betting The Company provides retail sports services to land-based casinos in exchange for a monthly commission based on the land-based casino’s retail sportsbook revenue. Services include ongoing management and oversight of the retail sportsbook, technical support for the land-based casino’s customers, risk management, advertising and promotion, and support for the third-party vendor’s sports betting equipment. The Company has a single performance obligation to provide retail sports services and records the revenue as services are performed and when the commission amounts are no longer constrained (i.e., the amount is known). Certain relationships with business partners provide the Company the ability to operate the retail sportsbook at the land-based casino. In this scenario, revenue is generated based on total player bets less amounts paid to players for winning bets, less other incentives awarded to players. Social gaming The Company provides a social gaming platform for players to enjoy free-to-play games that use virtual credits. While virtual credits are issued to players for free, some players may choose to purchase additional virtual credits through the Company’s virtual cashier. The Company has a single performance obligation associated with social gaming services, to provide social gaming services to players upon the redemption of virtual credits. Deferred revenue is recorded when players purchase virtual coins and revenue is recognized when the virtual coins are redeemed, and the Company’s performance obligation has been fulfilled. Disaggregation of revenue for the three months ended March 31, 2021 and 2020, is as follows: Three months ended March 31, ($in thousands) 2021 2020 Online casino and online sports betting $ 109,978 $ 34,480 Retail sports betting 627 213 Social gaming 1,215 484 Total revenue $ 111,820 $ 35,177 Revenue by geographic region for the three months ended March 31, 2021 and 2020, is as follows: Three months ended March 31, ($in thousands) 2021 2020 United States $ 105,303 $ 32,883 Colombia 6,517 2,294 Total revenue $ 111,820 $ 35,177 The Company included deferred revenue within Players liabilities in the condensed consolidated balance sheets. Deferred revenue includes unsettled player bets, unredeemed social gaming virtual credits and unredeemed bonus amounts. The deferred revenue balances were as follows: Three months ended March 31, ($in thousands) 2021 2020 Deferred revenue, beginning of period $ 1,797 $ 321 Deferred revenue, end of period 2,163 95 Revenue recognized in the period from amounts included in deferred revenue at the beginning of the period 608 321 | 11. Revenue Recognition Disaggregation of revenue for the years ended December 31, 2020 and 2019, are as follows: Years Ended December 31, ($ in thousands) 2020 2019 Online casino and online sports betting $ 273,761 $ 61,268 Retail sports betting 1,205 1,053 Social gaming 3,534 1,346 Total revenue $ 278,500 $ 63,667 The following table presents the Company’s revenue by geographic region for the years ended December 31, 2020 and 2019: Years Ended December 31, ($ in thousands) 2020 2019 United States $ 263,214 $ 59,572 Colombia 15,286 4,095 Total revenue $ 278,500 $ 63,667 The Company included deferred revenue within Players liabilities in the consolidated balance sheets. Deferred revenue includes unsettled player bets, unredeemed social gaming virtual credits and the unredeemed bonus store points. The deferred revenue balances were as follows: Years Ended December 31, ($ in thousands) 2020 2019 Deferred revenue, beginning of period $ 321 $ 129 Deferred revenue, end of period 1,797 321 Revenue recognized in the period from amounts included in deferred revenue at the beginning of the period 321 129 |
Income Taxes_2
Income Taxes | 3 Months Ended | 12 Months Ended |
Mar. 31, 2021 | Dec. 31, 2020 | |
Income Taxes | ||
Income Taxes | 10. Income Taxes Income Tax Provision for the three months ended March 31, 2021 and 2020 is as follows: Three months ended March 31, ($in thousands) 2021 2020 Income tax provision $ 804 $ — The effective tax rates for the three months ended March 31, 2021 and 2020 were 110.44% and 0%, respectively. The difference between the Company's effective tax rate for the period ended March 31, 2021 and the U.S. statutory tax rate of 21% was primarily due to a full valuation allowance recorded on the Company’s net U.S. deferred tax assets and income tax rate differences related to its foreign operations for which both current and deferred taxes are recorded. The Company did not record a tax provision for the period ended March 31, 2020 primarily due to RSILP's status as a pass-through entity for U.S. federal income tax purposes. The Company evaluates the realizability of the deferred tax assets on a quarterly basis and establishes a valuation allowance when it is more likely than not that all or a portion of a deferred tax asset may not be realized. The Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”) was enacted on March 27, 2020 in the United States to provide emergency assistance to individuals and businesses affected by the COVID-19 pandemic. The CARES Act includes temporary changes to both income and non-income-based tax laws. For the year ended December 31, 2020, the impact of the CARES Act was immaterial to the Company’s tax provision. Future regulatory guidance under the CARES Act or additional legislation enacted by Congress could impact our tax provision in future periods. In connection with the Business Combination, the Special Limited Partner entered into the Tax Receivable Agreement, which generally provides for the payment by it of 85% of certain net tax benefits, if any, that the Company (including the Special Limited Partner) realize (or in certain cases is deemed to realize) as a result of an increase in tax basis and tax benefits related to the transactions contemplated under the Business Combination Agreement and the exchange of Retained RSILP Units for Class A Common Stock (or cash at the Company’s option) pursuant to the RSILP’s amended and restated limited partnership agreement and tax benefits related to entering into the Tax Receivable Agreement, including tax benefits attributable to payments under the Tax Receivable Agreement. These payments are the obligation of the Special Limited Partner and not of RSILP. The actual increase in the Special Limited Partner’s allocable share of RSILP’s tax basis in its assets, as well as the amount and timing of any payments under the Tax Receivable Agreement, will vary depending upon a number of factors, including the timing of exchanges, the market price of our Class A Common Stock at the time of the exchange and the amount and timing of the recognition of our and our consolidated subsidiaries’ (including the Special Limited Partner’s) income. Based primarily on historical losses of RSILP, management has determined it is more-likely-than-not that the Company will be unable to utilize its deferred tax assets subject to the Tax Receivable Agreement; therefore, management has not recorded the deferred tax asset or a corresponding liability under the Tax Receivable Agreement related to the tax savings the Company may realize from the utilization of tax deductions related to basis adjustments created by the transactions in the Business Combination Agreement. The unrecognized Tax Receivable Agreement liability is $51.6 million as of both March 31, 2021 and December 31, 2020. | 12. Income Taxes As a result of the Business Combination, the Company owned, indirectly through the Special Limited Partner, approximately 23.1% of the Common Units of RSILP, and as a result, gained control of RSILP as described in Note 4. RSILP is treated as a partnership for U.S. federal and most applicable state and local income tax purposes. As a partnership, RSILP is not subject to U.S. federal and certain state and local income taxes. Any taxable income or loss generated by RSILP is passed through to and included in the taxable income or loss of the RSILP Unit Holders and the Company, on a pro rata basis. The Company is subject to U.S. federal income taxes, in addition to state and local income taxes with respect to our allocable share of any taxable income or loss of RSILP, as well as any stand-alone income or loss generated by the Company. Income Tax (Benefit) Expense The components of the income tax (benefit) expenses are: Year Ended December 31, 2020 2019 Current income taxes: Federal $ — $ — State and local — — Foreign 2,708 — 2,708 — Deferred income taxes: Federal — — State and local — — Foreign 211 — 211 — Income tax (benefit) expense $ 2,919 $ — Reconciliations of income tax expense computed at the U.S. federal statutory income tax rate to the recognized income tax expense and the U.S. statutory income tax rate to our effective tax rates are as follows: Year Ended December 31, 2020 2019 (Restated) Net loss before income taxes $ (128,726) $ (22,450) Less: net loss before Reverse Recapitalization (133,404) (22,450) Less: net income before income taxes attributable to non-controlling interest 3,597 — Net income attributable to Rush Street Interactive Inc. before income taxes 1,081 — Income tax expense (benefit) at the federal statutory rate 227 — State income taxes, net of federal benefit 100 — Foreign operations 2,919 — Change in valuation allowance (327) — Income tax (benefit) expense $ 2,919 $ — Deferred Tax Assets and Liabilities The Company’s deferred tax position reflects the net tax effects of the temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax reporting. Significant components of the deferred tax assets and liabilities are as follows: Year Ended December 31, 2020 2019 Deferred tax assets: (Restated) Investment in subsidiaries $ 127,171 $ — Net operating losses 136 — Imputed interest 1,202 — Other assets 39 — Total gross deferred tax assets 128,548 — Valuation allowance (128,511) — Total deferred tax assets, net of valuation allowance 37 — Deferred tax liabilities: Investment in subsidiaries — — Total gross deferred tax liabilities — — Net deferred tax assets $ 37 $ — As of December 31, 2020, the Company had approximately $0.5 million each of federal and state net operating loss carryovers. If not utilized, the entire federal net operating loss carryforward can be carried forward indefinitely. State net operating loss carryovers will expire in varying amounts beginning in 2031. The Company regularly reviews its deferred tax assets, including net operating loss carryovers, for recoverability, and a valuation allowance is provided when it is more-likely-than-not that some portion or all of a deferred tax asset may not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which the temporary differences are deductible. In assessing the need for a valuation allowance, the Company makes estimates and assumptions regarding projected future taxable income, its ability to carry back operating losses to prior periods, the reversal of deferred tax liabilities and the implementation of tax planning strategies. Based on our cumulative earnings history and forecasted future sources of taxable income, the Company has determined it is not more-likely-than-not to realize existing deferred tax assets and thus has recorded a valuation allowance. As the Company reassesses these assumptions in the future, changes in forecasted taxable income may alter this expectation and may result in an increase to the valuation allowance and an increase in the effective tax rate. The Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”) was enacted on March 27, 2020 in the United States to provide emergency assistance to individuals and businesses affected by the COVID-19 pandemic. The CARES Act includes temporary changes to both income and non-income-based tax laws. For the year ended December 31, 2020, the impact of the CARES Act was immaterial to the Company’s tax provision. Future regulatory guidance under the CARES Act or additional legislation enacted by Congress in connection with the COVID-19 pandemic could impact our tax provision in future periods. Uncertain Tax Positions The Company evaluates its tax positions and recognizes tax benefits that, more-likely-than-not, will be sustained upon examination based on the technical merits of the position. The Company does not have any unrecognized tax benefits as of December 31, 2020. The Company will file initial year federal and state tax returns for tax year 2020, which is the first tax year subject to examination by taxing authorities. Additionally, although RSILP is treated as a partnership for U.S. federal and state income taxes purposes, it is still required to file an annual U.S. Return of Partnership Income, which is subject to examination by the Internal Revenue Service ("IRS"). The statute of limitations has expired for tax years through 2016 for RSILP. Tax Receivable Agreement Pursuant to RSILP's election under Section 754 of the Internal Revenue Code (the "Code"), the Company expects to obtain an increase in our share of the tax basis in the net assets of RSILP when RSILP Units are redeemed or exchanged by the unit holders and other qualifying transactions. The Company plans to make an election under Section 754 of Code for each taxable year in which a redemption or exchange of RSILP Units occur. The Company intends to treat any redemptions and exchanges of RSILP Units by the unit holders as direct purchases of RSILP Units for U.S. federal income tax purposes. These increases in tax basis may reduce the amounts that the Company would otherwise pay in the future to various tax authorities. These increases in tax basis may also decrease gains (or increase losses) on future dispositions of certain capital assets to the extent tax basis is allocated to those capital assets. In connection with the Business Combination, the Special Limited Partner entered into the Tax Receivable Agreement, which generally provides for the payment by it of 85% of certain net tax benefits, if any, that the Company (including the Special Limited Partner) realize (or in certain cases is deemed to realize) as a result of these increases in tax basis and tax benefits related to the transactions contemplated under the Business Combination Agreement and the exchange of Retained RSILP Units for Class A Common Stock (or cash at the Company’s option) pursuant to the RSILP A&R LPA and tax benefits related to entering into the Tax Receivable Agreement, including tax benefits attributable to payments under the Tax Receivable Agreement. These payments are the obligation of the Special Limited Partner and not of RSILP. The actual increase in the Special Limited Partner’s allocable share of RSILP’s tax basis in its assets, as well as the amount and timing of any payments under the Tax Receivable Agreement, will vary depending upon a number of factors, including the timing of exchanges, the market price of our Class A Common Stock at the time of the exchange and the amount and timing of the recognition of our and our consolidated subsidiaries’ (including the Special Limited Partner’s) income. While many of the factors that will determine the amount of payments that the Special Limited Partner will make under the Tax Receivable Agreement are outside of the Company's control, the Company expects that the payments the Special Limited Partner will make under the Tax Receivable Agreement will be substantial and could have a material adverse effect on the financial condition of the Company. Based primarily on historical losses of RSILP, management has determined it is more-likely-than-not that the Company will be unable to utilize its deferred tax assets subject to the Tax Receivable Agreement; therefore, management has not recorded the deferred tax asset or a corresponding liability under the Tax Receivable Agreement related to the tax savings the Company may realize from the utilization of tax deductions related to basis adjustments created by the transactions in the Business Combination Agreement. The unrecognized Tax Receivable Agreement liability as of December 31, 2020 is $51.6 million. |
Earnings (Loss) Per Share
Earnings (Loss) Per Share | 3 Months Ended | 12 Months Ended |
Mar. 31, 2021 | Dec. 31, 2020 | |
Loss Per Share | ||
Earnings (Loss) Per Share | 11. Loss Per Share Basic net loss per share of Class A Common Stock is computed by dividing net loss attributable to RSI by the weighted-average number of shares of Class A Common Stock outstanding during the period. Diluted net loss per share of Class A Common Stock is computed by dividing net loss attributable to RSI, adjusted for the assumed exchange of all potentially dilutive securities, by the weighted-average number of shares of Class A Common Stock outstanding adjusted to give effect to potentially dilutive shares. Prior to the Business Combination, the membership structure of RSILP included units that had profit interests. The Company analyzed the calculation of net loss per unit for periods prior to the Business Combination and determined that it resulted in values that would not be meaningful to the users of these condensed consolidated financial statements. Therefore, net loss per share information has not been presented for periods prior to the Closing of the Business Combination on December 29, 2020. The basic and diluted loss per share for the three months ended March 31, 2021 are as follows (amounts in thousands, except for share and per share amounts): Numerator: Net loss $ (76) Less: Net loss attributable to noncontrolling interests (59) Net loss attributable to Rush Street Interactive, Inc. – basic $ (17) Effect of dilutive securities: Warrants, net of amounts attributable to noncontrolling interests (9,569) Net loss attributable to Rush Street Interactive, Inc. – diluted $ (9,586) Denominator: Weighted average common shares outstanding – basic 46,955,262 Weighted average effect of dilutive securities: Public Warrants (1) 3,770,106 Private Placement and Working Capital Warrants (1) 2,690,120 Weighted average common shares outstanding – diluted 53,415,488 Net loss per Class A common share – basic $ (0.00) Net loss per Class A common share – diluted $ (0.18) (1) Calculated using the treasury stock method. Shares of the Company’s Class V Common Stock do not participate in the earnings or losses of the Company and are therefore not participating securities. As such, separate presentation of basic and diluted earnings per share of Class V Common Stock under the two-class method has not been presented. The Company excluded the following securities from its computation of diluted shares outstanding, as their effect would have been anti-dilutive: RSILP Units (1) 160,000,000 Unvested Restricted Stock Units 2,928,025 (1) These RSILP Units are held by the Sellers pursuant to the Business Combination, and may be exchanged, subject to certain restrictions, for Class A Common Stock. Upon exchange of an RSILP Unit, a share of Class V Common Stock is cancelled. | 13. Earnings (Loss) Per Share Basic net earnings per share of Class A Common Stock is computed by dividing net earnings attributable to RSI by the weighted-average number of shares of Class A Common Stock outstanding during the period. Diluted net loss per share of Class A Common Stock is computed by dividing net income attributable to RSI, adjusted for the assumed exchange of all potentially dilutive securities, by the weighted-average number of shares of Class A Common Stock outstanding adjusted to give effect to potentially dilutive shares. Prior to the Business Combination, the membership structure of RSILP included units which had profit interests. The Company analyzed the calculation of net loss per unit for periods prior to the Business Combination and determined that it resulted in values that would not be meaningful to the users of these audited consolidated financial statements. Therefore, net earnings per share information has not been presented for periods prior to the Business Combination on December 29, 2020. The basic and diluted earnings (loss)per share for the year ended December 31, 2020 represent only the period of December 29, 2020 to December 31, 2020. The computation of net earnings per share attributable to RSI and weighted-average shares of the Company’s Class A Common Stock outstanding for the year ended December 31, 2020 are as follows (amounts in thousands, except for share and per share amounts): Numerator: Net loss $ (131,645) Less: Net loss attributable to RSILP prior to the Business Combination (136,323) Less: Net income attributable to noncontrolling interests after the Business Combination 3,597 Net income attributable to Rush Street Interactive, Inc. – basic $ 1,081 Effect of dilutive securities: Public, Private Placement and Working Capital Warrants, net of amounts attributable to noncontrolling interests (1,656) Net loss attributable to Rush Street Interactive, Inc. – diluted $ (575) Denominator: Weighted average common shares outstanding – basic 43,579,704 Weighted average effect of dilutive securities: Public Warrants (1) Private Placement and Working Capital Warrants (1) Weighted average common shares outstanding - diluted Net income per Class A common share – basic $ Net loss per Class A common share – diluted $ (0.01) (1) Calculated using the treasury stock method. Shares of the Company’s Class V Common Stock do not participate in the earnings or losses of the Company and are therefore not participating securities. As such, separate presentation of basic and diluted earnings per share of Class V common stock under the two-class method has not been presented. The Company excluded the following securities from its computation of diluted shares outstanding, as their effect would have been anti-dilutive: RSILP Units (1) 160,000,000 Earnout Interests – Class A Common Stock (2) 1,212,813 (1) These RSILP Units are held by the Sellers, pursuant to the Business Combination, and may be exchanged, subject to certain restrictions, for Class A Common Stock. Upon exchange of an RSILP Unit, a share of Class V Common Stock is cancelled. These amounts include 15,000,000 RSILP Units issued to the Sellers in the Business Combination that remain subject to certain restrictions pending the achievement (if any) of certain earnout targets. (2) These Earnout Interests represent the Class A common shares held by the Founder Holders pursuant to the Business Combination. |
Related Parties_2
Related Parties | 3 Months Ended | 12 Months Ended |
Mar. 31, 2021 | Dec. 31, 2020 | |
Related Parties | ||
Related Parties | 12. Related Parties Services Agreement At the Closing, Rush Street Gaming, LLC (“RSG”), a current affiliate of the Company controlled by Neil Bluhm and Greg Carlin, entered into a Services Agreement (the “Services Agreement”), pursuant to which, among other things, RSG and its affiliates provide certain specified services to the Company for a period of two years following the Closing, subject to extension and early termination, including, without limitation, services relating to legal and compliance, human resources and information technology (in each case as more fully described in the Services Agreement). RSG had provided similar services to RSILP prior to the Business Combination and the Services Agreement represents a continuation of those services and support. As compensation for RSG’s provision of these services, the Company reimburses RSG for (i) all third party costs, including fees and costs incurred in connection with any required consents, incurred in connection with the provision of services, (ii) its reasonable and documented out-of-pocket travel and related expenses as approved by the Company, and (iii) an allocable portion of payroll, benefits and overhead (calculated at 150% of an employee’s salary, bonus and benefits cost) with respect to RSG’s or its affiliates’ employees who perform or otherwise assist in providing the services. Expenses relating to support services were $0.3 million and $0.2 million for the three months ended March 31, 2021 and 2020, respectively, while payables due to RSG for support services were $0.3 million at March 31, 2021 and December 31, 2020. These support services are recorded as General administration and other in the accompanying condensed consolidated statements of operations and comprehensive loss and any payables to RSG are recorded as Due to affiliates within the accompanying condensed consolidated balance sheets. Affiliated Land-Based Casinos Neil Bluhm and Greg Carlin are owners, directors and/or officers of certain land-based casinos. The Company has entered into certain agreements with these affiliated land-based casinos that create strategic partnerships aimed to capture the online gaming, online sports betting and retail sports services markets in the various states and municipalities where the land-based casinos operate. Generally, the Company pays a royalty fee to the land-based casino (calculated as a percentage of the Company’s revenue less reimbursable costs as defined in the agreement) in exchange for the right to operate real-money online casino and/or online sports betting under the gaming license of the land-based casinos. Royalties paid to affiliated casinos were $12.5 million and $4.8 million for the three months ended March 31, 2021 and 2020, respectively, which were net of any consideration received from the affiliated casino for reimbursable costs, as well as costs that are paid directly by the affiliated casino on the Company’s behalf. Net royalties paid are recorded as Costs of revenue in the accompanying condensed consolidated statements of operations and comprehensive loss. In certain cases, the affiliate casino maintains the bank account that processes cash deposits and withdrawals for RSI customers. Accordingly, at any point in time, the Company will record a receivable from the affiliate, representing RSI total gaming revenue (with RSI customers) that was collected by the affiliate, less consideration payable to the affiliate for use of its license, which is offset by any consideration received from the affiliate based on the terms of the agreement. Receivables due from affiliated land-based casinos were $30.0 million and $28.8 million at March 31, 2021 and December 31, 2020, respectively. In addition, the Company provides retail sports services to certain affiliated land-based casinos in exchange for a monthly commission based on the land-based casino’s retail sportsbook revenue. Services include ongoing management and oversight of the retail sportsbook, technical support for the land-based casino’s customers, risk management, advertising and promotion, and support for the third-party vendor’s sports betting equipment. Revenue recognized relating to retail sports services provided to affiliated land-based casinos for the three months ended March 31, 2021 and 2020 were not material to the condensed consolidated financial statements. Any payables due to the affiliated land-based casinos are netted against affiliate receivables to the extent a right of offset exists and were not material to the consolidated financial statements as of March 31, 2021 or December 31, 2020. | 14. Related Parties Prior to the Business Combination, RSILP’s principal unit holders included Neil G. Bluhm, Chairman, and NGB 2013 Grandchildren’s Dynasty Trust (collectively, “Bluhm and Trust”) and Gregory A. Carlin, Chief Executive Officer, and Greg and Marcy Carlin Family Trust (collectively, “Carlin and Trust”). Bluhm and Trust and Carlin and Trust had interests in RSILP of approximately 73% and 20%, respectively. Both Bluhm and Trust and Carlin and Trust are the owners of the Sellers’ Representative, which had an interest of approximately 1% in RSILP. Neil Bluhm and Gregory Carlin maintain ownership in RSILP and have control over governance and general operations. At the Closing, the Company and RSI GP entered into the Amended and Restated Limited Liability Company Agreement of RSI GP, pursuant to which, among other things, the parties established a board of managers of RSI GP, which is initially comprised of Neil Bluhm, Gregory Carlin and Richard Schwartz, President, to direct and exercise control over all activities of RSI GP, including RSI GP’s right to manage and control RSILP. Amended and Restated Agreement of Limited Partnership of RSILP At the Closing, the Company, the Special Limited Partner, RSI GP, RSILP and the Sellers entered into the RSILP A&R LPA. Management RSI GP, as the general partner of RSI following the Closing, has the sole authority to manage the business and affairs of RSI in accordance with the RSILP A&R LPA or applicable law, including laws relating to gaming. The business, property and affairs of RSILP will be managed solely by the general partner, and the general partner cannot be removed or replaced except with the consent of a majority in interests of the partners of RSILP and the Company. The rights of the general partner’s board of managers are governed by the general partner’s limited liability company agreement, which may be amended or modified from time to time by the Company. Tax Distributions The RSILP A&R LPA provides quarterly tax distributions payable in accordance with the RSILP A&R LPA to the holders of RSILP Units on a pro rata basis based upon an agreed-upon formula related to the taxable income of RSILP allocable to holders of RSILP Units. Generally, these tax distributions will be computed based on RSILP’s estimate of the taxable income of RSILP allocable to each holder of RSILP Units (based on certain assumptions) multiplied by an assumed tax rate equal to the highest effective marginal combined United States federal, state and local income tax rate prescribed for an individual or corporation resident in New York, California or Illinois (whichever results in the application of the highest state and local tax rate), subject to various adjustments. Distributions, including tax distributions, will be made to holders of RSILP Units on a pro rata basis. Transfer Restrictions The RSILP A&R LPA contains restrictions on transfers of units and requires the prior consent of the general partner for such transfers, except, in each case, for certain transfers to permitted transferees under certain conditions and exchanges of RSILP Units for shares of Class A Common Stock after the six-month anniversary of the Closing. Exchange of RSILP Units for Class A Common Stock The Sellers are, from and after the six-month anniversary of the Closing up to four times per calendar year, able to exchange all or any portion of their RSILP Units, together with the cancelation of an equal number of shares of Class V Common Stock, for a number of shares of Class A Common Stock equal to the number of exchanged RSILP Units by delivering a written notice to RSILP, with a copy to the Special Limited Partner; provided that no holder of RSILP Units may exchange less than 1,000 RSILP Units in any single exchange unless exchanging all of the RSILP Units held by such holder at such time, subject in each case to the limitations and requirements set forth in the RSILP A&R LPA regarding such exchanges. Notwithstanding the foregoing, the Special Limited Partner may, at its sole discretion, in lieu of delivering shares of Class A Common Stock for any RSILP Units surrendered for exchange, pay an amount in cash per RSILP Unit equal to the 5-day VWAP of the Class A Common Stock on the date of the receipt of the written notice of the exchange. Exchange Ratio For each RSILP Unit exchanged, one share of Class V Common Stock will be canceled, and one share of Class A Common Stock will be issued to the exchanging member. If the Class A Common Stock is converted or changed into another security, securities or other property, on any subsequent exchange an exchanging RSI Unit holder will be entitled to receive such security, securities or other property. Restrictions on Exchange In certain circumstances, RSI GP may limit the rights of holders of RSILP Units to exchange their RSILP Units under the RSILP A&R LPA if RSI GP determines in good faith that such restrictions are necessary so that RSILP will not be classified as a “publicly traded partnership” under applicable tax laws and regulations. Services Agreement At the Closing, Rush Street Gaming, LLC (“RSG”), a current affiliate of the Company controlled by Neil Bluhm and Greg Carlin, entered into a Services Agreement (the “Services Agreement”), pursuant to which, among other things, RSG and its affiliates provide certain specified services to the Company for a period of two years following the Closing, subject to extension and early termination, including, without limitation, services relating to legal and compliance, human resources and information technology (in each case as more fully described in the Services Agreement). RSG had provided similar services to RSILP prior to the Business Combination and the Services Agreement represents a continuation of those services and support. As compensation for RSG’s provision of these services, the Company reimburses RSG for (i) all third party costs, including fees and costs incurred in connection with any required consents, incurred in connection with the provision of services, (ii) its reasonable and documented out-of-pocket travel and related expenses as approved by the Company, and (iii) an allocable portion of payroll, benefits and overhead (calculated at 150% of an employee’s salary, bonus and benefits cost) with respect to RSG’s or its affiliates’ employees who perform or otherwise assist in providing the services. Expenses relating to support services were $1.3 million and $0.6 million for the years ended December 31, 2020 and 2019, respectively, while payables due to RSG for support services were $0.3 million and $0.2 million at December 31, 2020 and December 31, 2019, respectively. These support services are recorded as general administration and other in the accompanying consolidated statements of operations and comprehensive income (loss) and any payables to RSG are recorded as due to affiliates within the accompanying consolidated balance sheets. Affiliated Land-Based Casinos Neil Bluhm and Greg Carlin are owners and officers of certain land-based casinos. The Company has entered into certain agreements with these affiliated land-based casinos that create strategic partnerships aimed to capture the online gaming, online sports betting and retail sports services markets in the various states and municipalities where the land-based casinos operate. Generally, the Company pays a royalty fee to the land-based casino (calculated as a percentage of the Company’s revenue less reimbursable costs as defined in the agreement) in exchange for the right to operate real-money online casino and/or online sports betting under the gaming license of the land-based casinos. Royalties paid to affiliated casinos were $135.5 million and $6.9 million for the years ended December 31, 2020 and December 31, 2019, which were net of any consideration received from the affiliated casino for reimbursable costs. Net royalties paid are recorded as Costs of revenue in the accompanying consolidated statements of operations and comprehensive income (loss). In certain cases, the affiliate casino maintains the bank account that processes cash deposits and withdrawals for RSI customers. Accordingly, at any point in time, the Company will record a receivable from the affiliate, representing RSI total gaming revenue (with RSI customers) that was collected by the affiliate, less consideration payable to the affiliate for use of its license, which is offset by any consideration received from the affiliate based on the terms of the agreement. Receivables due from affiliated land-based casinos were $28.8 million and $3.1 million at December 31, 2020 and 2019, respectively. In addition, the Company provides retail sports services to certain affiliated land-based casinos in exchange for a monthly commission based on the land-based casino’s retail sportsbook revenue. Services include ongoing management and oversight of the retail sportsbook, technical support for the land-based casino’s customers, customer support, risk management, advertising and promotion, and support for the third-party vendor’s sports betting equipment. Revenue recognized relating to retail sports services provided to affiliated land-based casinos during the years ended December 31, 2020 and 2019 were not material to the consolidated financial statements. Any payables due to the affiliated land-based casinos are netted against Affiliate Receivables to the extent a right of offset exists and were not material to the consolidated financial statements for the years ended December 31, 2020 and 2019. |
Operating Leases
Operating Leases | 12 Months Ended |
Dec. 31, 2020 | |
Operating Leases | |
Operating Leases | 15. Operating Leases The Company leases office space under operating lease agreements with terms that do not exceed five years. The components of lease expense for the year ended December 31, 2020 are as follows: Year Ended ($ in thousands) December 31, 2020 Operating lease cost $ 252 Variable lease cost 132 Total lease expenses $ 384 Other information relating to leases for the year ended December 31, 2020 are as follows: Year Ended ($ in thousands) December 31, 2020 Operating cash flows from operating leases $ 253 Right-of-use assets obtained in exchange for new or modified operating lease liabilities $ 1,305 Weighted-average remaining lease term (in years) 2.6 Weighted-average discount rate – operating leases 6.0 % The Company calculated the weighted-average discount rate using incremental borrowing rates, which equal the rates of interest that it would pay to borrow funds on a fully collateralized basis over a similar term. Maturity of lease liabilities as of December 31, 2020 are as follows ($ in thousands): ($ in thousands) Year ending December 31, 2021 $ 322 Year ending December 31, 2022 337 Year ending December 31, 2023 355 Year ending December 31, 2024 233 Year ending December 31, 2025 114 Total undiscounted future cash flows 1,361 Less: present value discount (156) Operating lease liabilities $ 1,205 Disclosures Related to Periods Prior to Adoption of ASC 842 Future minimum payments under operating leases as of December 31, 2019 were as follows ($ in thousands): Year ending December 31, 2020 $ 239 Year ending December 31, 2021 249 Year ending December 31, 2022 264 Year ending December 31, 2023 239 Year ending December 31, 2024 100 Total $ 1,091 Total lease expense for the year ended December 31, 2019 was $0.4 million. |
Commitments and Contingencies_3
Commitments and Contingencies | 3 Months Ended | 12 Months Ended |
Mar. 31, 2021 | Dec. 31, 2020 | |
Commitments and Contingencies | ||
Commitments and Contingencies | 13. Commitments and Contingencies Legal Matters The Company is not a party to any material legal proceedings and is not aware of any pending or threatened claims except as noted below. From time to time however, the Company may be subject to various legal proceedings and claims that arise in the ordinary course of its business activities. A complaint in a case styled Todd L. Anderson. vs. Rush Street Gaming, LLC and Rush Street Interactive, LLC , Case Number # 120CV04794 that was filed in the United States District Court for the Northern District of Illinois was served on the Company on August 18, 2020 and was amended on September 15, 2020. The amended complaint alleges that Todd Anderson was offered a 1% equity stake in the Company in 2012 that was never issued and asserts breach of contract, promissory estoppel and unjust enrichment claims to recover damages. The Company believes that the complaint is without merit and intends to defend against it but cannot predict the outcome of the potential impact of this lawsuit and the potential result is not able to be estimated and, therefore, the Company has not recorded a loss or related accrual on its condensed consolidated financial statements related to this matter. Other Contractual Obligations The Company is a party to several non-cancelable contracts with vendors and licensors for marketing and other strategic partnership related agreements where the Company is obligated to make future minimum payments under the non-cancelable terms of these contracts as follows ($ in thousands): From April 1, 2021 to December 31, 2021 $ 9,234 Year ending December 31, 2022 6,367 Year ending December 31, 2023 2,706 Year ending December 31, 2024 1,514 Year ending December 31, 2025 10,537 Thereafter 24,577 Total (1) $ 54,935 (1) Includes operating lease obligations under non-cancelable lease contracts totaling $1.3 million, obligations under non-cancelable contracts with marketing vendors totaling $17.3 million, license and market access commitments totaling $36.2 million and other non-cancelable costs totaling $0.1 million. | 16. Commitments and Contingencies Legal Matters The Company is not a party to any material legal proceedings and is not aware of any pending or threatened claims except as noted below. From time to time however, the Company may be subject to various legal proceedings and claims that arise in the ordinary course of its business activities. A complaint in a case styled Todd L. Anderson. vs. Rush Street Gaming, LLC and Rush Street Interactive, LLC , Case Number # 120CV04794 that was filed in the United States District Court for the Northern District of Illinois was served on the Company on August 18, 2020 and was amended on September 15, 2020. The amended complaint alleges that Todd Anderson was offered a 1% equity stake in the Company in 2012 that was never issued and asserts breach of contract, promissory estoppel and unjust enrichment claims to recover damages. The Company believes that the complaint is without merit and intends to defend against it but cannot predict the outcome of the potential impact of this lawsuit and the potential result is not able to be estimated and, therefore, the Company has not recorded a loss or related accrual on its consolidated financial statements related to this matter. Other Contractual Obligations The Company is a party to several non-cancelable contracts with vendors and licensors for marketing and other strategic partnership related agreements where the Company is obligated to make future minimum payments under the non-cancelable terms of these contracts as follows ($ in thousands): Year ending December 31, 2021 $ 14,598 Year ending December 31, 2022 6,065 Year ending December 31, 2023 2,684 Year ending December 31, 2024 1,513 Year ending December 31, 2025 10,537 Thereafter 24,577 Total $ 59,974 |
Fair Value Measurements
Fair Value Measurements | 12 Months Ended |
Dec. 31, 2020 | |
Fair Value Measurements | |
Fair Value Measurements | 17. Fair Value Measurements As of December 31, 2020, the recorded values of current assets and current liabilities, except for the warrant liabilities and earnout interests liability, approximate fair value due to the short-term nature of these instruments. The Company’s financial liabilities subject to fair value measurements on a recurring basis and the level of inputs used for such measurements were as follows (amounts in thousands): Fair Value Measured as of December 31, 2020 Level 1 Level 2 Level 3 Total Public warrants (Restated) $ 88,079 $ — $ — $ 88,079 Private warrants (Restated) — 82,030 82,030 Earnout interests liability 351,048 351,048 Total fair value (Restated) $ 88,079 $ — $ 433,078 $ 521,157 Public Warrants The Company determined the fair value of its Public Warrants based on the publicly listed trading price of such warrants as of the valuation date. Accordingly, the Public Warrants are classified as Level 1 financial instruments. The fair value of the Public Warrants was $92.6 million and $88.1 million as of December 29, 2020 and December 31, 2020, respectively. Private Warrants The estimated fair value of the Private Warrants is determined with Level 3 inputs using the Black-Scholes model. The Private Warrants were valued as of December 29, 2020 (i.e., the Business Combination closing date) and December 31, 2020. The significant inputs and assumptions in this method are the stock price, exercise price, volatility, risk-free rate, and term or maturity. The underlying stock price input is the closing stock price as of each valuation date and the exercise price is the price as stated in the warrant agreement. The volatility input was determined using the historical volatility of comparable publicly traded companies which operate in a similar industry or compete directly against the Company. Volatility for each comparable publicly traded company is calculated as the annualized standard deviation of daily continuously compounded returns. The Black-Scholes analysis is performed in a risk-neutral framework, which requires a risk-free rate assumption based upon constant-maturity treasury yields, which are interpolated based on the remaining term of the Private Warrants as of each valuation date. The term/maturity is the duration between each valuation date and the maturity date, which is five years following the date the Business Combination closed, or December 29, 2025. The following table provides quantitative information regarding Level 3 fair value measurements inputs at their measurement dates: December 29, December 31, 2020 2020 Exercise price $ 11.50 $ 11.50 Stock price $ 21.65 $ 22.76 Volatility 41.4 % 41.4 % Term (years) 5.0 5.0 Risk-free interest rate 0.36 % 0.37 % The fair value of the Private Warrants was $88.6 million and $82.0 million as of December 29, 2020 and December 31, 2020, respectively. Earnout Interests Liability The range and weighted-average of the significant inputs used to fair value Level 3 recurring liabilities during the year ended December 31, 2020, along with the valuation techniques used, are shown in the following table: Observable (O) or Fair Value Valuation Unobservable (U) Range (in thousands) Technique Input (Weighted-Average) Earnout interests liability $ 351,048 Option pricing model Share price (O) $21.51 - $21.65 Volatility (U) 54.6% Term (U) 2.99 years Risk-free rate (O) 0.17% The share price input is based on the trading prices of the Company's Class A Common Stock at the valuation date. The volatility input was determined using the Guideline Public Companies' daily trading activity. Daily volatilities were calculated based on the daily trading activity using a historical lookback period commensurate with the maturity. The selected volatility was the average of the Guideline Public Companies' volatility for the period. The term input represents the time to expiration of the Earnout Interests. The risk-free rate input is based on the 3-year U.S. Treasury bond rate in effect at the date of the grant. |
Subsequent Events_2
Subsequent Events | 3 Months Ended | 12 Months Ended |
Mar. 31, 2021 | Dec. 31, 2020 | |
Subsequent Events | ||
Subsequent Events | 14. Subsequent Events Other than the information described below, the Company did not identify any subsequent events that would require recognition in the condensed consolidated financial statements or disclosure in the notes to the condensed consolidated financial statements. On April 9, 2021, the Board approved equity grants to the Company’s officers and certain non-employee directors that had an aggregate fair value of approximately $5.1 million. The equity grants are subject to customary terms and vesting conditions. | 18. Subsequent Events On January 13, 2021, the Earnout Interests were fully earned and no longer subject to the applicable restrictions on transfer and voting because the Volume Weighted Average Share Price exceeded $14.00 per share for 10 trading days within a 20 consecutive trading day period following the Closing. As a result, the earnout interests liability was reclassed to equity resulting in 1,212,813 additional shares of Class A Common Stock held by the Founder Holders and 15,000,000 additional shares of Class V Common Stock and RSILP Units issued to the Sellers (i.e., non-controlling interests). The vesting of the Earnout Interests resulted in a fair value adjustment to other expense of $13.7 million. On February 22, 2021, the Company announced the redemption of all the Company’s Public Warrants, which were exercisable for an aggregate of approximately 11.5 million shares of Class A Common Stock at a price of $11.50 per share. During March 2021, 11,442,389 Public Warrants were exercised at a price of $11.50 per share, resulting in cash proceeds of approximately $131.6 million and the issuance of 11,442,389 shares of Class A Common Stock. None of the Public Warrants remain outstanding as of the date hereof. On March 26, 2021, the Private Warrants were exercised in full on a cashless basis, resulting in the issuance of 2,571,808 shares of Class A Common Stock. None of the Private Warrants remain outstanding as of the date hereof. |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies (Policies) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2021 | Dec. 31, 2020 | |
Summary of Significant Accounting Policies and Recent Accounting Pronouncements | ||
Basis of Presentation and Principles of Consolidation | Basis of Presentation and Principles of Consolidation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) and the applicable regulations of the U.S. Securities and Exchange Commission (“SEC”) regarding interim financial reporting. Certain information and note disclosures normally included in annual financial statements prepared in accordance with U.S. GAAP have been condensed or omitted. Therefore, these unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and the related notes thereto as of and for the year ended December 31, 2020 included in the Company’s Annual Report on Form 10-K, as filed with the SEC on March 25, 2021 and as amended by Amendment No. 1 on Form 10-K/A and Amendment No. 2 on Form 10-K/A, as filed with the SEC on April 30, 2021 and May 7, 2021, respectively (collectively referred to herein as “Amended Annual Report”). These unaudited condensed consolidated financial statements include the accounts of the Company and its directly and indirectly wholly-owned subsidiaries. For consolidated entities that are less than wholly-owned, the third party’s holding of an equity interest is presented as Non-controlling interests in the Company’s condensed consolidated balance sheets and condensed consolidated statements of equity (deficit). The portion of net earnings attributable to the non-controlling interests is presented as Net loss attributable to non-controlling interests in the Company’s condensed consolidated statements of operations and comprehensive loss. All intercompany accounts and transactions have been eliminated upon consolidation. Pursuant to the Business Combination Agreement, the Business Combination was accounted for as a reverse recapitalization in accordance with U.S. GAAP (the “Reverse Recapitalization”). Under this method of accounting, dMY was treated as the acquired company and RSILP was treated as the acquirer for financial statement reporting purposes. Accordingly, for accounting purposes, the Reverse Recapitalization was treated as the equivalent of RSILP issuing stock for the net assets of dMY, accompanied by a recapitalization. RSILP was determined to be the accounting acquirer based on evaluation of the following facts and circumstances: · RSILP’s existing members, through their ownership of the Class V Common Stock, have the largest portion of the voting rights in the Company; · The Board of Directors of the Company and management are primarily composed of individuals associated with RSILP; and · RSILP is the larger entity based on historical operating activity and has the larger employee base. Thus, the financial statements included in this report reflect (i) the historical operating results of RSILP prior to the Reverse Recapitalization; (ii) the combined results of the RSILP and dMY following the Business Combination; and (iii) the acquired assets and liabilities of dMY stated at historical cost, with no goodwill or other intangible assets recorded. Certain prior period amounts have been reclassified to conform to the current period presentation. | Basis of Presentation and Principles of Consolidation The accompanying consolidated financial statements are presented in conformity with accounting principles generally accepted in the United States (“U.S. GAAP”) and pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”). The consolidated financial statements include the accounts and operations of the Company and its wholly-owned subsidiaries. For consolidated entities that are less than wholly-owned, the third party’s holding of an equity interest is presented as Non-controlling interests in the Company’s consolidated balance sheets and consolidated statements of equity (deficit). The portion of net earnings attributable to the non-controlling interests is presented as Net income (loss) attributable to non-controlling interests in the Company’s consolidated statements of operations and comprehensive income (loss). All intercompany accounts and transactions have been eliminated upon consolidation. Pursuant to the Business Combination Agreement, the Business Combination was accounted for as a reverse recapitalization in accordance with U.S. GAAP (the “Reverse Recapitalization”). Under this method of accounting, dMY is treated as the acquired company and RSILP is treated as the acquirer for financial statement reporting purposes. Accordingly, for accounting purposes, the Reverse Recapitalization was treated as the equivalent of RSILP issuing stock for the net assets of dMY, accompanied by a recapitalization. RSILP was determined to be the accounting acquirer based on evaluation of the following facts and circumstances: · RSILP’s existing member’s, through their ownership of the Class V Common Stock, have the largest portion of the voting rights in the Company; · The Board of Directors of the Company (the “Board”) and management are primarily composed of individuals associated with RSILP; and · RSILP is the larger entity based on historical operating activity and has the larger employee base. Thus, the financial statements included in this report reflect (i) the historical operating results of RSILP prior to the Reverse Recapitalization; (ii) the combined results of the RSILP and dMY following the Business Combination; and (iii) the acquired assets and liabilities of dMY stated at historical cost, with no goodwill or other intangible assets recorded. |
Reclassifications | Reclassifications Certain prior year amounts have been reclassified to conform to the current year presentation. | |
Liquidity and Capital Resources | Liquidity and Capital Resources Based on the net proceeds from the Business Combination (refer to Note 4) and the proceeds from warrant exercises resulting from the public warrant redemption (refer to Note 8) and future spend assumptions, the Company currently expects that its cash will be sufficient to fund its operating expenses and capital expenditure requirements for at least 12 months from the date of issuance of this report. The Company experienced positive operating cash flows of $16.2 million for the year ended December 31, 2020 and negative operating cash flows of $2.5 million for the year ended December 31, 2019. The Company has a working capital deficit as of December 31, 2020 totaling $106.5 million, mainly a result of the earnout interests liability, which was $351.0 million at December 31, 2020. The earnout interests liability pertains to certain shares and units held by directors of dMY and the Sellers that were subject to restrictions pending the achievement of certain earnout targets, which did not occur until January 2021 (refer to Notes 4 and 18). Although recorded as a current liability at December 31, 2020, the earnout interests liability was reclassed to equity upon occurrence of the triggering event in January 2021 and did not result in any cash settlement. That is, the earnout interest liability should not be included in any future cash flow assumptions as of December 31, 2020. Refer to Note 4 for additional discussion of the earnout interest liability. | |
Interim Unaudited Condensed Consolidated Financial Statements | Interim Unaudited Condensed Consolidated Financial Statements The accompanying condensed consolidated balance sheet as of March 31, 2021, and the condensed consolidated statements of operations and comprehensive loss, stockholders' equity (deficit), and cash flows for the three months ended March 31, 2021 and 2020, are unaudited. The condensed consolidated balance sheet as of December 31, 2020 was derived from audited financial statements, but does not include all disclosures required by U.S. GAAP. The interim unaudited condensed consolidated financial statements have been prepared on a basis consistent with the annual consolidated financial statements and, in the opinion of management, reflect all adjustments, which include only normal recurring adjustments, necessary to state fairly the Company's financial condition, its operations and cash flows for the periods presented. The historical results are not necessarily indicative of future results, and the results of operations for the three months ended March 31, 2021 are not necessarily indicative of the results to be expected for the full year or any other period. | |
Use of Estimates | Use of Estimates The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates. Significant estimates and assumptions reflected in the consolidated financial statements relate to and include, but are not limited to: the valuation of share-based awards; the estimated useful lives of property and equipment and intangible assets; redemption rate assumptions associated with the player loyalty program and other discretionary player bonuses; deferred revenue relating to our social gaming revenue stream; accrued expenses and other current liabilities; determination of the incremental borrowing rate to calculate operating lease liabilities; valuation of the earnout interests liability; valuation of the warrant liabilities; and deferred taxes and amounts associated with the Tax Receivable Agreement entered into in connection with the Business Combination (the “Tax Receivable Agreement”). | Use of Estimates The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates. Significant estimates and assumptions reflected in the consolidated financial statements relate to and include, but are not limited to, the valuation of share-based awards; the estimated useful lives of property and equipment and intangible assets; redemption rate assumptions associated with the loyalty program and other discretionary player bonuses; deferred revenue relating to our social gaming revenue stream; accrued expenses and other current liabilities; determination of the incremental borrowing rate to calculate operating lease liabilities; valuation of the earnout interests liability; valuation of the warrant liabilities; and deferred taxes and amounts associated with the Tax Receivable Agreement related to the Business Combination. |
Segment Reporting | Segment Reporting Operating segments are identified as components of an enterprise about which separate discrete financial information is available for evaluation by the chief operating decision maker in making decisions regarding resource allocation and assessing performance. The Company views its operations and manages its business in one operating segment. | |
Cash and Cash Equivalents and Restricted Cash | Cash and Cash Equivalents and Restricted Cash Cash and cash equivalents consist of highly liquid, unrestricted savings, checking and instant access internet banking accounts with original maturities of 90 days or less at acquisition. The Company maintains separate bank accounts to segregate cash that resides in players’ interactive gaming and sports betting accounts from cash used in operating activities. Due to certain regulatory requirements, cash amounts that reside in player’s interactive gaming and sports betting accounts at the end of the period are classified as restricted cash. The following table reconciles cash and cash equivalents and restricted cash in the balance sheet to the total shown on the statements of cash flows: December 31, 2020 2019 ($ in thousands) Cash and cash equivalents $ 255,622 $ 6,905 Restricted cash 6,443 3,638 Total cash, cash equivalents and restricted cash $ 262,065 $ 10,543 | |
Players Receivables | Players Receivables Players receivables consist of cash deposits from players that have not yet been received by the Company. Players receivables are stated at the amount that the Company expects to collect from players, generally via third-party payment processors. These receivables arise due to the timing difference between a player’s deposit and the Company’s receipt of that deposit from the payment processor. The amounts are generally outstanding for a short period of time. On a periodic basis, the Company evaluates its players receivable and establishes an allowance for doubtful accounts based on a specific review of the accounts as well as historical collection experience and current economic conditions. No allowance for doubtful accounts was recorded for the periods presented in these consolidated financial statements. | |
Due from Affiliates | Due from Affiliates Due from affiliates consists of amounts that are expected to be collected from certain affiliated land-based casino partners. In certain cases, the affiliate casino maintains the bank account that processes cash deposits and withdrawals for RSI customers. Accordingly, at any point in time, the Company will record a receivable from the affiliate, representing RSI total gaming revenue (with RSI customers) that was collected by the affiliate, less consideration payable to the affiliate for use of its license, which is offset by any consideration received from the affiliate based on the terms of the agreement. On a periodic basis, the Company evaluates the collectability of amounts due from affiliates and establishes an allowance for amounts not expected to be collected. No allowance was recorded for the periods presented in these consolidated financial statements. See Note 14 for disclosure on related parties. | |
Property and Equipment, net | Property and Equipment, net Property and equipment are carried at cost, net of accumulated depreciation. Depreciation is computed utilizing the straight-line method over the estimated useful life of the asset. Leasehold improvements depreciation is computed over the shorter of the lease term or estimated useful life of the asset. Additions and improvements are capitalized, while repairs and maintenance are expensed as incurred. Useful lives of each asset class are as follows: Computer equipment and software 3-5 years Furniture and fixtures 4 years Leasehold improvements Lesser of the lease terms or the estimated useful lives of the improvements, generally 1-10 years | |
License Fees, Net | License Fees, Net The Company incurs costs in connection with operating in certain regulated jurisdictions, including applying for licenses, compliance costs and the purchase of business licenses from strategic partners. The cost of purchasing business licenses, minimum royalty payments for strategic partners and subsequent renewals of business licenses are capitalized as an intangible asset and amortized over the estimated useful life of the asset using the straight-line method. RSI considers these minimum royalty payments to be an integral cost in connection with operating in certain jurisdictions. The minimum royalty payments are offset by the deferred royalty liability on the consolidated balance sheets. RSI’s access to operate in a particular market is often dependent upon the continued viability of that particular strategic partner in that market. The useful life is the period over which the asset is expected to contribute directly, or indirectly, to the Company’s cash flows. At least annually, the remaining useful life is evaluated. | |
Impairment of Long-Lived Assets | Impairment of Long-Lived Assets The Company’s long-lived assets consist of property and equipment, operating lease right-of-use assets and finite-lived intangible assets (i.e., license fees). The Company evaluates long-lived assets for indicators of impairment quarterly or when events or changes in circumstances indicate that their carrying amounts may not be recoverable. The factors that would be considered by management in performing this assessment include current operating results, trends and prospects, the manner in which the long-lived asset is used and the effects of obsolescence, demand, competition and other economic factors. If indicators of impairment are identified, the Company performs an undiscounted cash flow analysis of the long-lived assets. Asset groups are written down only to the extent that their carrying value is lower than their respective fair value. Fair values of the asset group are determined by discounting the cash flows at a rate that approximates the cost of capital of a market participant. The Company did not have any impairment of long-lived assets for the years ended December 31, 2020 and 2019. | |
Players Liabilities | Players Liabilities The Company records liabilities for player account balances, which consist of player deposits, plus player winning bets, less player losing bets, less player withdrawals. Player liabilities also includes the expected future payout relating to unredeemed bonus store points and unused discretionary bonus incentives in the player’s account. The Company’s restricted cash and players receivables balance will equal or exceed the cash portion of the Company’s player liabilities account. | |
Deferred Royalty | Deferred Royalty The Company records liabilities for minimum royalty payments related to licensing and market access agreements. These liabilities are recorded on the balance sheet at the present value of future payments discounted using a rate that reflects the duration of the agreement. The deferred royalty liability is accreted through interest expense in the Company’s consolidated statements of operations and comprehensive income (loss). The Company records deferred royalty liabilities as either deferred royalty, short-term or deferred royalty, long-term based on the timing of future payments. | |
Due to Affiliates | Due to Affiliates Due to affiliates consists of amounts owed by the Company to certain of its related parties. Amounts due to affiliates may include payment for services provided to the Company by employees of the related party or reimbursement of amounts paid by the related party on the Company’s behalf. Any royalties due to the affiliated land-based casinos are netted against Affiliate Receivables to the extent a right of offset exists. See Note 14 for disclosure on related parties. | |
Earnout Interests Liability | Earnout Interests Liability Earnout interests represent a freestanding financial instrument classified as liabilities on the accompanying consolidated balance sheet as the Company determined that these financial instruments are not indexed to the Company’s own equity in accordance with ASC 815, Derivatives and Hedging . Earnout interests were initially recorded as fair value in the Business Combination and are adjusted to fair value at each reporting date with changes in fair value recorded in Change in fair value of earnout interests liability in the consolidated statement of operations and comprehensive income (loss). | |
Warrant Liabilities | Warrant Liabilities As part of dMY’s initial public offering, dMY issued to third-party investors 23.0 million units, consisting of one share of Class A common stock of dMY and one-half of one warrant, at a price of $10.00 per unit. Each whole warrant entitled the holder to purchase one share of Class A common stock at an exercise price of $11.50 per share (the “Public Warrants”). Simultaneously with the dMY initial public offering, 6,600,000 private placement warrants were sold to the Sponsor (the “Private Placement Warrants”) and an additional 75,000 warrants were issued to the Sponsor upon the Closing in connection with converting certain working capital loans into warrants (the “Working Capital Warrants” and together with the Private Placement Warrants, the “Private Warrants” and the Private Warrants together with the Public Warrants, the “Warrants”)). Each Private Warrant allows the Sponsor to purchase one share of Class A Common Stock at $11.50 per share. Subsequent to the Business Combination, 11,500,000 Public Warrants and 6,675,000 Private Warrants remained outstanding as of December 31, 2020. The Private Warrants and the shares of Class A Common Stock issuable upon the exercise of the Private Warrants are not transferable, assignable or salable until after the completion of a Business Combination, subject to certain limited exceptions. Additionally, the Private Warrants are exercisable for cash or on a cashless basis, at the holder’s option, and are non-redeemable so long as they are held by the initial purchasers or their permitted transferees. If the Private Warrants are held by someone other than the initial purchasers or their permitted transferees, the Private Warrants will be redeemable by the Company and exercisable by such holders on the same basis as the Public Warrants. The Company evaluated the Warrants pursuant to ASC 815-40, and concluded that they do not meet the criteria to be classified in stockholders’ equity. Specifically, the exercise of these Warrants may be settled in cash upon the occurrence of a tender offer or exchange that involves 50% or more of our stockholders holding Class A Common Stock. Because not all of the stockholders need to participate in such tender offer or exchange to trigger the potential cash settlement and the Company does not control the occurrence of such an event, the Company concluded that the Warrants do not meet the conditions to be classified in equity. Because the Warrants meet the definition of a derivative under ASC 815-40, the Company records these Warrants as liabilities on its consolidated balance sheet at fair value as of each reporting date, with subsequent changes in their respective fair values recognized in its consolidated statement of operations and comprehensive income (loss). | |
Concentrations of Credit Risk | Concentrations of Credit Risk Financial instruments that potentially subject the Company to concentrations of credit risk consist primarily of operating cash and restricted cash. The Company maintains cash and restricted cash primarily across three financial institutions within separate bank accounts. Management believes the three financial institutions to be of a high credit quality, in amounts that exceed federally insured limits. The Company does not believe that it is subject to unusual credit risk beyond the normal credit risk associated with commercial banking relationships. | |
Leases | Leases In February 2016, the FASB issued ASU 2016‑02, Leases (Topic 842) ("ASU 2016-02"). The Company adopted the new standard on January 1, 2020 using the modified retrospective approach. Under this guidance, arrangements meeting the definition of a lease are classified as operating or financing leases and are recorded on the consolidated balance sheet as both a right-of-use asset and a lease liability. The Company determines whether an arrangement is or contains a lease at contract inception. The lease classification evaluation begins at the lease commencement date. The lease term used in the evaluation includes the non-cancellable period for which the Company has the right to use the underlying asset, together with renewal option periods when the exercise of the renewal option is reasonably certain. For leases with an initial term greater than 12 months, a related lease liability is recorded on the balance sheet at the present value of future payments discounted at the estimated fully collateralized incremental borrowing rate (discount rate) corresponding with the lease term. In addition, a right-of-use asset is recorded as the initial amount of the lease liability, plus any lease payments made to the lessor before or at the lease commencement date and any initial direct costs incurred, less any tenant improvement allowance incentives received. Tenant incentives are amortized through the right-of-use asset as a reduction of rent expense over the lease term. The difference between the minimum rents paid and the straight-line rent is reflected within the associated right-of-use asset. Certain leases contain provisions that require variable payments consisting of common area maintenance costs (variable lease cost). Variable lease costs are expensed as incurred. Leases with an initial term of 12 months or less (short-term leases) are not recorded on the balance sheet. Short-term lease expense is recognized on a straight-line basis over the lease term. As the interest rate implicit in the lease is not readily determinable, the Company uses its incremental borrowing rate corresponding with the lease term. As the Company does not have any outstanding debt, this rate is determined based on prevailing market conditions and comparable company and credit analysis. The incremental borrowing rate is reassessed if there is a change to the lease term or if a modification occurs and it is not accounted for as a separate contract. Prior to January 1, 2020, the Company accounted for leases under ASC 840, Leases (Topic 840) , and recorded rent expense associated with its operating lease on a straight-line basis over the term of the lease. | |
Revenue Recognition | Revenue Recognition Revenue is recognized when control of the promised goods or services is transferred to the customer, in an amount that reflects the consideration the Company expects to be entitled to in exchange for those goods or services. The Company determines revenue recognition through the following steps: · Identify the contract with the customer · Identify the performance obligations in the contract · Determine the transaction price · Allocate the transaction price to the performance obligations in the contract · Recognize revenue when, or as, the company satisfies a performance obligation The Company’s revenue from contracts with customers consists of online casino, online sports betting, retail sports betting and social gaming. Online casino and online sports betting Online casino offerings typically include the full suite of games available in land-based casinos, such as blackjack, roulette and slot machines. For these offerings, the Company generates revenue through hold, or gross winnings, as customers play against the house. Online casino revenue is generated based on total player bets less amounts paid to players for winning bets, less other incentives awarded to players, plus or minus the change in the progressive jackpot reserve. Online sports betting involves a user placing a bet on the outcome of a sporting event, or a series of sporting events, with the chance to win a pre-determined amount, often referred to as fixed odds. Online sports betting revenue is generated by setting odds such that there is a built-in theoretical margin in each sports bet offered to its customers. Online sports betting revenue is generated based on total player bets less amounts paid to players for winning bets, less other incentives awarded to players, plus or minus the change in unsettled bets. The Company provides various incentives to promote customer engagement, many of which allow customers to place bets without using their own funds. For some incentive programs, benefits are provided to customers based only on past play and represent an option that grants the player a material right. Other benefits that are provided to customers are more discretionary in nature and may not be related to the customer’s level of play. Performance obligations related to online gaming and sports betting transactions include (1) servicing the player’s bet, which is fulfilled when the outcome of the bet is known and (2) transferring additional goods or services to a player for which the Company has received consideration, such as bonus store points. Bonus store points as well as discretionary bonus incentives, such as bonus dollars and free bets (collectively referred to herein as “player bonuses”) are recognized as a reduction to revenue upon issuance of the incentive and as revenue upon redemption by the player. Reductions to revenue include estimates for the standalone selling price of player bonuses and the percentage of player bonuses that are expected to be redeemed. The expected redemption percentage is based on historical redemption patterns and considers current information or trends. The estimated redemption rate is evaluated each reporting period. The Company does not believe that there is a reasonable likelihood that there will be a material change in the future estimates or assumptions used to calculate the estimated redemption rate. Adjustments to earnings resulting from revisions to management’s estimates of the redemption rates have been insignificant during the years ended December 31, 2020 and December 31, 2019. An increase or decrease in the estimated redemption rate of 5% would not have a material effect on consolidated financial statements for the year ended December 31, 2020. Progressive jackpots related to online casino jackpot games are accrued and charged to revenue at the time the obligation to pay the jackpot is established. The progressive jackpot liability is recorded in Accrued expenses and other current liabilities on the consolidated balance sheets. Retail sports betting The Company provides retail sports services to land-based casinos in exchange for a monthly commission based on the land-based casino’s retail sportsbook revenue. Services include ongoing management and oversight of the retail sportsbook, technical support for the land-based casino’s customers, customer support, risk management, advertising and promotion, and support for the third-party vendor’s sports betting equipment. The Company has a single performance obligation to provide retail sports services and records the revenue as services are performed and when the commission amounts are no longer constrained (i.e., the amount is known). Certain relationships with business partners provide the Company the ability to operate the retail sportsbook at the land-based casino. In this scenario, revenue is generated based on total player bets less amounts paid to players for winning bets, less other incentives awarded to players. Social gaming The Company provides a social gaming platform for players to enjoy free-to-play games that use virtual credits. While virtual credits are issued to players for free, some players may choose to purchase additional virtual credits through the Company’s virtual cashier. The Company has a single performance obligation associated with social gaming services, to provide social gaming services to players upon the redemption of virtual credits. Deferred revenue is recorded when players purchase virtual coins and revenue is recognized when the virtual coins are redeemed, and the Company’s performance obligation has been fulfilled. Certain costs to obtain or fulfill contracts Pursuant to the accounting guidance, certain costs to obtain or fulfill a contract with a customer must be capitalized, to the extent recoverable from the associated contract margin, and subsequently amortized as the products or services are delivered to the customer. These costs are capitalized as contract acquisition costs and are amortized over the period of benefit to the customer. For the Company, the period of benefit has been determined to be less than or equal to one year. As such, the Company applied the practical expedient and contract acquisition costs are expensed immediately. Customer contract costs that do not qualify for capitalization as contract fulfillment costs are expensed as incurred. Contract balances Contract assets and liabilities represent the differences in the timing of revenue recognition from the receipt of cash from the Company’s customers and billings. The Company currently does not have contractual terms that require it to satisfy or partially satisfy its performance obligations in advance of customer billings. Deferred revenue represents wagered amounts that relate to unsettled or pending outcomes, such as a future sports bet. The Company recognizes revenue once the outcome of the bet is settled and fixed. Deferred revenue relating to the Company’s social gaming services includes virtual coins purchased by players but not yet used. Deferred revenue also includes contract liabilities for the Company’s obligation to transfer additional goods or services to a player for which the Company has received consideration, such as bonus store points. The Company recognizes breakage on bonus store points proportionately as redemption occurs. Revenue recognized relating to breakage during the years ended December 31, 2020 and 2019 were not material to the consolidated financial statements. Deferred revenue is recorded in Players liabilities on the consolidated balance sheets. Principle versus agent considerations The Company evaluates the criteria outlined in ASC 606-10-55, Principal versus Agent Considerations , in determining whether it is appropriate to record the gross amount of revenues and related costs, or the net amount earned as commissions. When the Company is the principal in a transaction and controls the specific good or service before it is transferred to the customer, revenue is recorded gross; otherwise, revenue is recorded on a net basis. The Company controls the promised goods or services for online casino and sports betting transactions, retail sports betting transactions and social gaming services, and as a result records related revenue on a gross basis. For retail sports services, the Company does not control the promised goods or services and, therefore, records the net amount of revenue earned as a commission. See Note 11 for a disaggregation of the Company’s revenues. | |
Costs of Revenue | Costs of Revenue Costs of revenue consist primarily of (i) revenue share and market access fees, (ii) platform and content fees, (iii) gaming taxes, (iv) payment processing fees and chargebacks and (v) salaries and benefits of dedicated personnel. These costs are variable in nature and should correlate with the change in revenue. | |
Advertising and Promotions Costs | Advertising and Promotions Costs Advertising and promotion costs consist primarily of marketing the Company’s products and services via different channels, promotional activities, and the related costs incurred to acquire new customers that include salaries and benefits for dedicated personnel and are expensed as incurred. | |
General Administration and Other | General Administration and Other General administration and other expenses consist primarily of administrative personnel costs, including salaries, bonuses and benefits, share-based compensation expenses, professional services related to legal, compliance and audit/consulting services, rent and other premises costs, and insurance. | |
Share-Based Compensation | Share-Based Compensation The Company records share-based compensation in accordance with ASC 718, Compensation — Stock Compensation (“ASC 718”) and recognizes share-based compensation expense in the period in which a grantee is required to provide service, which is generally over the vesting period of the individual share-based payment award. Compensation expense for awards with performance conditions is not recognized until it is probable that the performance target will be achieved. Compensation expense for awards is recognized over the requisite service period on a straight-line basis. The Company accounts for forfeitures as they occur. The Company classifies unit awards as either an equity award or a liability award depending on whether the award contains certain repurchase provisions. Equity-classified awards are valued as of the grant date based upon the price of the underlying unit or share and a number of assumptions, including volatility, performance period, risk-free interest rate and expected dividends. Liability-classified awards are valued at fair value at each reporting date. See Note 10. Share-based payment awards which contain certain repurchase provisions were classified as liabilities in accordance with ASC 718. The Company elected to measure all liability-classified awards utilizing an option pricing method and recognizes the related expense within General administration and other expenses in the consolidated statements of operations and comprehensive income (loss). | |
Income Taxes | Income Taxes RSI Inc. is a corporation and, as a result, is subject to United States federal, state, and foreign income taxes. RSILP is treated as a partnership for United States federal income tax purposes and therefore does not pay United States federal income tax on its taxable income. Instead, the RSILP unitholders, including the Company, are liable for United States federal income tax on their respective shares of RSILP's taxable income reported on the unitholders' United States federal income tax returns. RSILP is liable for income taxes in those states not recognizing its status as a partnership for United States federal income tax purposes. The Company accounts for income taxes using the asset and liability method. Under this method, deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are calculated by applying existing tax laws and the rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in the year of the enacted rate change. The Company recognizes deferred tax assets to the extent the Company believes these assets are more-likely-than-not to be realized. In making such a determination, the Company considers all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax planning strategies and recent results of operations. The Company accounts for uncertainty in income taxes using a recognition and measurement threshold for tax positions taken or expected to be taken in a tax return, which are subject to examination by federal and state taxing authorities. The tax benefit from an uncertain tax position is recognized when it is more-likely-than-not that the position will be sustained upon examination by taxing authorities based on technical merits of the position. The amount of the tax benefit recognized is the largest amount of the benefit that has a greater than 50% likelihood of being realized upon ultimate settlement. The effective tax rate and the tax basis of assets and liabilities reflect management’s estimates of the ultimate outcome of various tax uncertainties. The Company recognizes penalties and interest related to uncertain tax positions within the provision (benefit) for income taxes line in the accompanying consolidated statements of operations. See Note 12, “Income Taxes” for additional information regarding income taxes. | |
Tax receivable agreement | Tax receivable agreement In connection with the Business Combination, the Special Limited Partner entered into the Tax Receivable Agreement, which generally provides for the payment by it of 85% of certain net tax benefits, if any, that the Company (including the Special Limited Partner) realize (or in certain cases is deemed to realize) as a result of these increases in tax basis and tax benefits related to the transactions contemplated under the Business Combination Agreement and the exchange of Retained RSILP Units for Class A Common Stock (or cash at the Company's option) pursuant to the RSILP A&R LPA and tax benefits related to entering into the Tax Receivable Agreement, including tax benefits attributable to payments under the Tax Receivable Agreement. These payments are the obligation of the Special Limited Partner and not of RSILP. The actual increase in the Special Limited Partner's allocable share of RSILP's tax basis in its assets, as well as the amount and timing of any payments under the Tax Receivable Agreement, will vary depending upon a number of factors, including the timing of exchanges, the market price of our Class A Common Stock at the time of the exchange and the amount and timing of the recognition of our and our consolidated subsidiaries' (including the Special Limited Partner's) income. While many of the factors that will determine the amount of payments that the Special Limited Partner will make under the Tax Receivable Agreement are outside of the Company's control, the Company expects that the payments the Special Limited Partner will make under the Tax Receivable Agreement will be substantial and could have a material adverse effect on the financial condition of the Company. The Company evaluates the realizability of the deferred tax assets resulting from the exchange of RSILP Units for Class A Common Stock. If the deferred tax assets are determined to be realizable, the Company then assesses whether payment of amounts under the TRA have become probable. If so, the Company records a TRA liability equal to 85% of such deferred tax assets. In subsequent periods, the Company assesses the realizability of all of our deferred tax assets subject to the TRA. Should it be determined that a deferred tax asset with a valuation allowance is realizable in a subsequent period, the related valuation allowance will be released and consideration of a corresponding TRA liability will be assessed. The realizability of deferred tax assets, including those subject to the TRA, is dependent upon the generation of future taxable income during the periods in which those deferred tax assets become deductible and consideration of prudent and feasible tax-planning strategies. The measurement of the TRA liability is accounted for as a contingent liability. Therefore, once the Company determines that a payment becomes probable and can be estimated, the estimate of the payment will be accrued. | |
Earnings Per Share | Earnings Per Share Basic net earnings per share is computed by dividing net earnings attributable to Rush Street Interactive, Inc. for the period following the Business Combination by the weighted-average number of shares of Class A Common Stock outstanding during the same period. Diluted net earnings per share is computed giving effect to all potential weighted-average dilutive shares for the period. The dilutive effect of outstanding awards or financial instruments, if any, is reflected in diluted earnings per share by application of the treasury stock method or if-converted method, as applicable. Prior to the Business Combination, the membership structure of RSILP included units which had profit interests. The Company analyzed the calculation of earnings per unit for periods prior to the Business Combination and determined that it resulted in values that would not be meaningful to the users of these audited consolidated financial statements. Therefore, earnings per share information has not been presented for periods prior to the Business Combination on December 29, 2020. The basic and diluted earnings per share for the year ended December 31, 2020 represent only the period of December 29, 2020 to December 31, 2020. | |
Foreign Currency | Foreign Currency The Company’s reporting currency is the U.S. dollar while the functional currency of non-U.S. subsidiaries is the Colombian peso. The financial statements of non-U.S. subsidiaries are translated into United States dollars in accordance with ASC 830, Foreign Currency Matters , using period-end rates of exchange for assets and liabilities, and average rates of exchange for the period for revenues, costs, and expenses and historical rates for equity. Translation adjustments resulting from the process of translating the local currency financial statements into U.S. dollars are included in determining other comprehensive income (loss). | |
Fair Value Measurements | Fair Value Measurements Fair value measurements are based on the premise that fair value is an exit price representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability. As a basis for considering such assumptions, the following three-tier fair value hierarchy has been used in determining the inputs used in measuring fair value: · Level 1 – Quoted prices in active markets for identical assets or liabilities on the reporting date. · Level 2 – Pricing inputs are based on quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active and model-based valuation techniques for which all significant assumptions are observable in the market or can be corroborated by observable market data for substantially the full term of the assets or liabilities. · Level 3 – Pricing inputs are generally unobservable and include situations where there is little, if any, market activity for the investment. The inputs into the determination of fair value require management’s judgment or estimation of assumptions that market participants would use in pricing the assets or liabilities. The fair values are therefore determined using factors that involve considerable judgment and interpretations, including but not limited to private and public comparables, third-party appraisals, discounted cash flow models, and fund manager estimates. Financial instruments measured at fair value are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. Management’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the asset or liability. The use of different assumptions and/or estimation methodologies may have a material effect on estimated fair values. Accordingly, the fair value estimates disclosed or initial amounts recorded may not be indicative of the amount that the Company or holders of the instruments could realize in a current market exchange. See Note 17 for additional information related to fair value measurement. | |
Significant Accounting Policies | Significant Accounting Policies The following accounting policy is incremental to the Company’s significant accounting policies as described in Note 2, “Summary of Significant Accounting Policies,” of its audited consolidated financial statements and related notes included in the Amended Annual Report. | |
Internally Developed Software | Internally Developed Software Software that is developed for internal use is accounted for pursuant to Accounting Standards Codification (“ASC”) 350-40, Intangibles, Goodwill and Other — Internal-Use Software . Qualifying costs incurred to develop internal-use software are capitalized when (i) the preliminary project stage is completed, (ii) management has authorized further funding for the completion of the project and (iii) it is probable that the project will be completed and perform as intended. These capitalized costs include compensation for employees who develop internal-use software and external costs related to development of internal-use software. Capitalization of these costs ceases once the project is substantially complete and the software is ready for its intended purpose. Internally developed software is amortized using the straight-line method over an estimated useful life of three to four years. All other expenditures, including those incurred to maintain an intangible asset’s current level of performance, are expensed as incurred. | |
Recently Adopted Accounting Pronouncements | Recently Adopted Accounting Pronouncements In December 2019, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes (“ASU 2019-12”), which is intended to simplify various aspects related to accounting for income taxes. ASU 2019-12 removes certain exceptions to the general principles in ASC 740 and clarifies and amends existing guidance to improve consistent application. This guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020, with early adoption permitted. The Company adopted ASU 2019-12 on January 1, 2021, and the adoption had no impact on its condensed consolidated financial statements. | Recently Adopted Accounting Pronouncements In February 2016, the FASB issued ASU 2016‑02. The guidance in ASU 2016-02 and subsequently issued amendments requires lessees to capitalize virtually all leases with terms of more than twelve months on the balance sheet as a right-of-use asset and recognize an associated lease liability. The right-of-use asset represents the lessee’s right to use, or control the use of, a specified asset for the specified lease term. The lease liability represents the lessee’s obligation to make lease payments arising from the lease, measured on a discounted basis. Based on certain characteristics, leases are classified as financing or operating leases and their classification affects the recognition of expense in the income statement. The Company adopted the new standard on January 1, 2020 using the modified retrospective approach by recognizing and measuring leases without revising comparative period information or disclosures. The Company elected the transition package of three practical expedients permitted within the standard. In addition, the Company elected to apply the practical expedient that allows for the combination of lease and non-lease components for all asset classes. The Company made an accounting policy election to keep leases with terms of twelve months or less off the balance sheet and recognize those lease payments on a straight-line basis over the lease term. The adoption of ASU 2016-02 resulted in the recognition of operating lease assets and liabilities of $0.2 million and $0.2 million, respectively, with no effect on opening accumulated deficit. The adoption of ASU 2016-02 did not materially affect the Company’s consolidated results of operations and had no impact on cash flows. In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820), - Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement , which makes a number of changes meant to add, modify or remove certain disclosure requirements associated with the movement amongst or hierarchy associated with Level 1, Level 2 and Level 3 fair value measurements. On January 1, 2020, the Company adopted this guidance, which did not have a material impact on the Company’s consolidated financial statements. |
Recent Accounting Pronouncements Not Yet Adopted | Recent Accounting Pronouncements Not Yet Adopted In June 2016, the FASB issued ASU 2016-13, Financial Instruments – Credit Losses (Topic 326) . Together with subsequent amendments, this ASU sets forth a “current expected credit loss” model, which requires the Company to measure all expected credit losses for financial instruments held at the reporting date based on historical experience, current conditions and reasonable supportable forecasts. This ASU replaces the existing incurred loss model and is applicable to the measurement of credit losses on financial assets measured at amortized cost, available-for-sale debt securities and applies to certain off-balance sheet credit exposures. This ASU is effective for the Company in calendar year 2023. The Company is currently assessing the impact of the adoption of this ASU on its condensed consolidated financial statements. | Recent Accounting Pronouncements Not Yet Adopted In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments – Credit Losses (Topic 326) . Together with subsequent amendments, the ASU sets forth a “current expected credit loss” model which requires the Company to measure all expected credit losses for financial instruments held at the reporting date based on historical experience, current conditions and reasonable supportable forecasts. This ASU replaces the existing incurred loss model and is applicable to the measurement of credit losses on financial assets measured at amortized cost, available-for-sale debt securities and applies to certain off-balance sheet credit exposures. This ASU is effective for the Company in calendar year 2023. The Company is currently assessing the impact of the adoption of this ASU on its consolidated financial statements. In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes (“ASU 2019-12”), which is intended to simplify various aspects related to accounting for income taxes. ASU 2019-12 removes certain exceptions to the general principles in ASC 740 and also clarifies and amends existing guidance to improve consistent application. This guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020, with early adoption permitted. The Company is currently evaluating the impact of this standard on its consolidated financial statements. In August 2020, the FASB issued ASU 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity , which simplifies accounting for convertible instruments by removing major separation models required under current GAAP. This ASU removes certain settlement conditions that are required for equity contracts to qualify for the derivative scope exception and it also simplifies the diluted earnings per share calculation in certain areas. This ASU is effective for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years. Early adoption is permitted, but no earlier than fiscal years beginning after December 15, 2021 and adoption must be as of the beginning of the Company’s annual fiscal year. The Company is currently evaluating the impact of this standard on its consolidated financial statements and related disclosures. |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Summary of Significant Accounting Policies and Recent Accounting Pronouncements | |
Schedule of reconciles cash and cash equivalents and restricted cash in the balance sheet to the total shown on the statement of cash flows | December 31, 2020 2019 ($ in thousands) Cash and cash equivalents $ 255,622 $ 6,905 Restricted cash 6,443 3,638 Total cash, cash equivalents and restricted cash $ 262,065 $ 10,543 |
Schedule of useful lives of each asset class. | Computer equipment and software 3-5 years Furniture and fixtures 4 years Leasehold improvements Lesser of the lease terms or the estimated useful lives of the improvements, generally 1-10 years |
Restatement of Consolidated F_2
Restatement of Consolidated Financial Statements (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Restatement of Consolidated Financial Statements | |
Schedule of impact of the restatement on the Consolidated Balance Sheet, Consolidated Statement of Operations and Consolidated Statement of Cash Flows | The impact of the restatement on the consolidated balance sheet, consolidated statement of operations and consolidated statement of cash flows as of and for the year ended December 31, 2020 is presented below. The restatement had no impact on net cash flows from operating, investing or financing activities. December 31, 2020 As Previously Restatement Reported Adjustment As Restated (In Thousands) Warrant liabilities $ — $ 170,109 $ 170,109 Total liabilities 405,780 170,109 575,889 Additional paid-in-capital 22,566 (40,968) (18,402) Accumulated deficit (45,146) 1,656 (43,490) Total stockholders’ deficit attributed to Rush Street Interactive, Inc. (22,467) (39,312) (61,779) Noncontrolling interests (74,753) (130,797) (205,550) Total deficit (97,220) (170,109) (267,329) For the Year Ended December 31, 2020 As Previously Restatement Reported Adjustment As Restated (In Thousands, Except Share and per Share Amounts) Revenue $ 278,500 $ — $ 278,500 Loss from operations (133,419) — (133,419) Change in fair value of warrant liabilities — 7,166 7,166 Total other income (expenses) (2,473) 7,166 4,693 Loss before income taxes (135,892) 7,166 (128,726) Income tax expense 2,919 — 2,919 Net loss (138,811) 7,166 (131,645) Net loss attributable to non-controlling interests (138,236) 5,510 (132,726) Net income (loss) attributable to Rush Street Interactive, Inc. (575) 1,656 1,081 Net income (loss) per common share attributable to Rush Street Interactive, Inc. – Basic (0.01) 0.02 Weighted-average common shares outstanding - Basic 43,579,704 43,579,704 Net loss per common share attributable to Rush Street Interactive, Inc. – Diluted (0.01) (0.01) Weighted-average common shares outstanding - Diluted 43,579,704 52,242,606 Comprehensive loss (138,287) 7,166 (131,121) Comprehensive loss attributable to non-controlling interests (137,712) 5,510 (132,202) Comprehensive income (loss) attributable to Rush Street Interactive, Inc. (575) 1,656 1,081 For the Year Ended December 31, 2020 As Previously Restatement Reported Adjustment As Restated (In Thousands) Statement of Cash Flows Net loss $ (138,811) $ 7,166 $ (131,645) Adjustment to reconcile net loss to net cash provided by (used in) operating activities 154,990 (7,166) 147,824 Net cash provided by (used in) operating activities 16,179 — 16,179 Net cash used in investing activities (6,243) — (6,243) Net cash provided by financing activities 241,071 — 241,071 Supplemental disclosure of noncash investing and financing activities: Warrant liabilities recognized in the Business Combination — |
Business Combination (Tables)
Business Combination (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Business Combination | |
Summary of reconciliation of elements of the Business Combination to the Consolidated Statements of Cash Flows and the Consolidated Statements of Changes in Equity (Deficit) | Business ($ in thousands) Combination Cash- dMY trust and cash, net of redemptions $ 230,800 Cash- PIPE financing 160,430 Less: cash consideration paid to purchased RSI units (125,000) Less: transaction costs and advisory fees (26,467) Net proceeds from the Business Combination $ 239,763 Less: Initial fair value of Warrants recognized in the Business Combination (181,271) Less: Initial fair value of earnout interests liability recognized in the Business Combination (348,710) Add: Transaction costs allocated to Warrants (1) 3,996 Net adjustment to total equity from the Business Combination $ (286,222) (1) Transaction costs allocated to Warrants are recorded to Change in Fair Value of Warrant Liabilities in the Company’s consolidated statements of operations and comprehensive income (loss). |
Summary of number of shares of common stock issued immediately following the consummation of the Business Combination | Number of Shares Common stock, outstanding prior to Business Combination 23,000,000 Less: redemption of dMY shares (485) Common stock of dMY 22,999,515 dMY sponsor shares (1) 5,750,000 Shares issued in PIPE financing 16,043,002 Class A shares issued in the Business Combination 44,792,517 Class V shares issued to holders of retained RSI units (2)(3) 160,000,000 Total shares of common stock issued in the Business Combination 204,792,517 (1) Includes 1,212,813 shares of Class A Common Stock placed into escrow subject to the achievement of certain earnout targets pursuant to the Business Combination Agreement. (2) Includes 15,000,000 shares of Class V Common Stock placed into escrow subject to the achievement of certain earnout targets pursuant to the Business Combination Agreement. (3) The Class V Common Stock entitle its holder to one vote per share but not any rights to dividends or distributions. Each share of Class V Common Stock is issued to the Sellers for each Retained RSILP Unit retained by the Seller. |
Property and Equipment (Tables)
Property and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Property and Equipment | |
Schedule of Property and equipment, net | Property and equipment, net consists of the following: Useful Life December 31, ($ in thousands) (Years) 2020 2019 Computer equipment and software 3-5 $ 3,412 $ 2,247 Furniture 4 329 — Leasehold improvements 4 472 — Construction in progress N/A — 40 Total property and equipment 4,213 2,287 Less: accumulated depreciation (2,197) (1,706) Property and equipment, net $ 2,016 $ 581 |
License Fees, Net (Tables)
License Fees, Net (Tables) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2021 | Dec. 31, 2020 | |
License Fees, Net | ||
Schedule of license fees, net | The Company has the following intangible assets, net as of March 31, 2021 and December 31, 2020: Weighted Average Remaining Gross Amortization Carrying Accumulated ($in thousands) Period Amount Amortization Net License Fees March 31, 2021 7.86 years $ 14,675 $ (3,955) $ 10,720 December 31, 2020 8.03 years $ 13,225 $ (3,475) $ 9,750 Internally Developed Software March 31, 2021 2.95 years $ 909 $ (17) $ 892 December 31, 2020 — — — — | The table below provides a summary of the license fees as of December 31, 2020 and 2019, respectively: Weighted Average Remaining Gross Amortization Period Carrying Accumulated ($ in thousands) (years) Amount Amortization Net December 31, 2020 8.03 $ 13,225 $ (3,475) $ 9,750 December 31, 2019 8.82 $ 8,854 $ (1,897) $ 6,957 |
Schedule of estimated future amortization of license fees | At December 31, 2020, estimated future amortization of license fees is as follows ($ in thousands): ($ in thousands) Year ended December 31, 2021 $ 1,614 Year ended December 31, 2022 1,468 Year ended December 31, 2023 1,467 Year ended December 31, 2024 1,080 Year ended December 31, 2025 977 Thereafter 3,144 Total $ 9,750 |
Accrued Expenses and Other Cu_5
Accrued Expenses and Other Current Liabilities (Tables) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2021 | Dec. 31, 2020 | |
Accrued Expenses and Other Current Liabilities | ||
Schedule of Accrued Expenses and Other Current Liabilities | March 31, December 31, ($in thousands) 2021 2020 Accrued compensation and related expenses $ 2,735 $ 1,948 Accrued operating expenses 9,508 7,006 Accrued marketing expenses 19,942 12,093 Jackpot liability 1,052 721 Income tax payable 2,674 1,983 Other 1,930 2,244 Total accrued expenses and other current liabilities $ 37,841 $ 25,995 | December 31, 2020 2019 ($ in thousands) Accrued compensation and related expenses $ 2,821 $ 530 Accrued operating expenses 7,006 3,422 Accrued marketing expenses 12,093 5,396 Income tax payable 1,983 13 Other 2,092 309 Total accrued expenses and other current liabilities $ 25,995 $ 9,670 |
Share-Based Compensation (Tab_2
Share-Based Compensation (Tables) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2021 | Dec. 31, 2020 | |
Share-Based Compensation | ||
Schedule of unit's activity | Number of Units Unvested balance at December 31, 2018 — Granted 4,475,029 Vested (3,952,943) Unvested balance at December 31, 2019 522,086 Granted 683,889 Vested (1,205,975) Unvested balance at December 31, 2020 — | |
Schedule of unit activity | Restricted stock unit (“RSU”) activity for the three months ended March 31, 2021 is as follows: Weighted average Number of units grant price Unvested balance at December 31, 2020 — $ — Granted 3,647,504 15.85 Vested (719,479) 15.85 Unvested balance at March 31, 2021 2,928,025 $ 15.85 | |
Summary of share-based compensation expense | Share-based compensation expense for the three months ended March 31, 2021 and 2020 is as follows: Three months ended March 31, ($in thousands) 2021 2020 Costs of revenue $ 915 $ — Advertising and promotions 1,698 — General administration and other 8,963 13,490 Total share-based compensation expense $ 11,576 $ 13,490 | |
Schedule of assumptions used for determination of fair value of unit | The fair value for both the Common A‑2 Units and the Common B‑1 Units was determined using the Black-Scholes-Merton pricing model with the following assumptions: December 29, December 31, 2020 2019 Dividend yield — — Volatility factor 45 % 45 % Risk-free interest rate 0.12 % 1.69 % Time to liquidity (in years) — 5.0 Lack of marketability discount % 33.0 % |
Revenue Recognition (Tables)
Revenue Recognition (Tables) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2021 | Dec. 31, 2020 | |
Revenue Recognition | ||
Summary of disaggregation of revenue | Disaggregation of revenue for the three months ended March 31, 2021 and 2020, is as follows: Three months ended March 31, ($in thousands) 2021 2020 Online casino and online sports betting $ 109,978 $ 34,480 Retail sports betting 627 213 Social gaming 1,215 484 Total revenue $ 111,820 $ 35,177 | Years Ended December 31, ($ in thousands) 2020 2019 Online casino and online sports betting $ 273,761 $ 61,268 Retail sports betting 1,205 1,053 Social gaming 3,534 1,346 Total revenue $ 278,500 $ 63,667 |
Summary of revenue by geographic region | Revenue by geographic region for the three months ended March 31, 2021 and 2020, is as follows: Three months ended March 31, ($in thousands) 2021 2020 United States $ 105,303 $ 32,883 Colombia 6,517 2,294 Total revenue $ 111,820 $ 35,177 | Years Ended December 31, ($ in thousands) 2020 2019 United States $ 263,214 $ 59,572 Colombia 15,286 4,095 Total revenue $ 278,500 $ 63,667 |
Summary of deferred revenue balances | Three months ended March 31, ($in thousands) 2021 2020 Deferred revenue, beginning of period $ 1,797 $ 321 Deferred revenue, end of period 2,163 95 Revenue recognized in the period from amounts included in deferred revenue at the beginning of the period 608 321 | Years Ended December 31, ($ in thousands) 2020 2019 Deferred revenue, beginning of period $ 321 $ 129 Deferred revenue, end of period 1,797 321 Revenue recognized in the period from amounts included in deferred revenue at the beginning of the period 321 129 |
Income Taxes (Tables)_2
Income Taxes (Tables) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2021 | Dec. 31, 2020 | |
Income Taxes | ||
Summary of components of the income tax (benefit) expenses | Income Tax Provision for the three months ended March 31, 2021 and 2020 is as follows: Three months ended March 31, ($in thousands) 2021 2020 Income tax provision $ 804 $ — | Year Ended December 31, 2020 2019 Current income taxes: Federal $ — $ — State and local — — Foreign 2,708 — 2,708 — Deferred income taxes: Federal — — State and local — — Foreign 211 — 211 — Income tax (benefit) expense $ 2,919 $ — |
Summary of reconciliations of income tax expense computed at the U.S. federal statutory income tax rate to the recognized income tax expense and the U.S. statutory income tax rate to our effective tax rates | Year Ended December 31, 2020 2019 (Restated) Net loss before income taxes $ (128,726) $ (22,450) Less: net loss before Reverse Recapitalization (133,404) (22,450) Less: net income before income taxes attributable to non-controlling interest 3,597 — Net income attributable to Rush Street Interactive Inc. before income taxes 1,081 — Income tax expense (benefit) at the federal statutory rate 227 — State income taxes, net of federal benefit 100 — Foreign operations 2,919 — Change in valuation allowance (327) — Income tax (benefit) expense $ 2,919 $ — | |
Summary of significant components of the deferred tax assets and liabilities | Year Ended December 31, 2020 2019 Deferred tax assets: (Restated) Investment in subsidiaries $ 127,171 $ — Net operating losses 136 — Imputed interest 1,202 — Other assets 39 — Total gross deferred tax assets 128,548 — Valuation allowance (128,511) — Total deferred tax assets, net of valuation allowance 37 — Deferred tax liabilities: Investment in subsidiaries — — Total gross deferred tax liabilities — — Net deferred tax assets $ 37 $ — |
Earnings (Loss) Per Share (Tabl
Earnings (Loss) Per Share (Tables) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2021 | Dec. 31, 2020 | |
Loss Per Share | ||
Summary of computation of loss per share attributable to RSI and weighted-average shares of the Company's Class A common stock outstanding | The basic and diluted loss per share for the three months ended March 31, 2021 are as follows (amounts in thousands, except for share and per share amounts): Numerator: Net loss $ (76) Less: Net loss attributable to noncontrolling interests (59) Net loss attributable to Rush Street Interactive, Inc. – basic $ (17) Effect of dilutive securities: Warrants, net of amounts attributable to noncontrolling interests (9,569) Net loss attributable to Rush Street Interactive, Inc. – diluted $ (9,586) Denominator: Weighted average common shares outstanding – basic 46,955,262 Weighted average effect of dilutive securities: Public Warrants (1) 3,770,106 Private Placement and Working Capital Warrants (1) 2,690,120 Weighted average common shares outstanding – diluted 53,415,488 Net loss per Class A common share – basic $ (0.00) Net loss per Class A common share – diluted $ (0.18) (1) Calculated using the treasury stock method. | The computation of net earnings per share attributable to RSI and weighted-average shares of the Company’s Class A Common Stock outstanding for the year ended December 31, 2020 are as follows (amounts in thousands, except for share and per share amounts): Numerator: Net loss $ (131,645) Less: Net loss attributable to RSILP prior to the Business Combination (136,323) Less: Net income attributable to noncontrolling interests after the Business Combination 3,597 Net income attributable to Rush Street Interactive, Inc. – basic $ 1,081 Effect of dilutive securities: Public, Private Placement and Working Capital Warrants, net of amounts attributable to noncontrolling interests (1,656) Net loss attributable to Rush Street Interactive, Inc. – diluted $ (575) Denominator: Weighted average common shares outstanding – basic 43,579,704 Weighted average effect of dilutive securities: Public Warrants (1) Private Placement and Working Capital Warrants (1) Weighted average common shares outstanding - diluted Net income per Class A common share – basic $ Net loss per Class A common share – diluted $ (0.01) (1) Calculated using the treasury stock method. |
Summary of securities excluded from computation of diluted shares outstanding, as their effect would have been anti-dilutive | The Company excluded the following securities from its computation of diluted shares outstanding, as their effect would have been anti-dilutive: RSILP Units (1) 160,000,000 Unvested Restricted Stock Units 2,928,025 (1) These RSILP Units are held by the Sellers pursuant to the Business Combination, and may be exchanged, subject to certain restrictions, for Class A Common Stock. Upon exchange of an RSILP Unit, a share of Class V Common Stock is cancelled. | The Company excluded the following securities from its computation of diluted shares outstanding, as their effect would have been anti-dilutive: RSILP Units (1) 160,000,000 Earnout Interests – Class A Common Stock (2) 1,212,813 (1) These RSILP Units are held by the Sellers, pursuant to the Business Combination, and may be exchanged, subject to certain restrictions, for Class A Common Stock. Upon exchange of an RSILP Unit, a share of Class V Common Stock is cancelled. These amounts include 15,000,000 RSILP Units issued to the Sellers in the Business Combination that remain subject to certain restrictions pending the achievement (if any) of certain earnout targets. (2) These Earnout Interests represent the Class A common shares held by the Founder Holders pursuant to the Business Combination. |
Operating Leases (Tables)
Operating Leases (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Operating Leases | |
Schedule of components of lease expense | Year Ended ($ in thousands) December 31, 2020 Operating lease cost $ 252 Variable lease cost 132 Total lease expenses $ 384 |
Summary of quantitative information about operating leases | Year Ended ($ in thousands) December 31, 2020 Operating cash flows from operating leases $ 253 Right-of-use assets obtained in exchange for new or modified operating lease liabilities $ 1,305 Weighted-average remaining lease term (in years) 2.6 Weighted-average discount rate – operating leases 6.0 % |
Schedule of future minimum payments under ASC 842 | Maturity of lease liabilities as of December 31, 2020 are as follows ($ in thousands): ($ in thousands) Year ending December 31, 2021 $ 322 Year ending December 31, 2022 337 Year ending December 31, 2023 355 Year ending December 31, 2024 233 Year ending December 31, 2025 114 Total undiscounted future cash flows 1,361 Less: present value discount (156) Operating lease liabilities $ 1,205 |
Schedule of future minimum payments under the non-cancelable operating leases | Future minimum payments under operating leases as of December 31, 2019 were as follows ($ in thousands): Year ending December 31, 2020 $ 239 Year ending December 31, 2021 249 Year ending December 31, 2022 264 Year ending December 31, 2023 239 Year ending December 31, 2024 100 Total $ 1,091 |
Commitments and Contingencies_4
Commitments and Contingencies (Tables) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2021 | Dec. 31, 2020 | |
Commitments and Contingencies | ||
Schedule of future minimum payments under the non-cancelable terms of contracts | The Company is a party to several non-cancelable contracts with vendors and licensors for marketing and other strategic partnership related agreements where the Company is obligated to make future minimum payments under the non-cancelable terms of these contracts as follows ($ in thousands): From April 1, 2021 to December 31, 2021 $ 9,234 Year ending December 31, 2022 6,367 Year ending December 31, 2023 2,706 Year ending December 31, 2024 1,514 Year ending December 31, 2025 10,537 Thereafter 24,577 Total (1) $ 54,935 (1) Includes operating lease obligations under non-cancelable lease contracts totaling $1.3 million, obligations under non-cancelable contracts with marketing vendors totaling $17.3 million, license and market access commitments totaling $36.2 million and other non-cancelable costs totaling $0.1 million. | The Company is a party to several non-cancelable contracts with vendors and licensors for marketing and other strategic partnership related agreements where the Company is obligated to make future minimum payments under the non-cancelable terms of these contracts as follows ($ in thousands): Year ending December 31, 2021 $ 14,598 Year ending December 31, 2022 6,065 Year ending December 31, 2023 2,684 Year ending December 31, 2024 1,513 Year ending December 31, 2025 10,537 Thereafter 24,577 Total $ 59,974 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2021 | Dec. 31, 2020 | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Schedule of financial liabilities subject to fair value measurements on a recurring basis | The Company’s financial liabilities subject to fair value measurements on a recurring basis and the level of inputs used for such measurements were as follows (amounts in thousands): Fair Value Measured as of December 31, 2020 Level 1 Level 2 Level 3 Total Public warrants (Restated) $ 88,079 $ — $ — $ 88,079 Private warrants (Restated) — 82,030 82,030 Earnout interests liability 351,048 351,048 Total fair value (Restated) $ 88,079 $ — $ 433,078 $ 521,157 | |
Schedule of range and weighted-average of the significant unobservable inputs used to fair value Level 3 recurring liabilities along with the valuation techniques used | March 26, 2021 December 31, 2020 Exercise price $ 11.50 $ 11.50 Stock price $ 15.96 $ 22.76 Volatility 42.6 % 41.4 % Term (years) 4.77 5.0 Risk-free interest rate 0.76 % 0.37 % | Observable (O) or Fair Value Valuation Unobservable (U) Range (in thousands) Technique Input (Weighted-Average) Earnout interests liability $ 351,048 Option pricing model Share price (O) $21.51 - $21.65 Volatility (U) 54.6% Term (U) 2.99 years Risk-free rate (O) 0.17% |
Private Warrants | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Schedule of range and weighted-average of the significant unobservable inputs used to fair value Level 3 recurring liabilities along with the valuation techniques used | December 29, December 31, 2020 2020 Exercise price $ 11.50 $ 11.50 Stock price $ 21.65 $ 22.76 Volatility 41.4 % 41.4 % Term (years) 5.0 5.0 Risk-free interest rate 0.36 % 0.37 % |
Description of Business (Deta_2
Description of Business (Details) | Mar. 31, 2021 | Dec. 31, 2020 |
Sellers | ||
Description of Business | ||
Percentage of interest holding | 73.00% | |
RSILP | ||
Description of Business | ||
Percentage of common units acquired | 23.10% | 23.10% |
RSILP | ||
Description of Business | ||
Percentage of common units retained by sellers | 73.00% | |
Percentage of interest holding | 27.00% | |
RSILP | Sellers | ||
Description of Business | ||
Percentage of common units retained by sellers | 76.90% | 76.90% |
Summary of Significant Accoun_7
Summary of Significant Accounting Policies - Cash and Cash Equivalents and Restricted Cash (Details) - USD ($) $ in Thousands | Mar. 31, 2021 | Dec. 31, 2020 | Mar. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Summary of Significant Accounting Policies and Recent Accounting Pronouncements | |||||
Cash and cash equivalents | $ 363,575 | $ 255,622 | $ 6,905 | ||
Restricted cash | 6,443 | 3,638 | |||
Total cash, cash equivalents and restricted cash | $ 375,143 | $ 262,065 | $ 8,409 | $ 10,543 | $ 3,233 |
Summary of Significant Accoun_8
Summary of Significant Accounting Policies - Property and Equipment, net (Details) | 12 Months Ended |
Dec. 31, 2020 | |
Software | Maximum | |
Property and equipment, net | |
Useful life of the asset | P5Y |
Software | Minimum | |
Property and equipment, net | |
Useful life of the asset | P3Y |
Furniture and fixtures | |
Property and equipment, net | |
Useful life of the asset | P4Y |
Leasehold improvements | |
Property and equipment, net | |
Useful life of the asset | P4Y |
Leasehold improvements | Maximum | |
Property and equipment, net | |
Useful life of the asset | P10Y |
Leasehold improvements | Minimum | |
Property and equipment, net | |
Useful life of the asset | P1Y |
Summary of Significant Accoun_9
Summary of Significant Accounting Policies - Additional Information (Details) | Dec. 29, 2020 | Mar. 31, 2021USD ($)$ / sharesshares | Mar. 31, 2020USD ($) | Dec. 31, 2020USD ($)segment$ / sharesshares | Dec. 31, 2019USD ($) | Mar. 26, 2021shares | Feb. 22, 2021$ / shares | Jan. 01, 2020USD ($) |
Allowance for doubtful accounts | $ | $ 0 | |||||||
Number of operating segments | segment | 1 | |||||||
Operating lease right-of-use asset, net | $ | $ 1,033,000 | $ 1,100,000 | $ 0 | |||||
Estimated redemption rate | 5.00% | |||||||
Operating liabilities | $ | $ 1,205,000 | |||||||
Earnout interests liability | $ | 351,048,000 | 0 | ||||||
Operating cash flows | $ | $ (11,232,000) | $ (3,037,000) | 16,179,000 | $ (2,459,000) | ||||
Working capital deficit | $ | $ 106,500,000 | |||||||
IPO | ||||||||
Number of units issued | 23,000,000 | |||||||
Number of shares in a unit | 1 | |||||||
Number of warrants in a unit | 1 | |||||||
Price per unit | $ / shares | $ 10 | |||||||
Public Warrants | ||||||||
Number of shares issuable per warrant | 11,442,389 | |||||||
Exercise price of warrants | $ / shares | $ 11.50 | $ 11.50 | ||||||
Number of warrants issued | 11,500,000 | |||||||
Number of Warrants outstanding | 0 | 18,175,000 | ||||||
Public Warrants | IPO | ||||||||
Number of shares issuable per warrant | 1 | |||||||
Exercise price of warrants | $ / shares | $ 11.50 | $ 11.50 | ||||||
Private Warrants | ||||||||
Number of Warrants outstanding | 6,675,000 | |||||||
Private Placement Warrants | ||||||||
Number of shares issuable per warrant | 6,600,000 | 2,571,808 | ||||||
Number of Warrants outstanding | 0 | |||||||
Working Capital Warrants | ||||||||
Number of warrants issued | 75,000 | |||||||
RSILP | Special Limited Partner | ||||||||
Percentage of net income tax savings, entitled to pay | 85.00% | |||||||
Class A Common Stock | ||||||||
Minimum Percentage of Stockholders Holding | 50.00% | |||||||
Adjustment | ASU 2016-02 | ||||||||
Operating lease right-of-use asset, net | $ | $ 200,000 | |||||||
Operating liabilities | $ | $ 200,000 |
Restatement of Consolidated F_3
Restatement of Consolidated Financial Statements - Consolidated balance sheet (Details) - USD ($) $ in Thousands | Mar. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
CONDENSED CONSOLIDATED BALANCE SHEETS | |||
Warrant liabilities | $ 170,109 | $ 0 | |
Total liabilities | $ 64,037 | 575,889 | 28,861 |
Additional paid-in-capital | 142,835 | (18,402) | 0 |
Accumulated deficit | (43,507) | (43,490) | 0 |
Total stockholders' deficit attributed to Rush Street Interactive, Inc. | 98,450 | (61,779) | 0 |
Noncontrolling interests | $ 266,315 | (205,550) | $ 0 |
Restatement of warrants as derivative liabilities | |||
CONDENSED CONSOLIDATED BALANCE SHEETS | |||
Warrant liabilities | 170,109 | ||
Total liabilities | 575,889 | ||
Additional paid-in-capital | (18,402) | ||
Accumulated deficit | (43,490) | ||
Total stockholders' deficit attributed to Rush Street Interactive, Inc. | (61,779) | ||
Noncontrolling interests | (205,550) | ||
Total deficit | (267,329) | ||
Restatement of warrants as derivative liabilities | As Previously Reported | |||
CONDENSED CONSOLIDATED BALANCE SHEETS | |||
Total liabilities | 405,780 | ||
Additional paid-in-capital | 22,566 | ||
Accumulated deficit | (45,146) | ||
Total stockholders' deficit attributed to Rush Street Interactive, Inc. | (22,467) | ||
Noncontrolling interests | (74,753) | ||
Total deficit | (97,220) | ||
Restatement of warrants as derivative liabilities | Restatement Adjustment | |||
CONDENSED CONSOLIDATED BALANCE SHEETS | |||
Warrant liabilities | 170,109 | ||
Total liabilities | 170,109 | ||
Additional paid-in-capital | (40,968) | ||
Accumulated deficit | 1,656 | ||
Total stockholders' deficit attributed to Rush Street Interactive, Inc. | (39,312) | ||
Noncontrolling interests | (130,797) | ||
Total deficit | $ (170,109) |
Restatement of Consolidated F_4
Restatement of Consolidated Financial Statements - Consolidated statement of operations (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2021 | Mar. 31, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | |
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||||
Revenue | $ 111,820 | $ 35,177 | $ 278,500 | $ 63,667 |
Loss from operations | (27,321) | (12,898) | (133,419) | (22,327) |
Change in fair value of warrant liabilities | (41,800) | 7,166 | 0 | |
Total other income (expenses) | 28,049 | (45) | 4,693 | (123) |
Loss before income taxes | 728 | (12,943) | (128,726) | (22,450) |
Income tax expense | 804 | 2,919 | 0 | |
Net loss | (76) | (12,943) | (131,645) | (22,450) |
Net loss attributable to non-controlling interests | 59 | (132,726) | 0 | |
Net income (loss) attributable to Rush Street Interactive, Inc. | $ (17) | (12,943) | $ 1,081 | (22,450) |
Net income (loss) per common share attributable to Rush Street Interactive, Inc. - Basic | $ 0 | $ 0.02 | ||
Weighted-average common shares outstanding - Basic | 46,955,262 | 43,579,704 | ||
Net loss per common share attributable to Rush Street Interactive, Inc. - Diluted | $ (0.18) | $ (0.01) | ||
Weighted-average common shares outstanding - Diluted | 53,415,488 | 52,242,606 | ||
Comprehensive loss | $ 700 | 13,307 | $ (131,121) | (22,440) |
Comprehensive loss attributable to non-controlling interests | 540 | (132,202) | 0 | |
Comprehensive loss attributable to Rush Street Interactive, Inc. | $ 160 | $ 13,307 | 1,081 | $ (22,440) |
Restatement Adjustment | ||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||||
Change in fair value of warrant liabilities | 7,166 | |||
Total other income (expenses) | 7,166 | |||
Loss before income taxes | 7,166 | |||
Net loss | 7,166 | |||
Net loss attributable to non-controlling interests | 5,510 | |||
Net income (loss) attributable to Rush Street Interactive, Inc. | 1,656 | |||
Comprehensive loss | 7,166 | |||
Comprehensive loss attributable to non-controlling interests | 5,510 | |||
Comprehensive loss attributable to Rush Street Interactive, Inc. | 1,656 | |||
Restatement of warrants as derivative liabilities | ||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||||
Revenue | 278,500 | |||
Loss from operations | (133,419) | |||
Change in fair value of warrant liabilities | 7,166 | |||
Total other income (expenses) | 4,693 | |||
Loss before income taxes | (128,726) | |||
Income tax expense | 2,919 | |||
Net loss | (131,645) | |||
Net loss attributable to non-controlling interests | (132,726) | |||
Net income (loss) attributable to Rush Street Interactive, Inc. | $ 1,081 | |||
Net income (loss) per common share attributable to Rush Street Interactive, Inc. - Basic | $ 0.02 | |||
Weighted-average common shares outstanding - Basic | 43,579,704 | |||
Net loss per common share attributable to Rush Street Interactive, Inc. - Diluted | $ (0.01) | |||
Weighted-average common shares outstanding - Diluted | 52,242,606 | |||
Comprehensive loss | $ (131,121) | |||
Comprehensive loss attributable to non-controlling interests | (132,202) | |||
Comprehensive loss attributable to Rush Street Interactive, Inc. | 1,081 | |||
Restatement of warrants as derivative liabilities | As Previously Reported | ||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||||
Revenue | 278,500 | |||
Loss from operations | (133,419) | |||
Total other income (expenses) | (2,473) | |||
Loss before income taxes | (135,892) | |||
Income tax expense | 2,919 | |||
Net loss | (138,811) | |||
Net loss attributable to non-controlling interests | (138,236) | |||
Net income (loss) attributable to Rush Street Interactive, Inc. | $ (575) | |||
Net income (loss) per common share attributable to Rush Street Interactive, Inc. - Basic | $ (0.01) | |||
Weighted-average common shares outstanding - Basic | 43,579,704 | |||
Net loss per common share attributable to Rush Street Interactive, Inc. - Diluted | $ (0.01) | |||
Weighted-average common shares outstanding - Diluted | 43,579,704 | |||
Comprehensive loss | $ (138,287) | |||
Comprehensive loss attributable to non-controlling interests | (137,712) | |||
Comprehensive loss attributable to Rush Street Interactive, Inc. | (575) | |||
Restatement of warrants as derivative liabilities | Restatement Adjustment | ||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||||
Net loss | $ 7,166 |
Restatement of Consolidated F_5
Restatement of Consolidated Financial Statements - Consolidated statement of cash flows (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2021 | Mar. 31, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | |
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||||
Net loss | $ (76) | $ (12,943) | $ (131,645) | $ (22,450) |
Net cash provided by (used in) operating activities | (11,232) | (3,037) | 16,179 | (2,459) |
Net cash used in investing activities | (3,056) | (1,377) | (6,243) | (5,770) |
Net cash provided by financing activities | $ 127,982 | $ 2,650 | 241,071 | $ 15,545 |
Supplemental disclosure of noncash investing and financing activities: | ||||
Warrant liabilities recognized in the Business Combination | 181,271 | |||
Restatement Adjustment | ||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||||
Net loss | 7,166 | |||
Restatement of warrants as derivative liabilities | ||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||||
Net loss | (131,645) | |||
Adjustment to reconcile net loss to net cash provided by (used in) operating activities | 147,824 | |||
Net cash provided by (used in) operating activities | 16,179 | |||
Net cash used in investing activities | (6,243) | |||
Net cash provided by financing activities | 241,071 | |||
Supplemental disclosure of noncash investing and financing activities: | ||||
Warrant liabilities recognized in the Business Combination | 181,271 | |||
Restatement of warrants as derivative liabilities | As Previously Reported | ||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||||
Net loss | (138,811) | |||
Adjustment to reconcile net loss to net cash provided by (used in) operating activities | 154,990 | |||
Net cash provided by (used in) operating activities | 16,179 | |||
Net cash used in investing activities | (6,243) | |||
Net cash provided by financing activities | 241,071 | |||
Restatement of warrants as derivative liabilities | Restatement Adjustment | ||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||||
Net loss | 7,166 | |||
Adjustment to reconcile net loss to net cash provided by (used in) operating activities | (7,166) | |||
Supplemental disclosure of noncash investing and financing activities: | ||||
Warrant liabilities recognized in the Business Combination | $ 181,271 |
Business Combination (Details)
Business Combination (Details) $ / shares in Units, $ in Thousands | Dec. 29, 2020USD ($)$ / sharesshares | Mar. 31, 2021$ / shares | Dec. 31, 2020$ / shares | Dec. 31, 2019$ / shares |
Class A Common Stock | ||||
Business Acquisition [Line Items] | ||||
Common stock, par value | $ / shares | $ 0.0001 | $ 0.0001 | $ 0.0001 | |
Class V common stock | ||||
Business Acquisition [Line Items] | ||||
Common stock, par value | $ / shares | $ 0.0001 | $ 0.0001 | $ 0.0001 | |
RSILP | ||||
Business Acquisition [Line Items] | ||||
Contribution amount | $ | $ 239,763 | |||
Redemption of shares | 485 | |||
Aggregate amount of consideration paid to purchase units | $ | $ 125,000 | |||
Issued units | 204,792,517 | |||
Number of shares held by Founder Holders | 1,212,813 | |||
Number of units issued to the entity | 1,212,813 | |||
RSILP | Special Limited Partner | ||||
Business Acquisition [Line Items] | ||||
Percentage of net income tax savings, entitled to pay | 85.00% | |||
RSILP | Sellers | ||||
Business Acquisition [Line Items] | ||||
Aggregate purchase price | $ | $ 160,400 | |||
Aggregate amount of consideration paid to purchase units | $ | $ 125,000 | |||
Purchased units | 12,500,000 | |||
Issued units | 32,292,517 | |||
Number of units retained by seller | 160,000,000 | |||
Earnout interests retained by seller | 15,000,000 | |||
Earnout interests issued | 15,000,000 | |||
Threshold period for Sellers to have the right to exchange Retained units | 6 months | |||
Number of shares per unit | 1 | |||
Cash equivalent to market value of number of share of common stock | 1 | |||
Number of shares cancelled per unit exchanged | 1 | |||
RSILP | Sellers | Special Limited Partner | ||||
Business Acquisition [Line Items] | ||||
Purchased Units Cash Consideration | $ | $ 125,000 | |||
RSILP | Class A Common Stock | ||||
Business Acquisition [Line Items] | ||||
Number of shares issued | 16,043,002 | |||
Purchase price per share | $ / shares | $ 10 | |||
Aggregate purchase price | $ | $ 160,400 | |||
Share conversion ratio | 1 | |||
Shares issued upon conversion | 5,750,000 | |||
Issued units | 44,792,517 | |||
RSILP | Class V common stock | ||||
Business Acquisition [Line Items] | ||||
Number of shares issued | 160,000,000 | |||
Issued units | 160,000,000 | |||
Common stock, par value | $ / shares | $ 0.0001 | |||
Earnout interests issued | 15,000,000 | |||
RSILP | Class V common stock | Sellers | ||||
Business Acquisition [Line Items] | ||||
Earnout interests issued | 15,000,000 |
Business Combination - Reconcil
Business Combination - Reconciliation of elements of Business Combination to Cash Flows (Details) - USD ($) $ in Thousands | Dec. 29, 2020 | Mar. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Business Acquisition [Line Items] | ||||
Less: Initial fair value of Warrants recognized in the Business Combination | $ (41,800) | $ 7,166 | $ 0 | |
Less: Initial fair value of earnout interests liability recognized in the Business Combination | (348,710) | |||
Net adjustment to total equity from the Business Combination and PIPE financing | $ (286,222) | |||
RSILP | ||||
Business Acquisition [Line Items] | ||||
Cash- DMYT trust and cash, net of redemptions | $ 230,800 | |||
Cash- PIPE financing | 160,430 | |||
Less: cash consideration paid to purchased RSI units | (125,000) | |||
Less: transaction costs and advisory fees | (26,467) | |||
Net proceeds from the Business Combination and PIPE financing | 239,763 | |||
Less: Initial fair value of Warrants recognized in the Business Combination | 181,271 | |||
Less: Initial fair value of earnout interests liability recognized in the Business Combination | (348,710) | |||
Add: Transaction costs allocated to Warrants(1) | 3,996 | |||
Net adjustment to total equity from the Business Combination and PIPE financing | $ (286,222) |
Business Combination - Number o
Business Combination - Number of shares of common stock issued (Details) $ / shares in Units, $ in Millions | Jan. 13, 2021D$ / sharesshares | Dec. 29, 2020USD ($)VoteD$ / sharesshares | Dec. 31, 2020shares | Mar. 31, 2021shares | Dec. 28, 2020shares | Dec. 31, 2019shares |
Business Acquisition [Line Items] | ||||||
Number of trading days to calculate VWAPs | D | 10 | |||||
Number of consecutive trading days to calculate VWAPs | D | 20 | |||||
VWAP exceeded by company | $ / shares | $ 14 | |||||
Subsequent event | ||||||
Business Acquisition [Line Items] | ||||||
Number of trading days to calculate VWAPs | D | 10 | |||||
Number of consecutive trading days to calculate VWAPs | D | 20 | |||||
VWAP exceeded by company | $ / shares | $ 14 | |||||
Class A Common Stock | ||||||
Business Acquisition [Line Items] | ||||||
Common stock, outstanding prior to Business Combination | 44,792,517 | 59,159,364 | 0 | |||
Shares placed in escrow subject to the achievement of certain earnout targets | 1,212,813 | |||||
Number of shares reclassed to equity | 1,212,813 | |||||
Class A Common Stock | Subsequent event | ||||||
Business Acquisition [Line Items] | ||||||
Number of shares reclassed to equity | 1,212,813 | |||||
Class V common stock | ||||||
Business Acquisition [Line Items] | ||||||
Common stock, outstanding prior to Business Combination | 160,000,000 | 160,000,000 | 0 | |||
Shares placed in escrow subject to the achievement of certain earnout targets | 15,000,000 | |||||
Number of shares reclassed to equity | 15,000,000 | |||||
Class V common stock | Subsequent event | ||||||
Business Acquisition [Line Items] | ||||||
Number of shares reclassed to equity | 15,000,000 | |||||
RSILP | ||||||
Business Acquisition [Line Items] | ||||||
Less: redemption of DMYT shares | (485) | |||||
Shares Issued In Business Combination And Private Investment in Public Equity | 204,792,517 | |||||
Threshold period for change of control | 3 years | |||||
Threshold period for achieving certain volume weighted average share prices | 3 years | |||||
Number of trading days to calculate VWAPs | D | 10 | |||||
Number of consecutive trading days to calculate VWAPs | D | 20 | |||||
RSILP | VWAP of $12.00 | ||||||
Business Acquisition [Line Items] | ||||||
VWAP | $ / shares | $ 12 | |||||
Earnout Interests released (as a percent) | 50.00% | |||||
RSILP | VWAP of $14.00 | ||||||
Business Acquisition [Line Items] | ||||||
VWAP | $ / shares | $ 14 | |||||
Earnout Interests released (as a percent) | 100.00% | |||||
RSILP | Minimum | ||||||
Business Acquisition [Line Items] | ||||||
Percentage of Earnout Interests | 25.00% | |||||
Earnout interest based on revenue | $ | $ 270 | |||||
RSILP | Maximum | ||||||
Business Acquisition [Line Items] | ||||||
Percentage of Earnout Interests | 100.00% | |||||
Earnout interest based on revenue | $ | $ 300 | |||||
RSILP | Class A Common Stock | ||||||
Business Acquisition [Line Items] | ||||||
DMYT sponsor shares | 5,750,000 | |||||
Shares issued in PIPE financing | 16,043,002 | |||||
Shares Issued In Business Combination And Private Investment in Public Equity | 44,792,517 | |||||
Shares placed in escrow subject to the achievement of certain earnout targets | 1,212,813 | |||||
RSILP | Class A Common Stock | dMY | ||||||
Business Acquisition [Line Items] | ||||||
Common stock, outstanding prior to Business Combination | 22,999,515 | 23,000,000 | ||||
Less: redemption of DMYT shares | (485) | |||||
DMYT sponsor shares | 5,750,000 | |||||
RSILP | Class V common stock | ||||||
Business Acquisition [Line Items] | ||||||
Shares Issued In Business Combination And Private Investment in Public Equity | 160,000,000 | |||||
Shares placed in escrow subject to the achievement of certain earnout targets | 15,000,000 | 15,000,000 | ||||
Number of votes per share | Vote | 1 |
Property and Equipment (Details
Property and Equipment (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Mar. 31, 2021 | Dec. 31, 2019 | |
Property and Equipment | |||
Total property and equipment | $ 4,213 | $ 2,287 | |
Less: accumulated depreciation | (2,197) | (1,706) | |
Property and equipment, net | 2,016 | $ 2,278 | 581 |
Computer equipment and software | |||
Property and Equipment | |||
Total property and equipment | $ 3,412 | 2,247 | |
Computer equipment and software | Maximum | |||
Property and Equipment | |||
Useful Life | P5Y | ||
Computer equipment and software | Minimum | |||
Property and Equipment | |||
Useful Life | P3Y | ||
Furniture | |||
Property and Equipment | |||
Total property and equipment | $ 329 | ||
Useful Life | P4Y | ||
Leasehold improvements | |||
Property and Equipment | |||
Total property and equipment | $ 472 | ||
Useful Life | P4Y | ||
Leasehold improvements | Maximum | |||
Property and Equipment | |||
Useful Life | P10Y | ||
Leasehold improvements | Minimum | |||
Property and Equipment | |||
Useful Life | P1Y | ||
Construction in progress | |||
Property and Equipment | |||
Total property and equipment | $ 40 |
Property and Equipment - Additi
Property and Equipment - Additional Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2021 | Mar. 31, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | |
Property and Equipment | ||||
Depreciation expense | $ 674 | $ 459 | $ 490 | $ 100 |
License Fees, Net (Details)
License Fees, Net (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Mar. 31, 2021 | |
License Fees, Net | |||
Weighted Average Remaining Amortization Period (years) | 8 years 11 days | 8 years 9 months 26 days | |
Gross Carrying Amount | $ 13,225 | $ 8,854 | |
Accumulated Amortization | (3,475) | (1,897) | |
Net | $ 9,750 | $ 6,957 | $ 11,612 |
License Fees, Net - Estimated f
License Fees, Net - Estimated future amortization (Details) - USD ($) $ in Thousands | Mar. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Estimated future amortization of license fees | |||
Year ended December 31, 2021 | $ 1,614 | ||
Year ended December 31, 2022 | 1,468 | ||
Year ended December 31, 2023 | 1,467 | ||
Year ended December 31, 2024 | 1,080 | ||
Year ended December 31, 2025 | 977 | ||
Thereafter | 3,144 | ||
Total | $ 11,612 | $ 9,750 | $ 6,957 |
License Fees, Net - Additional
License Fees, Net - Additional Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2021 | Mar. 31, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | |
License Fees, Net | ||||
Amortization expense | $ 500 | $ 400 | $ 1,592 | $ 1,039 |
Accrued Expenses and Other Cu_6
Accrued Expenses and Other Current Liabilities (Details) - USD ($) $ in Thousands | Mar. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Accrued Expenses and Other Current Liabilities | |||
Accrued compensation and related expenses | $ 2,821 | $ 530 | |
Accrued operating expenses | $ 9,508 | 7,006 | 3,422 |
Accrued marketing expenses | 19,942 | 12,093 | 5,396 |
Jackpot liability | 1,052 | 721 | |
Income tax payable | 2,674 | 1,983 | 13 |
Other | 2,092 | 309 | |
Total accrued expenses and other current liabilities | $ 37,841 | $ 25,995 | $ 9,670 |
Warrant Liabilities (Details)_2
Warrant Liabilities (Details) - USD ($) $ / shares in Units, $ in Millions | 1 Months Ended | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2021 | Mar. 31, 2021 | Dec. 31, 2020 | Mar. 26, 2021 | Feb. 22, 2021 | |
Public Warrants | |||||
Debt and Equity Securities, FV-NI [Line Items] | |||||
Number of shares issuable per warrant | 11,442,389 | 11,442,389 | |||
Warrants exercise price | $ 11.50 | $ 11.50 | $ 11.50 | ||
Cash not received from proceeds of warrants | $ 0.1 | ||||
Warrants outstanding | 0 | 0 | 18,175,000 | ||
Fair value | $ 77.5 | $ 77.5 | $ 88.1 | ||
Public Warrants | dMY | |||||
Debt and Equity Securities, FV-NI [Line Items] | |||||
Number of shares issuable per warrant | 1 | ||||
Warrants exercise price | $ 11.50 | $ 11.50 | $ 11.50 | ||
Warrants outstanding | 11,500,000 | ||||
Private Placement Warrants | |||||
Debt and Equity Securities, FV-NI [Line Items] | |||||
Number of shares issuable per warrant | 6,600,000 | 2,571,808 | |||
Warrants outstanding | 0 | 0 | |||
Private Placement Warrants | dMY | |||||
Debt and Equity Securities, FV-NI [Line Items] | |||||
Number of shares in a unit | 1 | ||||
Price per unit | $ 11.50 | ||||
Number of warrants sold | 6,600,000 | 6,600,000 | |||
Warrants outstanding | 6,675,000 | ||||
Working Capital Warrants | dMY | |||||
Debt and Equity Securities, FV-NI [Line Items] | |||||
Number of warrants sold | 75,000 | 75,000 | |||
IPO | |||||
Debt and Equity Securities, FV-NI [Line Items] | |||||
Number of units issued | 23,000,000 | ||||
Number of shares in a unit | 1 | ||||
Number of warrants in a unit | 1 | ||||
Price per unit | $ 10 | ||||
IPO | dMY | |||||
Debt and Equity Securities, FV-NI [Line Items] | |||||
Number of units issued | 23,000,000 | 23,000,000 | |||
Number of shares in a unit | 1 | 1 | |||
Number of warrants in a unit | 1 | ||||
Price per unit | $ 10 | $ 10 | $ 10 | ||
IPO | Public Warrants | |||||
Debt and Equity Securities, FV-NI [Line Items] | |||||
Number of shares issuable per warrant | 1 | ||||
Warrants exercise price | $ 11.50 | $ 11.50 | $ 11.50 |
Equity (Details)_2
Equity (Details) | Dec. 29, 2020USD ($)$ / sharesshares | Mar. 31, 2021USD ($)$ / sharesshares | Dec. 31, 2020USD ($)Vote$ / sharesshares | Jan. 13, 2021 | Dec. 31, 2019USD ($)$ / shares | Dec. 19, 2019USD ($)shares |
Debt and Equity Securities, FV-NI [Line Items] | ||||||
Number of shares authorized | 951,000,000 | |||||
Sellers | RSILP | ||||||
Debt and Equity Securities, FV-NI [Line Items] | ||||||
Purchased units | 12,500,000 | |||||
Class A Common Stock | ||||||
Debt and Equity Securities, FV-NI [Line Items] | ||||||
Common stock, shares authorized | 750,000,000 | |||||
Common stock, par value | $ / shares | $ 0.0001 | $ 0.0001 | $ 0.0001 | |||
Common Stock outstanding | 44,792,517 | |||||
Earnout interests | 1,212,813 | |||||
Treasury stock repurchased | 218,589 | |||||
Treasury stock average price | $ / shares | $ 15.85 | |||||
Treasury stock of total cost | $ | $ 3,500,000 | |||||
Class A Common Stock | RSILP | ||||||
Debt and Equity Securities, FV-NI [Line Items] | ||||||
Earnout interests | 1,212,813 | |||||
Class V common stock | ||||||
Debt and Equity Securities, FV-NI [Line Items] | ||||||
Common stock, shares authorized | 200,000,000 | |||||
Common stock, par value | $ / shares | $ 0.0001 | $ 0.0001 | $ 0.0001 | |||
Common Stock outstanding | 160,000,000 | |||||
Earnout interests | 15,000,000 | |||||
Class V common stock | RSILP | ||||||
Debt and Equity Securities, FV-NI [Line Items] | ||||||
Common stock, par value | $ / shares | $ 0.0001 | |||||
Earnout interests | 15,000,000 | 15,000,000 | ||||
Consideration for shares cancelled per unit exchanged | $ | $ 0 | |||||
Common Stock | ||||||
Debt and Equity Securities, FV-NI [Line Items] | ||||||
Number of Votes per Share | Vote | 1 | |||||
Preferred stock | ||||||
Debt and Equity Securities, FV-NI [Line Items] | ||||||
Number of shares authorized | 1,000,000 | |||||
Preferred stock, shares authorized | 1,000,000 | |||||
Preferred stock, par value | $ / shares | $ 0.0001 | |||||
Number of Votes per Share | Vote | 1 | |||||
Shares of preferred stock outstanding | 0 | |||||
Common A-1 Units | RSILP | ||||||
Debt and Equity Securities, FV-NI [Line Items] | ||||||
Capital contributed | $ | $ 6,500,000 | $ 1,000,000 | ||||
RSI GP | ||||||
Debt and Equity Securities, FV-NI [Line Items] | ||||||
Capital contributed | $ | $ 14,500,000 | |||||
Special Limited Partner | RSILP | ||||||
Debt and Equity Securities, FV-NI [Line Items] | ||||||
Amount distributed to the limited partners | $ | $ 5,200,000 | |||||
Special Limited Partner | Sellers | RSILP | ||||||
Debt and Equity Securities, FV-NI [Line Items] | ||||||
Purchased Units Cash Consideration | $ | $ 125,000,000 | |||||
Special Limited Partner | Common Stock | RSILP | ||||||
Debt and Equity Securities, FV-NI [Line Items] | ||||||
Purchased Units Cash Consideration | $ | $ 125,000,000 | |||||
Special Limited Partner | Common A-1 Units | RSILP | ||||||
Debt and Equity Securities, FV-NI [Line Items] | ||||||
Purchased units | 172,500,000 | |||||
Special Limited Partner | Common B-1 Units | RSILP | ||||||
Debt and Equity Securities, FV-NI [Line Items] | ||||||
Purchased units | 12,500,000 | |||||
Members' Deficit | RSI GP | ||||||
Debt and Equity Securities, FV-NI [Line Items] | ||||||
Capital contributed | $ | $ 27,000,000 | |||||
RSILP | ||||||
Debt and Equity Securities, FV-NI [Line Items] | ||||||
Percentage of common units retained by sellers | 73.00% | |||||
RSILP | Sellers | ||||||
Debt and Equity Securities, FV-NI [Line Items] | ||||||
Percentage of common units retained by sellers | 76.90% | 76.90% | ||||
RSILP | Sellers | Earnout interests fully earned and no longer subject to restriction on transfer and voting | Maximum | ||||||
Debt and Equity Securities, FV-NI [Line Items] | ||||||
Percentage of common units retained by sellers | 78.10% |
Share-Based Compensation - In_2
Share-Based Compensation - Incentive Plan (Details) - 2020 Omnibus Equity Incentive Plan - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2020 | Mar. 31, 2021 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Number of awards granted | 0 | |
Restricted stock unit ("RSU") | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Aggregate fair value granted | $ 57.8 | |
Unrecognized stock-based compensation expense | $ 46.2 | |
Class A Common Stock | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Aggregate number of shares reserved under the Plan | 13,400,000 |
Share-Based Compensation - Assu
Share-Based Compensation - Assumptions used for determination of fair value of unit (Details) | Dec. 29, 2020 | Dec. 31, 2020 | Dec. 31, 2019 |
Share-Based Compensation | |||
Dividend yield | 0.00% | ||
Volatility factor | 45.00% | 45.00% | |
Risk-free interest rate | 0.12% | 1.69% | |
Time to liquidity (in years) | 0 years | 5 years | |
Lack of marketability discount | 0.00% | 33.00% |
Share-Based Compensation - Addi
Share-Based Compensation - Additional Information (Details) - USD ($) | 3 Months Ended | 12 Months Ended | |||
Mar. 31, 2021 | Mar. 31, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 29, 2020 | |
Share-Based Compensation | |||||
Number of units granted | 10 | 10 | |||
Dividend yield | 0.00% | ||||
2020 Omnibus Equity Incentive Plan | |||||
Share-Based Compensation | |||||
Share-based compensation expense related to profit interests | $ 11,576,000 | $ 13,490,000 | |||
2020 Omnibus Equity Incentive Plan | Restricted stock unit ("RSU") | |||||
Share-Based Compensation | |||||
Number of units granted | 3,647,504 | ||||
Number of units vested | 719,479 | ||||
Number of units unvested | 2,928,025 | 0 | |||
Weighted average remaining service period | 3 years 8 months 27 days | ||||
Aggregate fair value granted | $ 57,800,000 | ||||
Common A-2 Units | |||||
Share-Based Compensation | |||||
Profit interests issued in units | 414,894 | 2,714,850 | |||
Participation threshold amount for issuance of profits | $ 0 | $ 0 | |||
Share-based compensation expense related to profit interests | $ 1,700,000 | $ 6,100,000 | |||
Common B-1 Units | |||||
Share-Based Compensation | |||||
Profit interests issued in units | 683,889 | 4,475,029 | |||
Number of units granted | 683,889 | 4,475,029 | |||
Fair value per share | $ 1.84 | $ 29.15 | |||
Number of units vested | 1,205,975 | 3,952,943 | |||
Number of units unvested | 522,086 | ||||
Share-based compensation expense related to profit interests | $ 143,000,000 | $ 7,300,000 |
Share-Based Compensation - Un_2
Share-Based Compensation - Unit's activity (Details) - $ / shares | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Share-Based Compensation | |||
Granted | 10 | 10 | |
Restricted stock unit ("RSU") | 2020 Omnibus Equity Incentive Plan | |||
Share-Based Compensation | |||
Unvested balance | 0 | ||
Granted | 3,647,504 | ||
Unvested balance | 2,928,025 | 0 | |
Vested | (719,479) | ||
Weighted average grant price | |||
Unvested balance | $ 0 | ||
Granted | 15.85 | ||
Vested | 15.85 | ||
Unvested balance | $ 15.85 | $ 0 | |
Common B-1 Units | |||
Share-Based Compensation | |||
Unvested balance | 522,086 | ||
Granted | 683,889 | 4,475,029 | |
Unvested balance | 522,086 | ||
Vested | (1,205,975) | (3,952,943) |
Revenue Recognition (Details)
Revenue Recognition (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2021 | Mar. 31, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | |
Disaggregation of Revenue [Line Items] | ||||
Total revenue | $ 111,820 | $ 35,177 | $ 278,500 | $ 63,667 |
Online casino and online sports betting | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 109,978 | 34,480 | 273,761 | 61,268 |
Retail sports betting | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 627 | 213 | 1,205 | 1,053 |
Social gaming services | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | $ 1,215 | $ 484 | $ 3,534 | $ 1,346 |
Revenue Recognition - Geograp_2
Revenue Recognition - Geographic region (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2021 | Mar. 31, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | |
Disaggregation of Revenue [Line Items] | ||||
Total revenue | $ 111,820 | $ 35,177 | $ 278,500 | $ 63,667 |
United States | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 105,303 | 32,883 | 263,214 | 59,572 |
Colombia | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | $ 6,517 | $ 2,294 | $ 15,286 | $ 4,095 |
Revenue Recognition - Deferre_2
Revenue Recognition - Deferred revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2021 | Mar. 31, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | |
Revenue Recognition | ||||
Deferred revenue, beginning of period | $ 1,797 | $ 321 | $ 321 | $ 129 |
Deferred revenue, end of period | 2,163 | 95 | 1,797 | 321 |
Revenue recognized in the period from amounts included in deferred revenue at the beginning of the period | $ 608 | $ 321 | $ 321 | $ 129 |
Income Taxes - Additional Inf_2
Income Taxes - Additional Information (Details) - USD ($) $ in Millions | Dec. 29, 2020 | Mar. 31, 2021 | Mar. 31, 2020 | Dec. 31, 2020 |
Income Tax [Line Items] | ||||
Effective tax rates | 110.44% | 0.00% | ||
U. S. Federal Statutory rate | 21.00% | |||
Unrecognized Tax Receivable Agreement liability | $ 51.6 | $ 51.6 | ||
Federal and state net operating loss carryovers | $ 0.5 | |||
RSILP | ||||
Income Tax [Line Items] | ||||
Percentage of common units acquired | 23.10% | 23.10% | ||
RSILP | Special Limited Partner | ||||
Income Tax [Line Items] | ||||
Percentage of net income tax savings, entitled to pay | 85.00% |
Income Taxes - Components of _2
Income Taxes - Components of Income tax (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Current income taxes: | |||
Federal | $ 0 | ||
State and local | 0 | ||
Foreign | 2,708 | ||
Total current | 2,708 | ||
Deferred income taxes: | |||
Federal | 0 | ||
State and local | 0 | ||
Foreign | 211 | ||
Total deferred | $ (317) | 211 | |
Income tax (benefit) expense | $ 804 | $ 2,919 | $ 0 |
Income Taxes - Effective tax ra
Income Taxes - Effective tax rates (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2021 | Mar. 31, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | |
Reconciliations of income tax expense computed at the U.S. federal statutory income tax rate to the recognized income tax expense and the U.S. statutory income tax rate to our effective tax rates | ||||
Loss before income taxes | $ 728 | $ (12,943) | $ (128,726) | $ (22,450) |
Less: net loss before Reverse Recapitalization | (133,404) | (22,450) | ||
Less: net income before income taxes attributable to non-controlling interest | 3,597 | |||
Net income attributable to Rush Street Interactive Inc. before income taxes | 1,081 | |||
Income tax expense (benefit) at the federal statutory rate | 227 | |||
State income taxes, net of federal benefit | 100 | |||
Foreign operations | 2,919 | |||
Change in valuation allowance | (327) | |||
Income tax (benefit) expense | $ 804 | $ 2,919 | $ 0 |
Income Taxes - Deferred tax ass
Income Taxes - Deferred tax assets and liabilities (Details) $ in Thousands | Dec. 31, 2020USD ($) |
Deferred tax assets: | |
Investment in subsidiaries | $ 127,171 |
Net operating losses | 136 |
Imputed interest | 1,202 |
Other assets | 39 |
Total gross deferred tax assets | 128,548 |
Valuation allowance | (128,511) |
Total deferred tax assets, net of valuation allowance | 37 |
Deferred tax liabilities: | |
Investment in subsidiaries | 0 |
Total gross deferred tax liabilities | 0 |
Net deferred tax assets | $ 37 |
Earnings (Loss) Per Share (Deta
Earnings (Loss) Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2021 | Mar. 31, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | |
Numerator: | ||||
Net loss | $ (76) | $ (12,943) | $ (131,645) | $ (22,450) |
Less: Net loss attributable to RSILP prior to the Business Combination | (136,323) | |||
Less: Net income attributable to noncontrolling interests after the Business Combination | 3,597 | |||
Net income attributable to Rush Street Interactive, Inc. - basic | (17) | 1,081 | ||
Effect of dilutive securities: | ||||
Public, Private Placement and Working Capital Warrants, net of amounts attributable to noncontrolling interests | (1,656) | |||
Warrants, net of amounts attributable to noncontrolling interests | (9,569) | |||
Net loss attributable to Rush Street Interactive, Inc. - diluted | $ (9,586) | $ (575) | ||
Denominator: | ||||
Weighted average common shares outstanding - basic | 46,955,262 | 43,579,704 | ||
Weighted average effect of dilutive securities: | ||||
Public Warrants | 3,770,106 | 5,481,341 | ||
Private Placement and Working Capital Warrants | 2,690,120 | 3,181,561 | ||
Weighted average common shares outstanding - diluted | 53,415,488 | 52,242,606 | ||
Net loss per Class A common share - basic | $ 0 | $ 0.02 | ||
Net loss per Class A common share - diluted | $ (0.18) | $ (0.01) |
Earnings (Loss) Per Share - Ant
Earnings (Loss) Per Share - Anti dilutive (Details) - shares | Dec. 29, 2020 | Mar. 31, 2021 | Dec. 31, 2020 |
RSILP Units | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Securities excluded from computation of diluted shares outstanding, as their effect would have been anti-dilutive | 160,000,000 | 160,000,000 | |
Restricted stock unit ("RSU") | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Securities excluded from computation of diluted shares outstanding, as their effect would have been anti-dilutive | 2,928,025 | ||
Class A Common Stock | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Shares placed in escrow subject to the achievement of certain earnout targets | 1,212,813 | ||
Class A Common Stock | Earnout Interests | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Securities excluded from computation of diluted shares outstanding, as their effect would have been anti-dilutive | 1,212,813 | ||
Class V common stock | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Shares placed in escrow subject to the achievement of certain earnout targets | 15,000,000 | ||
RSILP | Class A Common Stock | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Shares placed in escrow subject to the achievement of certain earnout targets | 1,212,813 | ||
RSILP | Class V common stock | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Shares placed in escrow subject to the achievement of certain earnout targets | 15,000,000 | 15,000,000 |
Related Parties (Details)_2
Related Parties (Details) $ in Millions | Dec. 29, 2020 | Mar. 31, 2021USD ($) | Mar. 31, 2020USD ($) | Dec. 31, 2020USD ($)Dshares | Dec. 31, 2019USD ($) |
RSI A&R LPA | RSILP | |||||
Related Party Transaction [Line Items] | |||||
Threshold Period For Right to Exchange Retained Units | 6 months | ||||
Threshold minimum number of Retained units that should be exchanged in any single exchange | shares | 1,000 | ||||
Number of days VWAP considered for cash per unit payable by Special Limited Partner | D | 5 | ||||
Services Agreement | RSILP | |||||
Related Party Transaction [Line Items] | |||||
Term of the agreement | 2 years | 2 years | |||
Affiliated Land-Based Casinos | |||||
Related Party Transaction [Line Items] | |||||
Related Party Costs | $ 12.5 | $ 4.8 | $ 135.5 | $ 6.9 | |
Due from Related Parties, Current | $ 30 | $ 28.8 | 3.1 | ||
RSG | Services Agreement | |||||
Related Party Transaction [Line Items] | |||||
Percentage of employee's salary, bonus and benefits cost considered for payroll reimbursement | 150.00% | 150.00% | |||
Expenses relating to related party | $ 0.3 | $ 0.2 | $ 1.3 | 0.6 | |
Payables due to related party | $ 0.3 | $ 0.3 | $ 0.2 | ||
RSILP | RSI GP | |||||
Related Party Transaction [Line Items] | |||||
Ownership of units (in percent) | 1.00% | ||||
RSILP | Bluhm and Trust | |||||
Related Party Transaction [Line Items] | |||||
Ownership of units (in percent) | 73.00% | ||||
RSILP | Carlin and Trust | |||||
Related Party Transaction [Line Items] | |||||
Ownership of units (in percent) | 20.00% | ||||
Class A Common Stock | RSILP | |||||
Related Party Transaction [Line Items] | |||||
Shares Conversion Ratio | 1 | ||||
Class A Common Stock | RSI A&R LPA | RSILP | |||||
Related Party Transaction [Line Items] | |||||
Shares Conversion Ratio | 1 | ||||
Class V common stock | RSI A&R LPA | RSILP | |||||
Related Party Transaction [Line Items] | |||||
Number of shares cancelled per unit exchanged | shares | 1 |
Operating Leases - Components o
Operating Leases - Components of lease expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended |
Mar. 31, 2021 | Dec. 31, 2020 | |
Operating Leases | ||
Operating lease cost | $ 1,300 | $ 252 |
Variable lease cost | 132 | |
Total lease expense | $ 384 |
Operating Leases - Summary of q
Operating Leases - Summary of quantitative information about operating leases (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended |
Mar. 31, 2020 | Dec. 31, 2020 | |
Operating Leases | ||
Operating cash outflow from operating leases | $ 253 | |
Right-of-use assets obtained in exchange for new or modified operating lease liabilities | $ 727 | $ 1,305 |
Weighted-average remaining lease term (in years) | 2 years 7 months 6 days | |
Weighted-average discount rate - operating leases | 6.00% |
Operating Leases - Future minim
Operating Leases - Future minimum payments (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Future minimum payments under ASC 842 | ||
Year ending December 31, 2021 | $ 322 | |
Year ending December 31, 2022 | 337 | |
Year ending December 31, 2023 | 355 | |
Year ending December 31, 2024 | 233 | |
Year ending December 31, 2025 | 114 | |
Total undiscounted future cash flows | 1,361 | |
Less: present value discount | (156) | |
Operating lease liabilities | $ 1,205 | |
Future minimum payments under the non-cancelable operating leases | ||
Year ending December 31, 2020 | $ 239 | |
Year ending December 31, 2021 | 249 | |
Year ending December 31, 2022 | 264 | |
Year ending December 31, 2023 | 239 | |
Year ending December 31, 2024 | 100 | |
Total | $ 1,091 |
Operating Leases - Additional I
Operating Leases - Additional Information (Details) $ in Millions | 12 Months Ended |
Dec. 31, 2019USD ($) | |
Operating Leases | |
Total lease expense | $ 0.4 |
Commitments and Contingencies_5
Commitments and Contingencies (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended |
Mar. 31, 2021 | Dec. 31, 2020 | |
Commitments and Contingencies | ||
Equity stake offered (in percent) | 1.00% | 1.00% |
Contractual Obligation, Fiscal Year Maturity [Abstract] | ||
From April 1, 2021 to December 31, 2021 | $ 9,234 | |
Year ending December 31, 2021 | 6,367 | $ 14,598 |
Year ending December 31, 2022 | 2,706 | 6,065 |
Year ending December 31, 2023 | 1,514 | 2,684 |
Year ending December 31, 2024 | 10,537 | 1,513 |
Year ending December 31, 2025 | 10,537 | |
Thereafter | 24,577 | |
Thereafter | 24,577 | |
Total | $ 54,935 | $ 59,974 |
Fair Value Measurements - Finan
Fair Value Measurements - Financial Liabilities Fair Value Measurements on Recurring Basis (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 29, 2020 | Dec. 31, 2019 |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||
Warrants | $ 170,109 | $ 0 | |
Earnout interests liability | 351,048 | ||
Total fair value (Restated) | 521,157 | ||
Public Warrants | |||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||
Warrants | 88,079 | ||
Level 1 | |||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||
Total fair value (Restated) | 88,079 | ||
Level 1 | Public Warrants | |||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||
Warrants | 88,079 | $ 92,600 | |
Level 2 | Private Warrants | |||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||
Warrants | 82,030 | $ 88,600 | |
Level 3 | |||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||
Earnout interests liability | 351,048 | ||
Total fair value (Restated) | 433,078 | ||
Level 3 | Private Warrants | |||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||
Warrants | $ 82,030 |
Fair Value Measurements - Quant
Fair Value Measurements - Quantitative Information Regarding Level 3 Inputs (Details $ in Millions | Mar. 26, 2021USD ($) | Dec. 31, 2020USD ($)Y$ / shares | Dec. 29, 2020Y$ / shares |
Private Warrants | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Fair value | $ | $ 50.8 | $ 82 | |
Exercise price | Level 3 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Measurement input | 11.50 | 11.50 | |
Exercise price | Level 3 | Private Warrants | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Measurement input | 11.50 | 11.50 | |
Stock price | Level 3 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Measurement input | 15.96 | 22.76 | |
Stock price | Level 3 | Private Warrants | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Measurement input | 22.76 | 21.65 | |
Volatility | Level 3 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Measurement input | 42.6 | 41.4 | |
Volatility | Level 3 | Private Warrants | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Measurement input | 41.4 | 41.4 | |
Term (years) | Level 3 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Measurement input | 4.77 | 5 | |
Term (years) | Level 3 | Private Warrants | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Measurement input | Y | 5 | 5 | |
Term (years) | Level 3 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Measurement input | 0.76 | 0.37 | |
Term (years) | Level 3 | Private Warrants | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Measurement input | 0.37 | 0.36 |
Fair Value Measurements - Earno
Fair Value Measurements - Earnout Interests Liability (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2020USD ($) | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Earnout interests liability, fair value | $ 351,048 |
Level 3 | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Earnout interests liability, fair value | 351,048 |
Option pricing model | Level 3 | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Earnout interests liability, fair value | $ 351,048 |
Option pricing model | Volatility | Level 3 | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Earnout interests liability, measurement input | 54.6 |
Option pricing model | Term (years) | Level 3 | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Earnout interests liability, measurement input | 0.17 |
Option pricing model | Term (years) | Level 3 | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Earnout interests liability, term | 2 years 11 months 27 days |
Option pricing model | Minimum | Stock price | Level 3 | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Earnout interests liability, measurement input | 21.51 |
Option pricing model | Maximum | Stock price | Level 3 | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Earnout interests liability, measurement input | 21.65 |
Subsequent Events (Details)_2
Subsequent Events (Details) $ / shares in Units, $ in Thousands | Apr. 09, 2021USD ($) | Feb. 22, 2021USD ($)$ / sharesshares | Jan. 13, 2021USD ($)shares | Jan. 13, 2021USD ($)D$ / sharesshares | Mar. 31, 2021USD ($)$ / sharesshares | Mar. 31, 2021USD ($)$ / sharesshares | Dec. 31, 2020USD ($) | Dec. 31, 2019USD ($) | Mar. 26, 2021shares |
Subsequent Event [Line Items] | |||||||||
VWAP exceeded by company | $ / shares | $ 14 | ||||||||
Number of trading days to calculate VWAPs | D | 10 | ||||||||
Number of consecutive trading days to calculate VWAPs | D | 20 | ||||||||
Change in fair value of earnout interests liability | $ | $ (13,700) | $ 13,740 | $ 2,338 | $ 0 | |||||
Number of shares called by warrants | 11,442,389 | 11,442,389 | |||||||
Public Warrants | |||||||||
Subsequent Event [Line Items] | |||||||||
Number of shares called by warrants | 11,500,000 | ||||||||
Exercise price of warrants | $ / shares | $ 11.50 | $ 11.50 | $ 11.50 | ||||||
Total potential cash proceeds | $ | $ 131,600 | ||||||||
Subsequent event | |||||||||
Subsequent Event [Line Items] | |||||||||
VWAP exceeded by company | $ / shares | $ 14 | ||||||||
Number of trading days to calculate VWAPs | D | 10 | ||||||||
Number of consecutive trading days to calculate VWAPs | D | 20 | ||||||||
Change in fair value of earnout interests liability | $ | $ 13,700 | ||||||||
Subsequent event | Public Warrants | |||||||||
Subsequent Event [Line Items] | |||||||||
Number of shares called by warrants | 11,442,389 | 11,442,389 | |||||||
Exercise price of warrants | $ / shares | $ 11.50 | $ 11.50 | |||||||
Subsequent event | Private Warrants | |||||||||
Subsequent Event [Line Items] | |||||||||
Number of shares called by warrants | 2,571,808 | ||||||||
Subsequent event | Officers and non-employee directors | |||||||||
Subsequent Event [Line Items] | |||||||||
Aggregate fair value of equity grants | $ | $ 5,100 | ||||||||
Class A Common Stock | |||||||||
Subsequent Event [Line Items] | |||||||||
Number of shares reclassed to equity | 1,212,813 | 1,212,813 | |||||||
Stock Issued During Period, Shares, New Issues | 14,014,197 | ||||||||
Class A Common Stock | Subsequent event | |||||||||
Subsequent Event [Line Items] | |||||||||
Number of shares reclassed to equity | 1,212,813 | 1,212,813 | |||||||
Number of shares called by warrants | 11,500,000 | ||||||||
Exercise price of warrants | $ / shares | $ 11.50 | ||||||||
Class A Common Stock | Subsequent event | Public Warrants | |||||||||
Subsequent Event [Line Items] | |||||||||
Total potential cash proceeds | $ | $ 131,600 | ||||||||
Stock Issued During Period, Shares, New Issues | 11,442,389 | ||||||||
Class V common stock | Subsequent event | |||||||||
Subsequent Event [Line Items] | |||||||||
Number of shares reclassed to equity | 15,000,000 | 15,000,000 |