Cover Page
Cover Page - USD ($) | 12 Months Ended | ||
Dec. 31, 2022 | Mar. 01, 2023 | Jun. 30, 2022 | |
Document Information [Line Items] | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Period End Date | Dec. 31, 2022 | ||
Current Fiscal Year End Date | --12-31 | ||
Document Transition Report | false | ||
Entity File Number | 001-39232 | ||
Entity Registrant Name | RUSH STREET INTERACTIVE, INC. | ||
Entity Incorporation, State or Country Code | DE | ||
Entity Tax Identification Number | 84-3626708 | ||
Entity Address, Address Line One | 900 N. Michigan Avenue | ||
Entity Address, Address Line Two | Suite 950 | ||
Entity Address, City or Town | Chicago | ||
Entity Address, State or Province | IL | ||
Entity Address, Postal Zip Code | 60611 | ||
City Area Code | 773 | ||
Local Phone Number | 893-5855 | ||
Title of 12(b) Security | Class A common stock, $0.0001 par value per share | ||
Trading Symbol | RSI | ||
Security Exchange Name | NYSE | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Accelerated Filer | ||
Entity Small Business | false | ||
Entity Emerging Growth Company | true | ||
Entity Ex Transition Period | false | ||
ICFR Auditor Attestation Flag | false | ||
Entity Shell Company | false | ||
Entity Public Float | $ 275,916,083 | ||
Documents Incorporated by Reference | Portions of our Definitive Proxy Statement for our 2023 Annual Meeting of Stockholders, to be filed within 120 days after the end of the fiscal year covered by this Annual Report on Form 10-K, are incorporated by reference into Part III of this Form 10-K. Except with respect to information specifically incorporated by reference in this Annual Report, the Proxy Statement shall not be deemed to be filed as part hereof. | ||
Entity Central Index Key | 0001793659 | ||
Document Fiscal Year Focus | 2022 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false | ||
Class A Common Stock | |||
Document Information [Line Items] | |||
Entity Common Stock, Shares Outstanding (in shares) | 65,114,375 | ||
Class V Common Stock | |||
Document Information [Line Items] | |||
Entity Common Stock, Shares Outstanding (in shares) | 155,955,584 |
Audit Information
Audit Information | 12 Months Ended |
Dec. 31, 2022 | |
Auditor Information [Abstract] | |
Auditor Name | WithumSmith+Brown, PC |
Auditor Location | Whippany, New Jersey |
Auditor Firm ID | 100 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Current assets | ||
Cash and cash equivalents | $ 179,723 | $ 281,030 |
Restricted cash | 26,358 | 19,299 |
Players' receivables | 11,174 | 5,829 |
Due from affiliates | 35,904 | 28,159 |
Prepaid expenses and other current assets | 11,312 | 7,433 |
Total current assets | 264,471 | 341,750 |
Intangible assets, net | 69,025 | 53,380 |
Property and equipment, net | 9,764 | 7,232 |
Operating lease right-of-use asset | 1,852 | 1,562 |
Other assets | 5,234 | 4,807 |
Total assets | 350,346 | 408,731 |
Current liabilities | ||
Accounts payable | 29,803 | 6,501 |
Accrued expenses | 64,903 | 48,287 |
Players' liabilities | 42,512 | 24,160 |
Deferred royalty, short-term | 1,526 | 1,415 |
Operating lease liabilities, short-term | 722 | 509 |
Other current liabilities | 4,479 | 3,062 |
Total current liabilities | 143,945 | 83,934 |
Deferred royalty, long-term | 14,106 | 15,633 |
Operating lease liabilities, long-term | 1,177 | 1,148 |
Other long-term liabilities | 244 | 315 |
Total liabilities | 159,472 | 101,030 |
Commitments and contingencies | ||
Stockholders’ equity | ||
Additional paid-in capital | 177,683 | 167,270 |
Accumulated other comprehensive loss | (1,648) | (475) |
Accumulated deficit | (120,012) | (81,381) |
Total stockholders’ equity attributable to Rush Street Interactive, Inc. | 56,045 | 85,436 |
Non-controlling interests | 134,829 | 222,265 |
Total stockholders’ equity | 190,874 | 307,701 |
Total liabilities and stockholders’ equity | 350,346 | 408,731 |
Class A Common Stock | ||
Stockholders’ equity | ||
Common stock, value | 6 | 6 |
Class V Common Stock | ||
Stockholders’ equity | ||
Common stock, value | $ 16 | $ 16 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Dec. 31, 2022 | Dec. 31, 2021 |
Class A Common Stock | ||
Common stock, par value (in USD per share) | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized (in shares) | 750,000,000 | 750,000,000 |
Common stock, shares issued (in shares) | 65,111,616 | 61,118,406 |
Common stock, shares outstanding (in shares) | 65,111,616 | 61,118,406 |
Class V Common Stock | ||
Common stock, par value (in USD per share) | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized (in shares) | 200,000,000 | 200,000,000 |
Common stock, shares issued (in shares) | 155,955,584 | 158,702,329 |
Common stock, shares outstanding (in shares) | 155,955,584 | 158,702,329 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Income Statement [Abstract] | |||
Revenue | $ 592,212 | $ 488,105 | $ 278,500 |
Operating costs and expenses | |||
Costs of revenue | 414,664 | 332,145 | 190,873 |
Advertising and promotions | 220,460 | 190,476 | 56,517 |
General administration and other | 67,561 | 55,518 | 162,447 |
Depreciation and amortization | 14,325 | 4,245 | 2,082 |
Total operating costs and expenses | 717,010 | 582,384 | 411,919 |
Loss from operations | (124,798) | (94,279) | (133,419) |
Other income (expenses) | |||
Interest expense, net | (573) | (187) | (135) |
Change in fair value of warrant liabilities | 0 | 41,802 | 7,166 |
Change in fair value of earnout interests liability | 0 | (13,740) | (2,338) |
Total other income (expense) | (573) | 27,875 | 4,693 |
Loss before income taxes | (125,371) | (66,404) | (128,726) |
Income tax expense | 8,961 | 4,688 | 2,919 |
Net loss | (134,332) | (71,092) | (131,645) |
Net loss attributable to non-controlling interests | (95,701) | (51,603) | (132,726) |
Net (loss) income attributable to Rush Street Interactive, Inc. | $ (38,631) | $ (19,489) | $ 1,081 |
Net income (loss) per common share attributable to Rush Street Interactive, Inc. - basic (in USD per share) | $ (0.61) | $ (0.35) | $ 0.02 |
Weighted average common shares outstanding - basic (in shares) | 63,532,906 | 56,265,541 | 43,579,704 |
Net loss per common share attributable to Rush Street Interactive, Inc. - diluted (in USD per share) | $ (0.61) | $ (0.51) | $ (0.01) |
Weighted average common shares outstanding - diluted (in shares) | 63,532,906 | 57,426,885 | 52,242,606 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Statement of Comprehensive Income [Abstract] | |||
Net loss | $ (134,332) | $ (71,092) | $ (131,645) |
Foreign currency translation adjustment | (3,886) | (2,111) | 524 |
Comprehensive loss | (138,218) | (73,203) | (131,121) |
Comprehensive loss attributable to non-controlling interests | (98,441) | (53,168) | (132,202) |
Comprehensive (loss) income attributable to Rush Street Interactive, Inc. | $ (39,777) | $ (20,035) | $ 1,081 |
CONSOLIDATED STATEMENTS OF CHAN
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (DEFICIT) - USD ($) $ in Thousands | Total | Class A Common Stock | Stockholders’ Deficit | Common Stock Class A Common Stock | Common Stock Class V Common Stock | Treasury Stock | Additional Paid-in Capital | Accumulated Other Comprehensive Income | Accumulated Deficit | Non- Controlling Interests | Members’ Equity (Deficit) | |
Balance at beginning of year (in shares) at Dec. 31, 2019 | [1] | 0 | 0 | |||||||||
Balance at beginning of year at Dec. 31, 2019 | [1] | $ (3,368) | $ 0 | $ 0 | $ 0 | $ 0 | $ 0 | $ 0 | $ 0 | $ (3,368) | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||
Share-based compensation | 1,692 | 1,692 | ||||||||||
Foreign currency translation adjustment | 524 | 524 | ||||||||||
Net loss | (131,645) | 1,081 | 1,081 | 3,597 | (136,323) | |||||||
Proceeds and shares issue din the Business Combination (in shares) | 44,792,517 | 160,000,000 | ||||||||||
Distributions paid to non-controlling interest holders | (5,192) | (5,192) | ||||||||||
Members' contribution | 6,500 | 6,500 | ||||||||||
Settlement of share-based liability in exchange for RSILP Units | 150,382 | 150,382 | ||||||||||
Proceeds and shares issued in the Business Combination (Note 3) | (286,222) | (62,860) | $ 4 | $ 16 | 93 | (62,973) | (209,147) | (14,215) | ||||
Balance at end of the year (in shares) at Dec. 31, 2020 | 44,792,517 | 160,000,000 | ||||||||||
Treasury stock, ending balance (in shares) at Dec. 31, 2020 | 0 | |||||||||||
Balance at end of the year at Dec. 31, 2020 | (267,329) | (61,779) | $ 4 | $ 16 | $ 0 | 0 | 93 | (61,892) | (205,550) | $ 0 | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||
Share-based compensation (in shares) | 855,894 | |||||||||||
Share-based compensation | 24,912 | 6,196 | 6,196 | 18,716 | ||||||||
Foreign currency translation adjustment | (2,111) | (546) | (546) | (1,565) | ||||||||
Issuance of Class A Common Stock upon exercise of Warrants (in shares) | 14,014,197 | |||||||||||
Acquisition of intangibles (in shares) | 158,127 | |||||||||||
Acquisition of intangibles | 2,500 | 691 | 691 | 1,809 | ||||||||
Net loss | (71,092) | (19,489) | (19,489) | (51,603) | ||||||||
Allocation of equity and non-controlling interests upon changes in RSILP ownership | 11,288 | 11,310 | (22) | (11,288) | ||||||||
Issuance of Class A Common Stock upon exercise of Warrants | 259,895 | 70,146 | $ 2 | 70,144 | 189,749 | |||||||
Repurchase of Class A Common Stock (in shares) | 218,589 | |||||||||||
Repurchase of Class A Common Stock | (3,465) | (850) | $ (850) | (2,615) | ||||||||
Reissuance of treasury stock (in shares) | (218,589) | |||||||||||
Reissuance of treasury stock | $ 850 | (850) | ||||||||||
Settlement of earnout interests liability | 364,788 | 79,779 | 79,779 | 285,009 | ||||||||
Distributions paid to non-controlling interest holders | (397) | (397) | ||||||||||
RSILP Unit Exchange (in shares) | 1,297,671 | (1,297,671) | ||||||||||
Balance at end of the year (in shares) at Dec. 31, 2021 | 61,118,406 | 158,702,329 | ||||||||||
Treasury stock, ending balance (in shares) at Dec. 31, 2021 | 0 | |||||||||||
Balance at end of the year at Dec. 31, 2021 | 307,701 | 85,436 | $ 6 | $ 16 | $ 0 | 167,270 | (475) | (81,381) | 222,265 | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||
Share-based compensation (in shares) | 706,465 | |||||||||||
Share-based compensation | 18,691 | 5,459 | 5,459 | 13,232 | ||||||||
Foreign currency translation adjustment | (3,886) | (1,146) | (1,146) | (2,740) | ||||||||
Issuance of Class A Common Stock upon exercise of Warrants (in shares) | 11,442,389 | 3,226,745 | (3,226,745) | |||||||||
Acquisition of intangibles (in shares) | 60,000 | 480,000 | ||||||||||
Acquisition of intangibles | 2,700 | 786 | 786 | 1,914 | ||||||||
Net loss | (134,332) | (38,631) | (38,631) | (95,701) | ||||||||
Allocation of equity and non-controlling interests upon changes in RSILP ownership | 0 | 4,141 | 4,168 | (27) | (4,141) | |||||||
Balance at end of the year (in shares) at Dec. 31, 2022 | 65,111,616 | 155,955,584 | ||||||||||
Balance at end of the year at Dec. 31, 2022 | $ 190,874 | $ 56,045 | $ 6 | $ 16 | $ 177,683 | $ (1,648) | $ (120,012) | $ 134,829 | ||||
[1]Previously reported amounts have been adjusted for the retroactive application of the recapitalization related to the Business Combination. Refer to Note 3 for further information. |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Cash flows from operating activities | |||
Net loss | $ (134,332) | $ (71,092) | $ (131,645) |
Adjustments to reconcile net loss to net cash (used in) provided by operating activities | |||
Share-based compensation expense | 18,691 | 24,912 | 144,733 |
Depreciation and amortization expense | 14,325 | 4,245 | 2,082 |
Deferred income tax | (50) | 64 | 37 |
Noncash lease expense | 616 | 355 | 205 |
Change in fair value of earnout interests liability | 0 | 13,740 | 2,338 |
Change in fair value of warrant liabilities | 0 | (41,802) | (7,166) |
Changes in assets and liabilities: | |||
Players’ receivables | (5,345) | (5,050) | 1,072 |
Due from affiliates | (7,745) | 605 | (25,629) |
Prepaid expenses and other current assets | (3,879) | (4,562) | (306) |
Other assets | 312 | (1,406) | (499) |
Accounts payable | 23,331 | (5,546) | 11,229 |
Accrued expenses and other current liabilities | 17,472 | 22,077 | 16,325 |
Players’ liabilities | 18,352 | 15,660 | 2,433 |
Deferred royalty | (1,416) | (30) | 1,070 |
Lease liabilities | (653) | (356) | (100) |
Net cash (used in) provided by operating activities | (60,321) | (48,186) | 16,179 |
Cash flows from investing activities | |||
Purchases of property and equipment | (4,157) | (3,847) | (1,872) |
Acquisition of gaming licenses | (5,484) | (23,535) | (4,371) |
Internally developed software costs | (16,770) | (4,091) | 0 |
Investment in equity securities | 0 | (1,500) | 0 |
Investment in long-term time deposits | (689) | (748) | 0 |
Net cash used in investing activities | (28,990) | (37,002) | (6,243) |
Cash flows from financing activities | |||
Proceeds from shares issued for warrants | 0 | 131,588 | 0 |
Repurchase of common stock | 0 | (3,465) | 0 |
Principal payments of finance lease liabilities | (1,216) | (2,142) | 0 |
Distributions paid to non-controlling interest holders | 0 | (397) | 0 |
Distribution to members | 0 | 0 | (5,192) |
Proceeds from related party loan | 0 | 0 | 650 |
Repayments of related party loan | 0 | 0 | (650) |
Net proceeds from the Business Combination | 0 | 0 | 239,763 |
Members’ capital contribution | 0 | 0 | 6,500 |
Net cash (used in) provided by financing activities | (1,216) | 125,584 | 241,071 |
Effect of exchange rate changes on cash, cash equivalents and restricted cash | (3,721) | (2,132) | 515 |
Net change in cash, cash equivalents and restricted cash | (94,248) | 38,264 | 251,522 |
Cash, cash equivalents and restricted cash, at the beginning of the year | 300,329 | 262,065 | 10,543 |
Cash, cash equivalents and restricted cash, at the end of the year | 206,081 | 300,329 | 262,065 |
Supplemental disclosure of noncash investing and financing activities: | |||
Right-of-use assets obtained in exchange for new or modified operating lease liabilities | 965 | 810 | 1,305 |
Right-of-use assets obtained in exchange for new or modified finance lease liabilities | 1,124 | 2,547 | 0 |
Non-cash redemption of Private Placement and Working Capital Warrants | 0 | 50,798 | 0 |
Non-cash settlement of Public Warrants | 0 | 77,509 | 0 |
Non-cash settlement of Earnout Interests Liability | 0 | 364,788 | 0 |
Reissuance of treasury stock | 0 | 850 | 0 |
Acquisition of gaming licenses in exchange for future minimum market access fees | 0 | 13,070 | 0 |
Allocation of equity and non-controlling interests upon changes in RSILP ownership | 4,140 | 11,288 | 0 |
Earnout interests liability recognized in the Business Combination | 0 | 0 | 348,710 |
Warrant liabilities recognized in the Business Combination | 0 | 0 | 181,271 |
(Decrease) increase in accounts payable for property and equipment purchases | (29) | 53 | 58 |
Supplemental disclosure of cash flow information: | |||
Cash paid for income taxes | 6,795 | 3,541 | 763 |
Cash paid for interest | 937 | 123 | 0 |
Trademark Asset | |||
Cash flows from investing activities | |||
Payments to acquire intangible assets | (1,890) | 0 | 0 |
Developed Technology | |||
Cash flows from investing activities | |||
Payments to acquire intangible assets | 0 | (3,281) | 0 |
Supplemental disclosure of noncash investing and financing activities: | |||
Stock issued to acquire intangible assets | 0 | 2,500 | 0 |
Class V Common Stock | Trademark Asset | |||
Supplemental disclosure of noncash investing and financing activities: | |||
Stock issued to acquire intangible assets | 2,400 | 0 | 0 |
Class A Common Stock | Trademark Asset | |||
Supplemental disclosure of noncash investing and financing activities: | |||
Stock issued to acquire intangible assets | $ 300 | $ 0 | $ 0 |
Description of Business
Description of Business | 12 Months Ended |
Dec. 31, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Description of Business | 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., Canada 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. 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 to facilitate its operations in jurisdictions where the Company is licensed to operate. In 2018, RSI also 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 nationally. In addition, RSI launched its real-money offering in Canada and Mexico during the second quarter of 2022. As of December 31, 2022, RSI offered real-money online casino, online sports betting, retail sports betting and/or retail sports services in the 14 U.S. states and three international jurisdictions as outlined in the table below. Jurisdictions Online Casino Online Sports Retail Sports Domestic: Arizona ü Colorado ü Connecticut ü ü Illinois ü ü Indiana ü ü Iowa ü Louisiana ü Maryland ü ü Michigan ü ü ü New Jersey ü ü New York ü ü Pennsylvania ü ü ü Virginia ü West Virginia ü ü International: Colombia ü ü Ontario (Canada) ü ü Mexico ü ü Impact of COVID-19 COVID-19 significantly impacted RSI. Beyond disruptions in normal business operations in prior years, COVID-19 impacted consumer habits and preferences, with some consumers opting to avoid crowded public places such as land-based casinos. In prior years, COVID-19 also impacted sports betting due to the rescheduling, reconfiguring, suspension, postponement and cancellation of sports seasons and sporting events or exclusion of certain players or teams from sporting events, which tended to reduce customers’ use of, and spending on, our sports betting offerings. A future pandemic may have a similar, material adverse impact on our business. The Company’s revenue varies based on sports seasons and sporting events, among other factors, and cancellations, suspensions or alterations resulting from a future pandemic may adversely affect revenues, possibly materially. However, |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2022 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | 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 of America (“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, its direct and indirect wholly owned subsidiaries, and all entities in which the Company has a controlling interest. RSI is deemed to have a controlling interest of RSILP through its wholly owned subsidiary RSI GP, LLC (“RSI GP”), which is the sole general partner of RSILP. 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. 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 the portion of comprehensive income (loss) attributable to the non-controlling interests is presented as comprehensive loss attributable to non-controlling interests in the Company’s consolidated statements of comprehensive income (loss). All intercompany accounts and transactions have been eliminated upon consolidation. The Company is organized as an umbrella partnership-C corporation (“Up-C”) structure, as a result of the transactions contemplated in the Business Combination Agreement, dated as of July 27, 2020 among 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 (as amended and/or restated from time to time, the “Business Combination Agreement” and the transactions contemplated thereby, the “Business Combination”), pursuant to which dMY Technology Group, Inc. (“dMY”) acquired certain Class A Units of RSILP (the “RSILP Units”). 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 members, through their ownership of RSI’s 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 for the year ended December 31, 2020 reflect (i) the historical operating results of RSILP prior to the Reverse Recapitalization; and (ii) the combined results of the RSILP and dMY following the Business Combination. As an Up-C, substantially all of the assets of the combined company are held by RSILP and the Company’s primary 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). The Company controls RSILP through RSI GP. As of December 31, 2022, the Company owned 29.45% of the RSILP Units and the holders of the non-controlling interest 70.55% of the RSILP Units. Neil G. Bluhm and his trusts and entities controlled by him and Richard Schwartz (collectively, the “Controlling Holders”) together as a group control a majority of the voting power of the Company’s outstanding common stock. As a result, RSI is a “controlled company” under the New York Stock Exchange’s corporate governance standards. Reclassifications Certain prior year amounts have been reclassified to conform to the current year presentation. Such reclassifications had no impact on the Company’s reported total revenues, expenses, net income (loss), current assets, total assets, current liabilities, total liabilities, stockholders’ equity (deficit), non-controlling interests or cash flows. No reclassifications of prior period balances were material to the consolidated financial statements. Liquidity and Capital Resources Based on the net proceeds from the Business Combination (refer to Note 3) 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 negative operating cash flows of $60.3 million and $48.2 million for the years ended December 31, 2022 and 2021, respectively. The Company experienced positive operating cash flows of $16.2 million for the year ended December 31, 2020. The Company had working capital as of December 31, 2022 totaling $120.5 million, largely a result of the Reverse Capitalization and the exercise of warrants in March 2021 resulting in $131.6 million of proceeds. Refer to Note 8 for a discussion of warrant liabilities. 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; internally developed software; long-lived assets and investments in equity; 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; determination of the incremental borrowing rate to calculate operating lease liabilities and finance lease liabilities; valuation of the earnout interests liability; valuation of the warrant liabilities; valuation of acquired intangibles; and deferred taxes and amounts associated with the tax receivable agreement (the “Tax Receivable Agreement”) entered into in connection with the closing on December 29, 2020 of the Business Combination (the “Closing”). 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, instant access internet banking accounts and certificates of deposits with original maturities of 90 days or less at acquisition. The Company maintains separate bank accounts to segregate cash that resides in customers’ interactive gaming and sports betting accounts from cash used in operating activities. Player funds held by the Company at the end of the period are classified as restricted cash. Player funds include cash amounts that reside in players’ interactive gaming and sports betting accounts, withdrawals that were initiated by players but still pending as of month-end, and the value of any bets that are unsettled at the end of the period. The following table reconciles cash and cash equivalents and restricted cash in the consolidated balance sheets to the totals shown on the consolidated statements of cash flows: December 31, ($ in thousands) 2022 2021 Cash and cash equivalents (1) $ 179,723 $ 281,030 Restricted cash 26,358 19,299 Total cash, cash equivalents and restricted cash $ 206,081 $ 300,329 (1) The Company had cash equivalents of $1.0 million and nil as of December 31, 2022 and 2021, respectively. Cash equivalents are composed of certificates of deposits with original maturities of 90 days or less. Players Receivables Players receivables consist of cash deposits from customers that the Company has not yet received. Players receivables are reported at the amount that the Company expects to collect from customers, generally via third-party payment processors. These receivables arise due to the timing difference between a customer’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 receivables 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 the Company’s total 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 applicable 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 using 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: Asset Useful Life Computers, software and related equipment 3 years Furniture and fixtures 4 years Operating equipment and servers 5 years Leasehold improvements Lesser of the lease terms or the estimated useful lives of the improvements, generally 1–10 years Intangible Assets, Net License Fees, Net The Company incurs costs in connection with operating in certain jurisdictions, including license applications fees, market access payments to strategic partners and related renewals or extensions. These costs are capitalized as an intangible asset and amortized over the estimated useful life of the asset using the straight-line method. In certain markets, the Company agrees to pay minimum market access royalties to its partner, which is considered an integral cost in connection with operating in certain jurisdictions. The Company records fixed minimum royalty payments as intangible assets with an offset to deferred royalty liabilities, both of which are included on the consolidated balance sheets. The Company’s access to operate in a particular market is often dependent upon the continued viability of its 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. The remaining useful life of license fee intangible assets is evaluated at least annually. 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 Trademark Asset On June 10, 2022, the Company entered into an agreement to purchase all of the equity interests of Rush Street Productions, LLC, a Delaware limited liability company (“RSP”), in exchange for $1.5 million cash (net of $0.7 million cash acquired), 480,000 RSILP Units and the same number of newly issued shares of Class V Common Stock, par value $0.0001 per share of the Company (the “Class V Common Stock”), valued at $2.4 million, and 60,000 shares of Class A Common Stock of the Company, par value $0.0001 per share of the Company (the “Class A Common Stock”), valued at $0.3 million. The Company also assumed $0.5 million of outstanding liabilities and incurred $0.4 million of transaction costs directly attributable to the acquisition. To account for the transaction, the Company applied the definition of a business in ASC 805-10, Business Combinations – Overall, and concluded that the asset set acquired does not constitute a business as substantially all of the fair value of the acquired assets was concentrated in a single asset. Therefore, the transaction has been accounted for as an asset acquisition in accordance with ASC 805-50, Business Combinations — Related Issues . The acquired trademark asset represents an intangible asset that is recognized at its relative fair value in accordance with ASC 350-30, General Intangibles Other Than Goodwill . Goodwill is not recognized in an asset acquisition, and as such, any consideration that exceeds the fair value of the net assets acquired is allocated to the identifiable assets based on relative fair values. The Company capitalized a $5.1 million trademark intangible asset representing the total consideration paid of $4.2 million, assumed liabilities of $0.5 million, and legal and consulting fees incurred that were directly attributable to the asset acquisition of $0.4 million. The asset is recognized in intangible assets, net on the Company’s consolidated balance sheet as of December 31, 2022 and is amortized over the estimated useful life of five years using the straight-line method. The asset acquisition is presented on the consolidated statement of cash flows as net cash used in investing activities. Developed Technology On December 21, 2021, the Company entered into an agreement to purchase certain assets from Run It Once, Ltd. (“RIO”) in exchange for $3.3 million cash and 158,127 Class A Common Shares valued at $2.5 million. To account for the transaction, the Company applied the definition of a business in ASC 805-10, Business Combinations – Overall, and concluded that the asset set acquired does not constitute a business as the acquired assets did not include the necessary inputs, substantive processes, and outputs needed to operate as a business. Therefore, the transaction has been accounted for as an asset acquisition in accordance with ASC 805-50, Business Combinations — Related Issues . The acquired intellectual property represents developed technology intangible assets that are recognized at their relative fair value in accordance with ASC 350-30, General Intangibles Other Than Goodwill . Goodwill is not recognized in an asset acquisition and, as such, any consideration that exceeds the fair value of the net assets acquired is allocated to the identifiable assets based on relative fair values. The Company capitalized a $5.9 million developed technology intangible asset, representing the total consideration paid of $5.8 million and an incremental $0.1 million related to legal fees directly attributable to the asset acquisition incurred by the Company. The asset is recognized in intangible assets, net on the Company’s consolidated balance sheets as of December 31, 2022 and 2021. The asset is amortized over the estimated useful life of eight years using the straight-line method. The asset acquisition is presented on the consolidated statement of cash flows as net cash used in investing activities. Investments in Equity The Company accounts for investments in equity that are within the scope of ASC 321-10, Investments - Equity Securities (“ASC 321-10”), as either (1) investments with a readily determinable fair value, which are recorded at fair value or (2) investments without a readily determinable fair value, which are recorded at cost less any impairment. Equity investments that are initially concluded to not have a readily determinable fair value are reassessed at each reporting period. If the Company identifies observable price changes in orderly transactions for the identical or a similar investment of the same issuer, it measures the equity security at fair value as of the date that the observable transaction occurred using valuation techniques that are permitted under ASC 820, Fair Value Measurement . During the year ended December 31, 2021, the Company paid $1.5 million to acquire a less than 20% equity interest of Boom Entertainment, a business-to-business supplier and designer of free-to-play and regulated real-money digital wagering content. The equity investment is accounted for in accordance with ASC 321-10, and the Company has elected to continue to account for this equity investment at cost less impairment because there is not a readily determinable fair value for this investment as of December 31, 2022. No impairment was recorded during the year ended December 31, 2022. The investment is recognized in other assets as of the balance sheet date. Impairment of Long-Lived Assets The Company’s long-lived assets primarily consist of property and equipment, operating lease right-of-use assets, finance lease right-of-use assets and finite-lived intangible assets (i.e., license fees, internally developed software, developed technology and trademark assets). 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. Players’ Liabilities The Company records liabilities for customer account balances, which consist of the player cash reserve (i.e., customer deposits, plus customer winning bets, less customer losing bets, less customer withdrawals), the incremental progressive jackpot reserve, and the expected future payout relating to customers’ unredeemed bonus store points and unused discretionary bonus incentives. The Company’s restricted cash and players receivables balance will equal or exceed the player cash reserve portion of the Company’s players’ 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 consolidated balance sheets 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. 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 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 sheets 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 at 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 statements of operations. As of December 31, 2022, none of the earnout interests remain outstanding. See Note 9 for additional discussion of earnout interests. Warrant Liabilities As part of dMY’s initial public offering, dMY issued to third-party investors 23.0 million units, each consisting of one share of dMY’s 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. Subsequent to the Business Combination, 11,500,000 Public Warrants and 6,675,000 Private Warrants remained outstanding. None of the Public Warrants or Private Warrants remained outstanding as of December 31, 2022 and 2021. The Private Warrants and the shares of Class A Common Stock issuable upon the exercise of the Private Warrants were not transferable, assignable or salable until after the completion of a business combination, subject to certain limited exceptions. Additionally, the Private Warrants were exercisable for cash or on a cashless basis, at the holder’s option, and were non-redeemable so long as they are held by the initial purchasers or their permitted transferees. If the Private Warrants were held by someone other than the initial purchasers or their permitted transferees, the Private Warrants would have become 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 did 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 did not meet the conditions to be classified in equity. Because the Warrants met the definition of a derivative under ASC 815-40, the Company records these Warrants as liabilities on its consolidated balance sheets at fair value as of each reporting date, with subsequent changes in their respective fair values recognized in its consolidated statements of operations. See Note 8 for additional discussion of Warrants. 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 seven financial institutions within separate bank accounts. Although the Company maintains balances with certain institutions in excess of the 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. As of December 31, 2022, the Company has not experienced losses on these accounts. Leases The Company determines whether an arrangement is or contains a lease at contract inception. The Company accounts for leases in accordance with ASC 842, Leases , under which arrangements meeting the definition of a lease are classified as operating or finance leases and are recorded on the consolidated balance sheets as both a right-of-use asset and a lease liability. The Company elects to apply the practical expedient that allows for the combination of lease and non-lease components for all asset classes. 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 consolidated balance sheets 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 lease 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 (i.e., variable lease cost). Variable lease costs are expensed as incurred. The Company made an accounting policy election to exclude any short-term lease (i.e., leases with a term of twelve months or less) from 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 upon a modification that is not accounted for as a separate contract. Revenue Recognition Revenue is recognized in accordance with ASC Topic 606, Revenue from Contracts with Customers , 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 customer bets less amounts paid to customers for winning bets, less other incentives awarded to customers, 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 sports-related activity, or a series of the same, 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 customer bets less amounts paid to customers for winning bets, less other incentives awarded to customers, 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 customer 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 customer’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 or other discretionary bonus incentives. Bonus store points as well as discretionary bonus incentives, such as bonus dollars and free bets (collectively referred to herein as “customer bonuses”) are recognized as a reduction to revenue upon issuance of the incentive and as revenue upon redemption by the customer. Reductions to revenue include estimates for the stand-alone selling price of customer bonuses and the percentage of customer 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, 2022 and 2021. 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 Players’ 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 th |
Business Combination
Business Combination | 12 Months Ended |
Dec. 31, 2022 | |
Business Combinations [Abstract] | |
Business Combination | Business CombinationAs 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, 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 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 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. The Sellers 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, the Company will cancel one share of the Class V Common Stock. The following table reconciles the elements of the Business Combination to the consolidated statement of cash flow and the consolidated statement of changes in equity for the year ended December 31, 2020: ($ in thousands) Business 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 statement of operations. The number of shares of common stock issued immediately following the consummation of the Business Combination are as follows: Number of 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 included (a) a change of control within |
Revenue Recognition
Revenue Recognition | 12 Months Ended |
Dec. 31, 2022 | |
Revenue from Contract with Customer [Abstract] | |
Revenue Recognition | Revenue Recognition Disaggregation of revenue for the years ended December 31, 2022, 2021 and 2020 is as follows: Years Ended ($ in thousands) 2022 2021 2020 Online casino and online sports betting $ 576,573 $ 480,065 $ 273,761 Retail sports betting 11,713 3,828 1,205 Social gaming 3,926 4,212 3,534 Total revenue $ 592,212 $ 488,105 $ 278,500 The following table presents the Company’s revenue by geographic region for the years ended December 31, 2022, 2021 and 2020: Years Ended ($ in thousands) 2022 2021 2020 United States and Canada $ 539,887 $ 452,607 $ 263,214 Latin America, including Mexico 52,325 35,498 15,286 Total revenue $ 592,212 $ 488,105 $ 278,500 Deferred revenue associated with online casino and online sports betting revenue and retail sports betting revenue includes unsettled customer bets and unredeemed customer incentives and is included within Player’s liabilities in the consolidated balance sheets. Deferred revenue associated with social gaming revenue includes unredeemed social gaming virtual credits and is included within other current liabilities in the consolidated balance sheets. The deferred revenue activity for the years ended December 31, 2022, 2021 and 2020 was as follows: Years Ended ($ in thousands) 2022 2021 2020 Deferred revenue, beginning of period $ 4,637 $ 1,797 $ 321 Deferred revenue, end of period 7,840 4,637 1,797 Revenue recognized in the year from amounts included in deferred revenue at the beginning of the year 4,637 1,797 321 |
Intangible Assets, Net
Intangible Assets, Net | 12 Months Ended |
Dec. 31, 2022 | |
Intangible Assets, Net (Excluding Goodwill) [Abstract] | |
Intangible Assets, Net | Intangible Assets, Net As set forth in the table below, intangible assets, net as of December 31, 2022 and 2021 are $69.0 million and $53.4 million, respectively. The Company has the following intangible assets, net as of December 31, 2022 and 2021, respectively: ($ in thousands) Weighted Average Gross Accumulated Net License Fees December 31, 2022 8.44 $ 54,334 $ (12,363) $ 41,971 December 31, 2021 8.61 $ 49,226 $ (5,582) $ 43,644 Internally Developed Software December 31, 2022 2.51 $ 20,860 $ (3,490) $ 17,370 December 31, 2021 2.96 $ 4,091 $ (286) $ 3,805 Developed Technology December 31, 2022 7.00 $ 5,931 $ (741) $ 5,190 December 31, 2021 8.00 $ 5,931 $ — $ 5,931 Trademark Asset December 31, 2022 4.42 $ 5,088 $ (594) $ 4,494 December 31, 2021 N/A $ — $ — $ — The Company recorded amortization expense on intangible assets of $11.6 million, $3.0 million and $1.6 million for the years ended December 31, 2022, 2021 and 2020, respectively. At December 31, 2022, estimated future amortization of intangible assets is as follows ($ in thousands): ($ in thousands) Year ended December 31, 2023 $ 15,260 Year ended December 31, 2024 13,213 Year ended December 31, 2025 10,230 Year ended December 31, 2026 7,094 Year ended December 31, 2027 5,510 Thereafter 17,718 Total $ 69,025 |
Property and Equipment, Net
Property and Equipment, Net | 12 Months Ended |
Dec. 31, 2022 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment, Net | Property and Equipment, Net As set forth in the table below, property and equipment, net as of December 31, 2022 and 2021 are $9.8 million and $7.2 million, respectively. The balances as of December 31, 2022 and 2021 also include finance lease right-of-use assets, net. The balances consist of the following: December 31, ($ in thousands) 2022 2021 Computers, software and related equipment $ 4,050 $ 1,674 Operating equipment and servers 4,610 3,439 Furniture 600 433 Leasehold improvements 640 494 Property and equipment not yet placed into service 816 676 Total property and equipment 10,716 6,716 Less: accumulated depreciation (3,818) (1,803) 6,898 4,913 Finance lease right-of-use assets 3,112 2,547 Less: accumulated amortization (246) (228) 2,866 2,319 Property and equipment, net $ 9,764 $ 7,232 |
Accrued Expenses
Accrued Expenses | 12 Months Ended |
Dec. 31, 2022 | |
Payables and Accruals [Abstract] | |
Accrued Expenses | Accrued Expenses As set forth in the table below, accrued expenses as of December 31, 2022 and 2021 are $64.9 million and $48.3 million, respectively. The following table provides a summary of the accrued expenses at December 31, 2022 and 2021: December 31, ($ in thousands) 2022 2021 Accrued compensation and related expenses $ 10,077 $ 6,038 Accrued operating expenses 24,178 15,955 Accrued marketing expenses 27,315 21,948 Accrued professional fees 1,620 1,753 Due to affiliates 649 1,005 Other 1,064 1,588 Total accrued expenses $ 64,903 $ 48,287 |
Warrant Liabilities
Warrant Liabilities | 12 Months Ended |
Dec. 31, 2022 | |
Warrants and Rights Note Disclosure [Abstract] | |
Warrant Liabilities | Warrant LiabilitiesAs part of dMY’s initial public offering, dMY issued to third-party investors 23.0 million units, each consisting of one share of dMY Class A common stock 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. The Company classified the Warrants pursuant to ASC 815-40 as derivative liabilities on its consolidated balance sheets at fair value as of each reporting date, with subsequent changes in their respective fair values recognized in its consolidated statements of operations. Public Warrants On February 22, 2021, the Company announced the redemption of all the 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 the year ended December 31, 2022, 11,442,389 Public Warrants were exercised, 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 December 31, 2022. 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 were 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. 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 December 31, 2022. 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 that 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, or December 29, 2025. The Private Warrants were valued as of December 29, 2020 (the Closing), December 31, 2020, and March 26, 2021 (the exercise date). The following table provides quantitative information regarding Level 3 fair value measurement inputs at their measurement dates: March 26, December 31, December 29, Exercise price $ 11.50 $ 11.50 $ 11.50 Stock price $ 15.96 $ 22.76 $ 21.65 Volatility 42.6% 41.4% 41.4% Term (years) 4.77 5.00 5.00 Risk-free interest rate 0.76% 0.37% 0.36% The fair value of the Private Warrants was $50.8 million as of March 26, 2021. The Company recorded $41.8 million to change in fair value of warrant liabilities on the Company’s consolidated statement of operations, representing the change in fair value of the Public Warrants and Private Warrants from December 31, 2020 through the dates of exercise. The Company recorded $11.2 million to Change in fair value of warrant liabilities on the Company’s consolidated statement of operations, representing the change in fair value of these instruments from December 29, 2020 through December 31, 2020. The following table summarizes the fair values of warrant liabilities and change in fair value at each measurement date: Public Warrants (Level 1) Private Warrants (Level 3) Total Fair value of warrants at December 29, 2020 $ 92,633 $ 88,638 $ 181,271 Change in fair value of warrant liability (1) (4,554) (6,608) (11,162) Fair value of warrants at December 31, 2020 $ 88,079 $ 82,030 $ 170,109 Change in fair value of warrant liability (10,570) (31,232) (41,802) Fair value of warrants at redemption (77,509) (50,798) (128,307) Fair value of warrants at December 31, 2021 $ — $ — $ — (1) This amount represents the change in fair value of warrant liability, excluding the effect of $4.0 million of transactions costs incurred in connection with the issuance of the Warrants. |
Earnout Interests Liability
Earnout Interests Liability | 12 Months Ended |
Dec. 31, 2022 | |
Earnout Interests Liability [Abstract] | |
Earnout Interests Liability | 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 VWAPs within three years of the Closing. Earnout interests represented a freestanding financial instrument initially classified as liabilities on the accompanying consolidated balance sheets 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 were 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 statements of operations. 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: Fair Value Valuation Observable (O) or Range 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 Class A Common Stock trading price 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. 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 the Founder Holders (as defined below) 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 consolidated statement of operations, 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. The Company recorded $2.3 million to Change in fair value of earnout interests liability on the Company’s consolidated statement of operations, representing the change in fair value of the earnout interests from December 29, 2020 through December 31, 2021. Earnout Interests Liability Total December 29, 2020 $ 348,710 Change in fair value of earnout interests liability 2,338 December 31, 2020 $ 351,048 Change in fair value of earnout interests liability 13,740 Settlement of earnout interests liability (364,788) December 31, 2021 $ — |
Stockholders' Equity
Stockholders' Equity | 12 Months Ended |
Dec. 31, 2022 | |
Equity [Abstract] | |
Stockholders' Equity | Stockholders’ Equity Prior to the Business Combination 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. Reverse Recapitalization Resulting from the Business Combination 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, 2020, the earliest period presented, have been adjusted for the retrospective application of the Rush Street Interactive, 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”). Common Stock As of December 31, 2022, there were 65,111,616 shares of Class A Common Stock outstanding and 155,955,584 shares of Class V Common Stock outstanding. As of December 31, 2021, there were 61,118,406 shares of Class A Common Stock outstanding and 158,702,329 shares of Class V Common Stock outstanding. Voting Rights Each holder of record of Common Stock shall be entitled to one 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 shall have no voting power with respect to, and shall not be entitled to vote on, any amendment to the Company’s Second A&R Certificate of Incorporation (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 Company’s Second A&R Certificate of Incorporation (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 Company’s Second A&R Certificate of Incorporation, 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, 2022 and 2021, there were no shares of preferred stock outstanding. Non-Controlling Interest The non-controlling interest represents the RSILP Units held by holders other than the Company. The non-controlling interests’ ownership percentage can fluctuate over time as the holders of the RSILP Units elect to exchange for Class A Common Stock. The Company consolidates the financial position and results of operations of RSILP and reflects the proportionate interest held by the holders of RSILP Units other than the Company as non-controlling interest. The non-controlling interests owned 70.55% and 72.20% of the RSILP Units outstanding as of December 31, 2022 and 2021, respectively. The following table summarizes the changes in non-controlling interests owned: Non-Controlling Interest % Non-controlling interest % as of December 31, 2021 72.20 % Issuance of Class A Common Stock upon the conversion of RSILP Unit Exchanges (1.46) % Issuance of Class A Common Stock as purchase consideration (0.02) % Issuance of Class V Common Stock as purchase consideration 0.06 % Issuance of Class A Common Stock in connection with the vesting of certain share-based equity grants (0.23) % Non-controlling interest % as of December 31, 2022 70.55 % The non-controlling interests owned 72.20% and 76.89% of the RSILP Units outstanding as of December 31, 2021 and 2020, respectively. The following table summarizes the changes in non-controlling interests owned: Non-Controlling Interest % Non-controlling interest % as of December 31, 2020 76.89 % Issuance of RSILP units in connection with the vesting of earnout interest in January 2021 1.24 % Issuance of Class A Common Stock in connection with the exercise of the Warrants (4.98) % Issuance of Class A Common Stock in connection with the vesting of certain share-based equity grants 1 (0.38) % Repurchases of Class A Common Stock 0.08 % Issuance of Class A Common Stock upon the conversion of RSILP Unit Exchanges (0.59) % Issuance of Class A Common Stock as purchase consideration (0.06) % Non-controlling interest % as of December 31, 2021 72.20 % 1 Includes reissuance of Class A Common Stock previously repurchased. Treasury Stock During the year ended December 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 were subsequently reissued in connection with share-based compensation plans during the year ended December 31, 2021. |
Share-Based Compensation
Share-Based Compensation | 12 Months Ended |
Dec. 31, 2022 | |
Share-Based Payment Arrangement [Abstract] | |
Share-Based Compensation | 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. As of December 31, 2022, the total number of shares available for grant under the 2020 Plan was 2.5 million. The 2020 Plan terminates on December 29, 2030. Restricted Stock Units (“RSUs”) and Options The Company granted 3.9 million and 4.4 million RSUs with service conditions, during the years ended December 31, 2022 and 2021, respectively. RSUs with service conditions generally vest over a three The Company granted 1.6 million and 0.2 million RSUs with market-based conditions (e.g., share price targets, total shareholder return) during the years ended December 31, 2022 and 2021, respectively. RSUs with market-based conditions generally vest over a three year period and the fair value was determined using a Monte Carlo simulation using the following range of assumptions: December 31, December 31, Volatility rate 70.93% to 71.00% 56.08 % Risk-free interest rate 4.32% to 4.39% 0.39 % Average expected life (in years) 2.3 to 3.0 3.0 Dividend yield None None Stock price at grant date $ 3.95 $ 15.40 The Company granted 0.8 million and 0.1 million stock options during the years ended December 31, 2022 and 2021, respectively. The estimated grant date fair value of stock options was determined using a Black-Scholes valuation model using the following weighted-average assumptions: December 31, December 31, Volatility rate 58.98 % 53.52 % Risk-free interest rate 3.68 % 1.66 % Average expected life (in years) 5.6 5.4 Dividend yield None None Stock price at grant date $ 4.07 $ 15.40 Exercise price $ 4.07 $ 15.40 RSU and stock option activity for the year ended December 31, 2022 were as follows: RSUs Options Number of Weighted average grant price Number of Units Weighted average exercise price Unvested balance at December 31, 2021 3,076,158 $ 16.08 96,827 $ 15.40 Granted 5,542,010 4.17 790,339 4.07 Vested (1,020,874) 14.67 (32,278) 15.40 Forfeited (104,681) 14.36 — — Unvested balance at December 31, 2022 7,492,613 $ 7.48 854,888 $ 4.93 RSU and stock option activity for the year ended December 31, 2021 were as follows: RSUs Options Number of Weighted average grant price Number of Units Weighted average exercise price Unvested balance at December 31, 2020 — $ — — $ — Granted 4,621,440 16.04 130,565 15.40 Vested (1,457,613) 15.84 — — Forfeited (87,669) 17.89 (33,738) 15.40 Unvested balance at December 31, 2021 3,076,158 $ 16.08 96,827 $ 15.40 The aggregate fair value of the RSUs granted during the years ended December 31, 2022 and 2021, was approximately $23.1 million and $74.1 million, respectively. The weighted average grant date fair value of the RSUs vested during the years ended December 31, 2022 and 2021, was approximately $15.0 million and $23.1 million, respectively. The weighted-average grant-date fair values of options granted during the years ended December 31, 2022 and 2021 were $2.26 and $7.41 per share, respectively. The aggregate fair value of the stock options granted during the years ended December 31, 2022 and 2021, was $1.8 million and $1.0 million, respectively. The stock options outstanding as of December 31, 2022 had no intrinsic value. As of December 31, 2022, the Company had unrecognized stock-based compensation expense related to RSUs of $50.8 million, which is expected to be recognized over the remaining weighted-average vesting period of 1.2 years. As of December 31, 2022, the Company had unrecognized stock-based compensation expense related to stock options of $1.9 million, which is expected to be recognized over the remaining weighted-average vesting period of 1.3 years. Prior to the Business Combination 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. Common A-2 Units RSILP issued profits interests in the form of 414,894 Common A-2 Units to a significant unit holder during the year ended December 31, 2020, with a participation threshold of nil. 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. No Common A-2 Units were issued during the year ended December 31, 2022. Common B-1 Units RSILP issued profit interests in the form of 683,889 Common B-1 Units to certain employees during the year ended December 31, 2020, 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 as of December 29, 2020. The summary of B-1 Units’ activity is as follows: Number of 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, Dividend yield — Volatility factor 45 % Risk-free interest rate 0.12 % Time to liquidity (in years) 0 Lack of marketability discount 0.0 % 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. No Common B-1 Units were issued during the year ended December 31, 2022. Recognition of compensation costs Share-based compensation expense for the years ended December 31, 2022, 2021 and 2020 was as follows: Years Ended ($ in thousands) 2022 2021 2020 Costs of revenue $ 987 $ 1,808 $ — Advertising and promotions 2,048 3,605 — General administration and other 15,656 19,499 144,733 Total share-based compensation expense $ 18,691 $ 24,912 $ 144,733 |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2022 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income TaxesRSILP 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 its partners, including the Company, on a pro rata basis. The Company is subject to U.S. federal income taxes and 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 Expense The components of the income tax expense are: Years Ended ($ in thousands) 2022 2021 2020 Current income taxes: Federal $ (118) $ 149 $ — State and local (34) 25 — Foreign 9,137 4,551 2,708 8,985 4,725 2,708 Deferred income taxes: Federal — — — State and local — — — Foreign (24) (37) 211 (24) (37) 211 Income tax expense $ 8,961 $ 4,688 $ 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: Years Ended ($ in thousands) 2022 2021 2020 Net loss before income taxes $ (125,371) $ (66,404) $ (128,726) Less: net loss before Reverse Recapitalization — — (133,404) Less: net income (loss) before income taxes attributable to non-controlling interest (89,224) (48,258) 3,597 Net loss attributable to Rush Street Interactive Inc. before income taxes (36,147) (18,146) 1,081 Income tax expense (benefit) at the federal statutory rate (7,591) (3,811) 227 State income taxes, net of federal benefit (34) 25 100 Other (552) (67) — Foreign operations 9,113 4,514 2,919 Change in valuation allowance 8,025 4,027 (327) Income tax expense $ 8,961 $ 4,688 $ 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: Years Ended ($ in thousands) 2022 2021 Deferred tax assets: Investment in subsidiaries $ 134,586 $ 126,393 Net operating losses 26,394 9,065 Imputed interest 1,638 1,147 Share-based compensation 366 610 Other assets 165 99 Total gross deferred tax assets 163,149 137,314 Valuation allowance (163,029) (137,214) Total deferred tax assets, net of valuation allowance 120 100 Deferred tax liabilities: Investment in subsidiaries — — Total gross deferred tax liabilities — — Net deferred tax assets $ 120 $ 100 As of December 31, 2022, the Company had approximately $73.3 million and $69.4 million of federal and state net operating loss carryovers, respectively. As of December 31, 2021, the Company had approximately $32.6 million and $30.2 million of federal and state net operating loss carryovers, respectively. 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 2032. As of December 31, 2022, the Company has approximately $30.9 million of foreign net operating losses, the majority of which will begin to expire beginning in 2043 if not utilized. Foreign net operating losses as of December 31, 2021 were immaterial. 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 changes to the valuation allowance and the effective tax rate. In August 2022, the U.S. Inflation Reduction Act of 2022 and the CHIPS and Science Act of 2022 were signed into law. These acts include, among other provisions, a corporate alternative minimum tax of 15%, an excise tax on the repurchase of corporate stock, various climate and energy provisions, and incentives for investment in semiconductor manufacturing. These provisions are not expected to have a material impact on the Company’s results of operations or financial position. 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, 2022, 2021 and 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 did not have any unrecognized tax benefits as of December 31, 2022 or December 31, 2021. The Company filed an initial year federal and state tax returns for tax year 2020, which was 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. The statute of limitations has expired for tax years through 2018 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 Code Section 754 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 Business Combination 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 Class A Common Stock at the time of the exchange and the amount and timing of the recognition of the Company’s and its 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 Company’s financial condition. |
Earnings (Loss) Per Share
Earnings (Loss) Per Share | 12 Months Ended |
Dec. 31, 2022 | |
Earnings Per Share [Abstract] | |
Earnings (Loss) Per Share | Earnings (Loss) Per Share Basic net earnings (loss) 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 earnings 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 consolidated financial statements. Therefore, net earnings (loss) per share information has not been presented for periods prior to the Business Combination. 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 (loss) per share attributable to RSI and weighted-average shares of the Company’s Class A Common Stock outstanding for the year ended December 31, 2022, 2021 and 2020 are as follows (amounts in thousands, except for share and per share amounts): Years Ended 2022 2021 2020 Numerator: Net loss $ (134,332) $ (71,092) $ (131,645) Less: Net loss attributable to RSILP prior to the Business Combination — — (136,323) Less: Net income (loss) attributable to non-controlling interests after the Business Combination (95,701) (51,603) 3,597 Net income (loss) attributable to Rush Street Interactive, Inc. – basic (38,631) (19,489) 1,081 Effect of dilutive securities: Public, Private Placement and Working Capital Warrants, net of amounts attributable to non-controlling interests — (9,569) (1,656) Net loss attributable to Rush Street Interactive, Inc. – diluted $ (38,631) $ (29,058) $ (575) Denominator Weighted average common shares outstanding – basic 63,532,906 56,265,541 43,579,704 Weighted average effect of dilutive securities: Public Warrants (1) — 677,746 5,481,341 Private Placement and Working Capital Warrants (1) — 483,598 3,181,561 Weighted average common shares outstanding – diluted 63,532,906 57,426,885 52,242,606 Net earnings (loss) per Class A Common Share - basic $ (0.61) $ (0.35) $ 0.02 Net loss per Class A Common Share - diluted $ (0.61) $ (0.51) $ (0.01) (1) Calculated using the treasury stock method. Shares of the 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: December 31, 2022 2021 2020 RSILP Units (1) 155,955,584 158,702,329 160,000,000 Earnout Interests – Class A Common Stock (2) — — 1,212,813 Unvested Restricted Stock Units 7,492,613 3,076,158 — Unvested Stock Options 854,888 96,827 — (1) These RSILP Units are held by the Sellers. Pursuant to the Business Combination, they 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 amount as of December 31, 2020 includes 15,000,000 RSILP Units issued to the Sellers in the Business Combination that remained subject to certain restrictions pending the achievement of certain earnout targets. The restricted RSILP Units became unrestricted on January 13, 2021 upon the achievement of certain earnout targets. (2) These Earnout Interests represent the Class A Common Stock held by the Founder Holders pursuant to the Business Combination. |
Related Parties
Related Parties | 12 Months Ended |
Dec. 31, 2022 | |
Related Party Transactions [Abstract] | |
Related Parties | Related Parties Prior to the Business Combination, RSILP’s principal unit holders included Neil G. Bluhm, Executive Chairman, and NGB 2013 Grandchildren’s Dynasty Trust (collectively, “Bluhm and Trust”) and Gregory A. Carlin, the Company’s former Chief Executive Officer and former vice chairman, 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 its 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, Chief Executive Officer, to direct and exercise control over all activities of RSI GP, including RSI GP’s right to manage and control RSILP. As of December 31, 2022, Neil Bluhm and Richard Schwartz remain on the board of managers of RSI GP. 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 U.S. 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, up to four times per calendar year, able to exchange all or any portion of their RSILP Units, together with the cancellation 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”), an affiliate of the Company controlled by Neil Bluhm, Executive Chairman, 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 certain corporate and shared services related to functions such as government affairs, certain business development, insurance and other services (in each case as more fully described in the Services Agreement). RSG and its affiliates 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 with respect to RSG’s or its affiliates’ employees who perform or otherwise assist in providing the services. Expenses relating to support services were $0.4 million, $1.1 million and $1.3 million for the years ended December 31, 2022, 2021 and 2020, respectively, while payables due to RSG for support services were $0.1 million and $0.1 million at December 31, 2022 and 2021, respectively. These support services are recorded as general administration and other in the accompanying consolidated statements of operations and any payables to RSG are recorded as accrued expenses within the accompanying consolidated balance sheets. Affiliated Land-Based Casinos Neil Bluhm and his adult children (including Ms. Leslie Bluhm), through their individual capacities, entities or trusts that they have created for the benefit of themselves or their family members, and Greg Carlin, through his individual capacity, entities or trusts that he has created for the benefit of himself or his family members, are direct or indirect 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 related to arrangements with affiliated casinos were $39.8 million, $41.6 million and $24.5 million for the years ended December 31, 2022, 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 affiliate casino on the Company’s behalf. Net royalties paid are recorded as costs of revenue in the accompanying consolidated statements of operations. 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 $35.9 million and $28.2 million at December 31, 2022 and 2021, 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, 2022, 2021 and 2020 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, yet such amounts were not material to the consolidated financial statements for the years ended December 31, 2022 and 2021. Purchase of RSP During the year ended December 31, 2022, the Company purchased all of the equity interests of RSP, a poker-related production company that owns certain poker-related assets, including Poker Night in America, a television program focused on poker games and tournaments. On June 10, 2022, Messrs. Neil Bluhm and Greg Carlin forfeited their limited liability company interests in RSP, resulting in Mr. Todd Anderson being the sole owner of RSP. The Company then purchased from Mr. Anderson 100% of the limited liability company interests in RSP for an aggregate purchase price of approximately $4.7 million, comprised of cash, Class V Common Stock, RSILP Units, Class A Common Stock and assumed liabilities (the “RSP Acquisition”). The Company obtained an independent valuation report as to the fair market value of RSP to support the purchase price being paid for the RSP Acquisition. As part of the RSP Acquisition, the Company employed Mr. Anderson and two other RSP employees. Mr. Anderson received all of the proceeds from the RSP Acquisition; Messrs. Bluhm and Carlin did not receive any proceeds from the RSP Acquisition. The Audit Committee of the Company’s Board of Directors (the “Board”) approved the RSP Acquisition in accordance with the Company’s Related-Party Transactions Policy, and the Board (with Mr. Bluhm and certain other directors abstaining) approved the same. See Note 2 and Note 16 for additional information. |
Leases
Leases | 12 Months Ended |
Dec. 31, 2022 | |
Leases [Abstract] | |
Leases | Leases The Company leases office space under operating lease agreements with terms that do not exceed five years. The components of lease expense for the years ended December 31, 2022, 2021 and 2020 were as follows: Years Ended ($ in thousands) 2022 2021 2020 Operating lease cost $ 676 $ 268 $ 252 Variable lease cost 275 528 132 Short-term lease cost 436 179 — Total lease expenses $ 1,387 $ 975 $ 384 In addition, the Company leases certain servers and related equipment under finance lease arrangements. Other information relating to leases for the years ended December 31, 2022, 2021 and 2020 is as follows: Years Ended ($ in thousands) 2022 2021 2020 Operating cash flows from operating leases $ 653 $ 355 $ 253 Right-of-use assets obtained in exchange for new or modified operating lease liabilities $ 965 $ 810 $ 1,305 Right-of-use assets obtained in exchange for new or modified finance lease liabilities $ 1,124 $ 2,547 N/A Weighted-average remaining lease term (in years) – operating leases 3.1 3.2 2.6 Weighted-average remaining lease term (in years) – finance leases 3.0 4.6 N/A Weighted-average discount rate – operating leases 6.2 % 6.0 % 6.0 % Weighted-average discount rate – finance leases 6.0 % 6.0 % N/A 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. The Company records lease activity within the following financial statement line items: Account Financial Statement Line Item Operating lease right-of-use asset Operating lease right-of-use asset Finance lease right-of-use asset, net Property and equipment, net Operating lease liabilities Operating lease liabilities, short-term and long-term Finance lease liabilities Other current liabilities and Other long-term liabilities Operating lease expense General administrative and other Finance lease amortization expense Depreciation and amortization Finance lease interest expense Interest expense, net Maturity of operating lease liabilities as of December 31, 2022 is as follows ($ in thousands): ($ in thousands) Year ending December 31, 2023 $ 808 Year ending December 31, 2024 591 Year ending December 31, 2025 378 Year ending December 31, 2026 198 Year ending December 31, 2027 99 Total undiscounted future cash flows 2,074 Less: present value discount (175) Operating lease liabilities $ 1,899 Maturity of finance lease liabilities as of December 31, 2022 is as follows ($ in thousands): ($ in thousands) Year ending December 31, 2023 $ 114 Year ending December 31, 2024 114 Year ending December 31, 2025 114 Year ending December 31, 2026 — Year ending December 31, 2027 — Total undiscounted future cash flows 342 Less: present value discount (29) Finance lease liabilities $ 313 |
Leases | 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 years ended December 31, 2022, 2021 and 2020 were as follows: Years Ended ($ in thousands) 2022 2021 2020 Operating lease cost $ 676 $ 268 $ 252 Variable lease cost 275 528 132 Short-term lease cost 436 179 — Total lease expenses $ 1,387 $ 975 $ 384 In addition, the Company leases certain servers and related equipment under finance lease arrangements. Other information relating to leases for the years ended December 31, 2022, 2021 and 2020 is as follows: Years Ended ($ in thousands) 2022 2021 2020 Operating cash flows from operating leases $ 653 $ 355 $ 253 Right-of-use assets obtained in exchange for new or modified operating lease liabilities $ 965 $ 810 $ 1,305 Right-of-use assets obtained in exchange for new or modified finance lease liabilities $ 1,124 $ 2,547 N/A Weighted-average remaining lease term (in years) – operating leases 3.1 3.2 2.6 Weighted-average remaining lease term (in years) – finance leases 3.0 4.6 N/A Weighted-average discount rate – operating leases 6.2 % 6.0 % 6.0 % Weighted-average discount rate – finance leases 6.0 % 6.0 % N/A 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. The Company records lease activity within the following financial statement line items: Account Financial Statement Line Item Operating lease right-of-use asset Operating lease right-of-use asset Finance lease right-of-use asset, net Property and equipment, net Operating lease liabilities Operating lease liabilities, short-term and long-term Finance lease liabilities Other current liabilities and Other long-term liabilities Operating lease expense General administrative and other Finance lease amortization expense Depreciation and amortization Finance lease interest expense Interest expense, net Maturity of operating lease liabilities as of December 31, 2022 is as follows ($ in thousands): ($ in thousands) Year ending December 31, 2023 $ 808 Year ending December 31, 2024 591 Year ending December 31, 2025 378 Year ending December 31, 2026 198 Year ending December 31, 2027 99 Total undiscounted future cash flows 2,074 Less: present value discount (175) Operating lease liabilities $ 1,899 Maturity of finance lease liabilities as of December 31, 2022 is as follows ($ in thousands): ($ in thousands) Year ending December 31, 2023 $ 114 Year ending December 31, 2024 114 Year ending December 31, 2025 114 Year ending December 31, 2026 — Year ending December 31, 2027 — Total undiscounted future cash flows 342 Less: present value discount (29) Finance lease liabilities $ 313 |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 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 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 subsequently amended and served on the Company on September 15, 2020. The amended complaint alleges that Todd Anderson was offered a 1% equity stake in RSILP in 2012 that was never issued and asserts breach of contract, promissory estoppel, constructive fraud, conversion, breach of fiduciary duty, and unjust enrichment. On October 13, 2020, RSILP filed a motion to dismiss all the alleged claims asserted in the complaint. On September 28, 2021, the court entered an order granting in part and denying in part RSILP's motion to dismiss, dismissing Mr. Anderson’s constructive fraud, breach of fiduciary duty and unjust enrichment claims, but allowing his remaining claims to proceed. On October 19, 2021, RSILP filed an answer to the amended complaint, and as of June 10, 2022, the parties entered into a Settlement Agreement (the “Settlement Agreement”), pursuant to which the case and all remaining claims were dismissed with prejudice on June 13, 2022 pursuant to a joint stipulation of the parties and which facilitated the RSP Acquisition. The Audit Committee of the Board approved the Settlement Agreement in accordance with the Company’s Related-Party Transactions Policy, and the Board (with Mr. Neil Bluhm and certain other directors abstaining) approved the same. For additional information about the RSP Acquisition, see Note 14. 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, 2023 $ 30,624 Year ending December 31, 2024 14,501 Year ending December 31, 2025 11,218 Year ending December 31, 2026 4,788 Year ending December 31, 2027 5,032 Thereafter 29,789 Total (1) $ 95,952 (1) Includes operating lease and finance lease obligations under non-cancelable lease contracts totaling $2.6 million, obligations under non-cancelable contracts with marketing vendors totaling $34.5 million, license and market access commitments totaling $58.8 million. Certain market access arrangements require the Company to make additional payments at a contractual milestone date if the market access fees paid up until that milestone date do not meet a minimum contractual threshold. In these instances, the Company calculates future minimum payment as the total milestone payment less any amounts already paid to the partner and includes such payments in the period in which the milestone date occurs. |
Fair Value Measurements
Fair Value Measurements | 12 Months Ended |
Dec. 31, 2022 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2022 | |
Accounting Policies [Abstract] | |
Basis of Presentation and Principles of Consolidation | 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 of America (“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, its direct and indirect wholly owned subsidiaries, and all entities in which the Company has a controlling interest. RSI is deemed to have a controlling interest of RSILP through its wholly owned subsidiary RSI GP, LLC (“RSI GP”), which is the sole general partner of RSILP. 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. 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 the portion of comprehensive income (loss) attributable to the non-controlling interests is presented as comprehensive loss attributable to non-controlling interests in the Company’s consolidated statements of comprehensive income (loss). All intercompany accounts and transactions have been eliminated upon consolidation. The Company is organized as an umbrella partnership-C corporation (“Up-C”) structure, as a result of the transactions contemplated in the Business Combination Agreement, dated as of July 27, 2020 among 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 (as amended and/or restated from time to time, the “Business Combination Agreement” and the transactions contemplated thereby, the “Business Combination”), pursuant to which dMY Technology Group, Inc. (“dMY”) acquired certain Class A Units of RSILP (the “RSILP Units”). 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 members, through their ownership of RSI’s 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 for the year ended December 31, 2020 reflect (i) the historical operating results of RSILP prior to the Reverse Recapitalization; and (ii) the combined results of the RSILP and dMY following the Business Combination. As an Up-C, substantially all of the assets of the combined company are held by RSILP and the Company’s primary 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). The Company controls RSILP through RSI GP. As of December 31, 2022, the Company owned 29.45% of the RSILP Units and the holders of the non-controlling interest 70.55% of the RSILP Units. Neil G. Bluhm and his trusts and entities controlled by him and Richard Schwartz (collectively, the “Controlling Holders”) together as a group control a majority of the voting power of the Company’s outstanding common stock. As a result, RSI is a “controlled company” under the New York Stock Exchange’s corporate governance standards. |
Reclassifications | Reclassifications Certain prior year amounts have been reclassified to conform to the current year presentation. Such reclassifications had no impact on the Company’s reported total revenues, expenses, net income (loss), current assets, total assets, current liabilities, total liabilities, stockholders’ equity (deficit), non-controlling interests or cash flows. No reclassifications of prior period balances were material to the consolidated financial statements. |
Liquidity and Capital Resources | Liquidity and Capital Resources Based on the net proceeds from the Business Combination (refer to Note 3) 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 negative operating cash flows of $60.3 million and $48.2 million for the years ended December 31, 2022 and 2021, respectively. The Company experienced positive operating cash flows of $16.2 million for the year ended December 31, 2020. |
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; internally developed software; long-lived assets and investments in equity; 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; determination of the incremental borrowing rate to calculate operating lease liabilities and finance lease liabilities; valuation of the earnout interests liability; valuation of the warrant liabilities; valuation of acquired intangibles; and deferred taxes and amounts associated with the tax receivable agreement (the “Tax Receivable Agreement”) entered into in connection with the closing on December 29, 2020 of the Business Combination (the “Closing”). |
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, instant access internet banking accounts and certificates of deposits with original maturities of 90 days or less at acquisition. The Company maintains separate bank accounts to segregate cash that resides in customers’ interactive gaming and sports betting accounts from cash used in operating activities. Player funds held by the Company at the end of the period are classified as restricted cash. Player funds include cash amounts that reside in players’ interactive gaming and sports betting accounts, withdrawals that were initiated by players but still pending as of month-end, and the value of any bets that are unsettled at the end of the period. The following table reconciles cash and cash equivalents and restricted cash in the consolidated balance sheets to the totals shown on the consolidated statements of cash flows: December 31, ($ in thousands) 2022 2021 Cash and cash equivalents (1) $ 179,723 $ 281,030 Restricted cash 26,358 19,299 Total cash, cash equivalents and restricted cash $ 206,081 $ 300,329 (1) The Company had cash equivalents of $1.0 million and nil as of December 31, 2022 and 2021, respectively. Cash equivalents are composed of certificates of deposits with original maturities of 90 days or less. |
Players Receivables | Players Receivables Players receivables consist of cash deposits from customers that the Company has not yet received. Players receivables are reported at the amount that the Company expects to collect from customers, generally via third-party payment processors. These receivables arise due to the timing difference between a customer’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 receivables 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 the Company’s total 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 applicable 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 using 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: Asset Useful Life Computers, software and related equipment 3 years Furniture and fixtures 4 years Operating equipment and servers 5 years Leasehold improvements Lesser of the lease terms or the estimated useful lives of the improvements, generally 1–10 years |
Intangible Assets, Net | Intangible Assets, Net License Fees, Net The Company incurs costs in connection with operating in certain jurisdictions, including license applications fees, market access payments to strategic partners and related renewals or extensions. These costs are capitalized as an intangible asset and amortized over the estimated useful life of the asset using the straight-line method. In certain markets, the Company agrees to pay minimum market access royalties to its partner, which is considered an integral cost in connection with operating in certain jurisdictions. The Company records fixed minimum royalty payments as intangible assets with an offset to deferred royalty liabilities, both of which are included on the consolidated balance sheets. The Company’s access to operate in a particular market is often dependent upon the continued viability of its 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. The remaining useful life of license fee intangible assets is evaluated at least annually. 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 Trademark Asset On June 10, 2022, the Company entered into an agreement to purchase all of the equity interests of Rush Street Productions, LLC, a Delaware limited liability company (“RSP”), in exchange for $1.5 million cash (net of $0.7 million cash acquired), 480,000 RSILP Units and the same number of newly issued shares of Class V Common Stock, par value $0.0001 per share of the Company (the “Class V Common Stock”), valued at $2.4 million, and 60,000 shares of Class A Common Stock of the Company, par value $0.0001 per share of the Company (the “Class A Common Stock”), valued at $0.3 million. The Company also assumed $0.5 million of outstanding liabilities and incurred $0.4 million of transaction costs directly attributable to the acquisition. To account for the transaction, the Company applied the definition of a business in ASC 805-10, Business Combinations – Overall, and concluded that the asset set acquired does not constitute a business as substantially all of the fair value of the acquired assets was concentrated in a single asset. Therefore, the transaction has been accounted for as an asset acquisition in accordance with ASC 805-50, Business Combinations — Related Issues . The acquired trademark asset represents an intangible asset that is recognized at its relative fair value in accordance with ASC 350-30, General Intangibles Other Than Goodwill . Goodwill is not recognized in an asset acquisition, and as such, any consideration that exceeds the fair value of the net assets acquired is allocated to the identifiable assets based on relative fair values. The Company capitalized a $5.1 million trademark intangible asset representing the total consideration paid of $4.2 million, assumed liabilities of $0.5 million, and legal and consulting fees incurred that were directly attributable to the asset acquisition of $0.4 million. The asset is recognized in intangible assets, net on the Company’s consolidated balance sheet as of December 31, 2022 and is amortized over the estimated useful life of five years using the straight-line method. The asset acquisition is presented on the consolidated statement of cash flows as net cash used in investing activities. Developed Technology On December 21, 2021, the Company entered into an agreement to purchase certain assets from Run It Once, Ltd. (“RIO”) in exchange for $3.3 million cash and 158,127 Class A Common Shares valued at $2.5 million. To account for the transaction, the Company applied the definition of a business in ASC 805-10, Business Combinations – Overall, and concluded that the asset set acquired does not constitute a business as the acquired assets did not include the necessary inputs, substantive processes, and outputs needed to operate as a business. Therefore, the transaction has been accounted for as an asset acquisition in accordance with ASC 805-50, Business Combinations — Related Issues . The acquired intellectual property represents developed technology intangible assets that are recognized at their relative fair value in accordance with ASC 350-30, General Intangibles Other Than Goodwill . Goodwill is not recognized in an asset acquisition and, as such, any consideration that exceeds the fair value of the net assets acquired is allocated to the identifiable assets based on relative fair values. The Company capitalized a $5.9 million developed technology intangible asset, representing the total consideration paid of $5.8 million and an incremental $0.1 million related to legal |
Investments in Equity | Investments in Equity The Company accounts for investments in equity that are within the scope of ASC 321-10, Investments - Equity Securities (“ASC 321-10”), as either (1) investments with a readily determinable fair value, which are recorded at fair value or (2) investments without a readily determinable fair value, which are recorded at cost less any impairment. Equity investments that are initially concluded to not have a readily determinable fair value are reassessed at each reporting period. If the Company identifies observable price changes in orderly transactions for the identical or a similar investment of the same issuer, it measures the equity security at fair value as of the date that the observable transaction occurred using valuation techniques that are permitted under ASC 820, Fair Value Measurement . During the year ended December 31, 2021, the Company paid $1.5 million to acquire a less than 20% equity interest of Boom Entertainment, a business-to-business supplier and designer of free-to-play and regulated real-money digital wagering content. The equity investment is accounted for in accordance with ASC 321-10, and the Company has elected to continue to account for this equity investment at cost less impairment because there is not a readily determinable fair value for this investment as of December 31, 2022. No impairment was recorded during the year ended December 31, 2022. The investment is recognized in other assets as of the balance sheet date. |
Impairment of Long-Lived Assets | Impairment of Long-Lived Assets The Company’s long-lived assets primarily consist of property and equipment, operating lease right-of-use assets, finance lease right-of-use assets and finite-lived intangible assets (i.e., license fees, internally developed software, developed technology and trademark assets). |
Players' Liabilities | Players’ Liabilities The Company records liabilities for customer account balances, which consist of the player cash reserve (i.e., customer deposits, plus customer winning bets, less customer losing bets, less customer withdrawals), the incremental progressive jackpot reserve, and the expected future payout relating to customers’ unredeemed bonus store points and unused discretionary bonus incentives. The Company’s restricted cash and players receivables balance will equal or exceed the player cash reserve portion of the Company’s players’ 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 consolidated balance sheets 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. 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 |
Earnout Interests Liability | Earnout Interests Liability Earnout interests represent a freestanding financial instrument classified as liabilities on the accompanying consolidated balance sheets 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 at 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 statements of operations. As of December 31, 2022, none of the earnout interests remain outstanding. See Note 9 for additional discussion of earnout interests. |
Warrant Liabilities | Warrant Liabilities As part of dMY’s initial public offering, dMY issued to third-party investors 23.0 million units, each consisting of one share of dMY’s 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. Subsequent to the Business Combination, 11,500,000 Public Warrants and 6,675,000 Private Warrants remained outstanding. None of the Public Warrants or Private Warrants remained outstanding as of December 31, 2022 and 2021. The Private Warrants and the shares of Class A Common Stock issuable upon the exercise of the Private Warrants were not transferable, assignable or salable until after the completion of a business combination, subject to certain limited exceptions. Additionally, the Private Warrants were exercisable for cash or on a cashless basis, at the holder’s option, and were non-redeemable so long as they are held by the initial purchasers or their permitted transferees. If the Private Warrants were held by someone other than the initial purchasers or their permitted transferees, the Private Warrants would have become 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 did 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 did not meet the conditions to be classified in equity. Because the Warrants met the definition of a derivative under ASC 815-40, the Company records these Warrants as liabilities on its consolidated balance sheets at fair value as of each reporting date, with subsequent changes in their respective fair values recognized in its consolidated statements of operations. See Note 8 for additional discussion of Warrants. |
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 seven financial institutions within separate bank accounts. Although the Company maintains balances with certain institutions in excess of the 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. As of December 31, 2022, the Company has not experienced losses on these accounts. |
Leases | Leases The Company determines whether an arrangement is or contains a lease at contract inception. The Company accounts for leases in accordance with ASC 842, Leases , under which arrangements meeting the definition of a lease are classified as operating or finance leases and are recorded on the consolidated balance sheets as both a right-of-use asset and a lease liability. The Company elects to apply the practical expedient that allows for the combination of lease and non-lease components for all asset classes. 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 consolidated balance sheets 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 lease 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 (i.e., variable lease cost). Variable lease costs are expensed as incurred. The Company made an accounting policy election to exclude any short-term lease (i.e., leases with a term of twelve months or less) from 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 upon a modification that is not accounted for as a separate contract. |
Revenue Recognition | Revenue Recognition Revenue is recognized in accordance with ASC Topic 606, Revenue from Contracts with Customers , 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 customer bets less amounts paid to customers for winning bets, less other incentives awarded to customers, 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 sports-related activity, or a series of the same, 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 customer bets less amounts paid to customers for winning bets, less other incentives awarded to customers, 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 customer 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 customer’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 or other discretionary bonus incentives. Bonus store points as well as discretionary bonus incentives, such as bonus dollars and free bets (collectively referred to herein as “customer bonuses”) are recognized as a reduction to revenue upon issuance of the incentive and as revenue upon redemption by the customer. Reductions to revenue include estimates for the stand-alone selling price of customer bonuses and the percentage of customer 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, 2022 and 2021. 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 Players’ 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 or other sports betting facilities. In this scenario, revenue is generated based on total customer bets less amounts paid to customers for winning bets, less other incentives awarded to customers. Social gaming The Company provides a social gaming platform for users to enjoy free-to-play games that use virtual credits. While virtual credits are issued to users for free, some users 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 users upon the redemption of virtual credits. Deferred revenue is recorded when users purchase virtual credits and revenue is recognized when the virtual credits 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 timing between the fulfillment of the Company's performance obligations and the receipt of cash from the Company's customers. The Company does not have material contract assets. The Company’s contract liabilities consist of deferred revenue. 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 also includes contract liabilities for the Company’s obligation to transfer additional goods or services to a customer for which the Company has received consideration, such as bonus store points. The Company recognizes breakage on these liabilities proportionately as redemption occurs. Revenue recognized relating to breakage during the years ended December 31, 2022 and 2021 was not material to the consolidated financial statements. Deferred revenue relating to unsettled customer bets and unredeemed customer incentives is recorded in Players’ liabilities on the consolidated balance sheets. Deferred revenue relating to the Company’s social gaming services includes virtual credits purchased by users but not yet redeemed and is recorded in other current liabilities on the consolidated balance sheets. Principal 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 service arrangements, the Company does not control the promised goods or services and, therefore, records the net amount of revenue earned as a commission. See Note 4 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, bonuses, benefits and share-based compensation for dedicated personnel. These costs are primarily variable in nature and should, in large part, correlate with the change in revenue. Revenue share and market access fees consist primarily of amounts paid to local land-based partners that hold the applicable gaming license, providing us the ability to offer our real-money online offerings in the respective jurisdictions. Our platform and content fees are primarily driven by costs associated with third-party casino content, sports betting trading services and certain elements of our platform technology, such as geolocation and know-your-customer. Gaming taxes primarily relate to state taxes and are determined on a jurisdiction-by-jurisdiction basis. We incur payment processing costs on player deposits and occasionally chargebacks (i.e., when a payment processor contractually disallows customer deposits in the normal course of business). |
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. These costs also include salaries, bonuses, benefits and share-based compensation 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 service fees (related to legal, compliance, accounting and consulting), rent expense, and insurance costs. |
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 11 for additional information about share-based compensation. |
Income Taxes | Income Taxes Rush Street Interactive, Inc. is a corporation and, as a result, is subject to U.S. federal, state, and foreign income taxes. RSILP is treated as a partnership for U.S. federal income tax purposes and therefore does not pay U.S. federal income tax on its taxable income. Instead, the RSILP unitholders, including the Company, are liable for U.S. federal income tax on their respective shares of RSILP’s taxable income reported on the unitholders’ U.S. federal income tax returns. RSILP is liable for income taxes in those states not recognizing its status as a partnership for U.S. 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 it 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 (Loss) Per Share Basic net earnings (loss) 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 same period. Diluted net earnings (loss) per share of Class A Common Stock is computed by dividing net earnings (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. The dilutive effect of outstanding awards or financial instruments, if any, is reflected in diluted earnings (loss) 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 (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 consolidated financial statements. Therefore, earnings (loss) 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. |
Foreign Currency | Foreign Currency The Company’s reporting currency is the U.S. dollar while the functional currency of subsidiaries not deemed the U.S. dollar include the Colombian Peso, Mexican Peso and Canadian Dollar. The financial statements of non-U.S. subsidiaries are translated into U.S. dollars in accordance with ASC 830, Foreign Currency Matters , using period-end exchange rates for assets and liabilities, and average exchange rates for the period for revenues, costs, and expenses and historical exchange 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). If transactions are recorded in a currency other than the subsidiary’s functional currency, remeasurement into the functional currency is required and may result in transaction gains or losses. Transaction losses were $1.9 million for the year ended December 31, 2022 as compared to less than $0.1 million for the years ended December 31, 2021 and 2020. Amounts are recorded in general administrative and other on the Company’s consolidated statements of operations. |
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 model, 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. As of December 31, 2022 and 2021, the recorded values of current assets and current liabilities approximate fair value due to the short-term nature of these instruments. |
Recently Adopted Accounting Pronouncements And Recent Accounting Pronouncements Not Yet Adopted | Recent Accounting Pronouncements Not Yet Adopted In June 2016, the Financial Accounting Standards Board (“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 that 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 beginning January 1, 2023. The Company is finalizing the assessment of the impact of the adoption of this ASU on its consolidated financial statements as of December 31, 2022. The adoption is not expected to have a material impact to the consolidated financial statements. In August 2020, the FASB issued ASU 2020-6, 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 U.S. 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. |
Description of Business (Tables
Description of Business (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Products and Services by Location | As of December 31, 2022, RSI offered real-money online casino, online sports betting, retail sports betting and/or retail sports services in the 14 U.S. states and three international jurisdictions as outlined in the table below. Jurisdictions Online Casino Online Sports Retail Sports Domestic: Arizona ü Colorado ü Connecticut ü ü Illinois ü ü Indiana ü ü Iowa ü Louisiana ü Maryland ü ü Michigan ü ü ü New Jersey ü ü New York ü ü Pennsylvania ü ü ü Virginia ü West Virginia ü ü International: Colombia ü ü Ontario (Canada) ü ü Mexico ü ü |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Accounting Policies [Abstract] | |
Schedule of Cash and Cash Equivalents | The following table reconciles cash and cash equivalents and restricted cash in the consolidated balance sheets to the totals shown on the consolidated statements of cash flows: December 31, ($ in thousands) 2022 2021 Cash and cash equivalents (1) $ 179,723 $ 281,030 Restricted cash 26,358 19,299 Total cash, cash equivalents and restricted cash $ 206,081 $ 300,329 (1) The Company had cash equivalents of $1.0 million and nil as of December 31, 2022 and 2021, respectively. Cash equivalents are composed of certificates of deposits with original maturities of 90 days or less. |
Property, Plant and Equipment | Additions and improvements are capitalized, while repairs and maintenance are expensed as incurred. Useful lives of each asset class are as follows: Asset Useful Life Computers, software and related equipment 3 years Furniture and fixtures 4 years Operating equipment and servers 5 years Leasehold improvements Lesser of the lease terms or the estimated useful lives of the improvements, generally 1–10 years As set forth in the table below, property and equipment, net as of December 31, 2022 and 2021 are $9.8 million and $7.2 million, respectively. The balances as of December 31, 2022 and 2021 also include finance lease right-of-use assets, net. The balances consist of the following: December 31, ($ in thousands) 2022 2021 Computers, software and related equipment $ 4,050 $ 1,674 Operating equipment and servers 4,610 3,439 Furniture 600 433 Leasehold improvements 640 494 Property and equipment not yet placed into service 816 676 Total property and equipment 10,716 6,716 Less: accumulated depreciation (3,818) (1,803) 6,898 4,913 Finance lease right-of-use assets 3,112 2,547 Less: accumulated amortization (246) (228) 2,866 2,319 Property and equipment, net $ 9,764 $ 7,232 |
Business Combination (Tables)
Business Combination (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Business Combinations [Abstract] | |
Schedule Of Reverse Recapitalization | The following table reconciles the elements of the Business Combination to the consolidated statement of cash flow and the consolidated statement of changes in equity for the year ended December 31, 2020: ($ in thousands) Business 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 statement of operations. The number of shares of common stock issued immediately following the consummation of the Business Combination are as follows: Number of 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. |
Revenue Recognition (Table)
Revenue Recognition (Table) | 12 Months Ended |
Dec. 31, 2022 | |
Revenue from Contract with Customer [Abstract] | |
Summary of Disaggregation of Revenue | Disaggregation of revenue for the years ended December 31, 2022, 2021 and 2020 is as follows: Years Ended ($ in thousands) 2022 2021 2020 Online casino and online sports betting $ 576,573 $ 480,065 $ 273,761 Retail sports betting 11,713 3,828 1,205 Social gaming 3,926 4,212 3,534 Total revenue $ 592,212 $ 488,105 $ 278,500 |
Summary of Revenue by Geographic Region | The following table presents the Company’s revenue by geographic region for the years ended December 31, 2022, 2021 and 2020: Years Ended ($ in thousands) 2022 2021 2020 United States and Canada $ 539,887 $ 452,607 $ 263,214 Latin America, including Mexico 52,325 35,498 15,286 Total revenue $ 592,212 $ 488,105 $ 278,500 |
Summary of Deferred Revenue | The deferred revenue activity for the years ended December 31, 2022, 2021 and 2020 was as follows: Years Ended ($ in thousands) 2022 2021 2020 Deferred revenue, beginning of period $ 4,637 $ 1,797 $ 321 Deferred revenue, end of period 7,840 4,637 1,797 Revenue recognized in the year from amounts included in deferred revenue at the beginning of the year 4,637 1,797 321 |
Intangible Assets, Net (Tables)
Intangible Assets, Net (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Intangible Assets, Net (Excluding Goodwill) [Abstract] | |
Schedule of Intangible Assets, net | The Company has the following intangible assets, net as of December 31, 2022 and 2021, respectively: ($ in thousands) Weighted Average Gross Accumulated Net License Fees December 31, 2022 8.44 $ 54,334 $ (12,363) $ 41,971 December 31, 2021 8.61 $ 49,226 $ (5,582) $ 43,644 Internally Developed Software December 31, 2022 2.51 $ 20,860 $ (3,490) $ 17,370 December 31, 2021 2.96 $ 4,091 $ (286) $ 3,805 Developed Technology December 31, 2022 7.00 $ 5,931 $ (741) $ 5,190 December 31, 2021 8.00 $ 5,931 $ — $ 5,931 Trademark Asset December 31, 2022 4.42 $ 5,088 $ (594) $ 4,494 December 31, 2021 N/A $ — $ — $ — |
Schedule of estimated future amortization of license fees | At December 31, 2022, estimated future amortization of intangible assets is as follows ($ in thousands): ($ in thousands) Year ended December 31, 2023 $ 15,260 Year ended December 31, 2024 13,213 Year ended December 31, 2025 10,230 Year ended December 31, 2026 7,094 Year ended December 31, 2027 5,510 Thereafter 17,718 Total $ 69,025 |
Property and Equipment, Net (Ta
Property and Equipment, Net (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Property, Plant and Equipment [Abstract] | |
Property, Plant and Equipment | Additions and improvements are capitalized, while repairs and maintenance are expensed as incurred. Useful lives of each asset class are as follows: Asset Useful Life Computers, software and related equipment 3 years Furniture and fixtures 4 years Operating equipment and servers 5 years Leasehold improvements Lesser of the lease terms or the estimated useful lives of the improvements, generally 1–10 years As set forth in the table below, property and equipment, net as of December 31, 2022 and 2021 are $9.8 million and $7.2 million, respectively. The balances as of December 31, 2022 and 2021 also include finance lease right-of-use assets, net. The balances consist of the following: December 31, ($ in thousands) 2022 2021 Computers, software and related equipment $ 4,050 $ 1,674 Operating equipment and servers 4,610 3,439 Furniture 600 433 Leasehold improvements 640 494 Property and equipment not yet placed into service 816 676 Total property and equipment 10,716 6,716 Less: accumulated depreciation (3,818) (1,803) 6,898 4,913 Finance lease right-of-use assets 3,112 2,547 Less: accumulated amortization (246) (228) 2,866 2,319 Property and equipment, net $ 9,764 $ 7,232 |
Accrued Expenses (Tables)
Accrued Expenses (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Payables and Accruals [Abstract] | |
Schedule of Accrued Expenses and Other Current Liabilities | The following table provides a summary of the accrued expenses at December 31, 2022 and 2021: December 31, ($ in thousands) 2022 2021 Accrued compensation and related expenses $ 10,077 $ 6,038 Accrued operating expenses 24,178 15,955 Accrued marketing expenses 27,315 21,948 Accrued professional fees 1,620 1,753 Due to affiliates 649 1,005 Other 1,064 1,588 Total accrued expenses $ 64,903 $ 48,287 |
Warrant Liabilities (Tables)
Warrant Liabilities (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Warrants and Rights Note Disclosure [Abstract] | |
Fair Value Measurement Inputs and Valuation Techniques | The following table provides quantitative information regarding Level 3 fair value measurement inputs at their measurement dates: March 26, December 31, December 29, Exercise price $ 11.50 $ 11.50 $ 11.50 Stock price $ 15.96 $ 22.76 $ 21.65 Volatility 42.6% 41.4% 41.4% Term (years) 4.77 5.00 5.00 Risk-free interest rate 0.76% 0.37% 0.36% 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: Fair Value Valuation Observable (O) or Range 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% |
Schedule Of Warrant Liabilities, Activity | The following table summarizes the fair values of warrant liabilities and change in fair value at each measurement date: Public Warrants (Level 1) Private Warrants (Level 3) Total Fair value of warrants at December 29, 2020 $ 92,633 $ 88,638 $ 181,271 Change in fair value of warrant liability (1) (4,554) (6,608) (11,162) Fair value of warrants at December 31, 2020 $ 88,079 $ 82,030 $ 170,109 Change in fair value of warrant liability (10,570) (31,232) (41,802) Fair value of warrants at redemption (77,509) (50,798) (128,307) Fair value of warrants at December 31, 2021 $ — $ — $ — (1) This amount represents the change in fair value of warrant liability, excluding the effect of $4.0 million of transactions costs incurred in connection with the issuance of the Warrants. |
Earnout Interests Liability (Ta
Earnout Interests Liability (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Earnout Interests Liability [Abstract] | |
Fair Value Measurement Inputs and Valuation Techniques | The following table provides quantitative information regarding Level 3 fair value measurement inputs at their measurement dates: March 26, December 31, December 29, Exercise price $ 11.50 $ 11.50 $ 11.50 Stock price $ 15.96 $ 22.76 $ 21.65 Volatility 42.6% 41.4% 41.4% Term (years) 4.77 5.00 5.00 Risk-free interest rate 0.76% 0.37% 0.36% 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: Fair Value Valuation Observable (O) or Range 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% |
Schedule Of Earnout Interests Liability, Activity | Earnout Interests Liability Total December 29, 2020 $ 348,710 Change in fair value of earnout interests liability 2,338 December 31, 2020 $ 351,048 Change in fair value of earnout interests liability 13,740 Settlement of earnout interests liability (364,788) December 31, 2021 $ — |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Equity [Abstract] | |
Schedule of Noncontrolling Interests | The following table summarizes the changes in non-controlling interests owned: Non-Controlling Interest % Non-controlling interest % as of December 31, 2021 72.20 % Issuance of Class A Common Stock upon the conversion of RSILP Unit Exchanges (1.46) % Issuance of Class A Common Stock as purchase consideration (0.02) % Issuance of Class V Common Stock as purchase consideration 0.06 % Issuance of Class A Common Stock in connection with the vesting of certain share-based equity grants (0.23) % Non-controlling interest % as of December 31, 2022 70.55 % The non-controlling interests owned 72.20% and 76.89% of the RSILP Units outstanding as of December 31, 2021 and 2020, respectively. The following table summarizes the changes in non-controlling interests owned: Non-Controlling Interest % Non-controlling interest % as of December 31, 2020 76.89 % Issuance of RSILP units in connection with the vesting of earnout interest in January 2021 1.24 % Issuance of Class A Common Stock in connection with the exercise of the Warrants (4.98) % Issuance of Class A Common Stock in connection with the vesting of certain share-based equity grants 1 (0.38) % Repurchases of Class A Common Stock 0.08 % Issuance of Class A Common Stock upon the conversion of RSILP Unit Exchanges (0.59) % Issuance of Class A Common Stock as purchase consideration (0.06) % Non-controlling interest % as of December 31, 2021 72.20 % 1 Includes reissuance of Class A Common Stock previously repurchased. |
Share-Based Compensation (Table
Share-Based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Share-Based Payment Arrangement [Abstract] | |
Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions | December 31, December 31, Volatility rate 70.93% to 71.00% 56.08 % Risk-free interest rate 4.32% to 4.39% 0.39 % Average expected life (in years) 2.3 to 3.0 3.0 Dividend yield None None Stock price at grant date $ 3.95 $ 15.40 December 31, December 31, Volatility rate 58.98 % 53.52 % Risk-free interest rate 3.68 % 1.66 % Average expected life (in years) 5.6 5.4 Dividend yield None None Stock price at grant date $ 4.07 $ 15.40 Exercise price $ 4.07 $ 15.40 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, Dividend yield — Volatility factor 45 % Risk-free interest rate 0.12 % Time to liquidity (in years) 0 Lack of marketability discount 0.0 % |
Schedule of Stock Options Roll Forward | RSU and stock option activity for the year ended December 31, 2022 were as follows: RSUs Options Number of Weighted average grant price Number of Units Weighted average exercise price Unvested balance at December 31, 2021 3,076,158 $ 16.08 96,827 $ 15.40 Granted 5,542,010 4.17 790,339 4.07 Vested (1,020,874) 14.67 (32,278) 15.40 Forfeited (104,681) 14.36 — — Unvested balance at December 31, 2022 7,492,613 $ 7.48 854,888 $ 4.93 RSU and stock option activity for the year ended December 31, 2021 were as follows: RSUs Options Number of Weighted average grant price Number of Units Weighted average exercise price Unvested balance at December 31, 2020 — $ — — $ — Granted 4,621,440 16.04 130,565 15.40 Vested (1,457,613) 15.84 — — Forfeited (87,669) 17.89 (33,738) 15.40 Unvested balance at December 31, 2021 3,076,158 $ 16.08 96,827 $ 15.40 |
Schedule of Unvested Restricted Stock Units Roll Forward | RSU and stock option activity for the year ended December 31, 2022 were as follows: RSUs Options Number of Weighted average grant price Number of Units Weighted average exercise price Unvested balance at December 31, 2021 3,076,158 $ 16.08 96,827 $ 15.40 Granted 5,542,010 4.17 790,339 4.07 Vested (1,020,874) 14.67 (32,278) 15.40 Forfeited (104,681) 14.36 — — Unvested balance at December 31, 2022 7,492,613 $ 7.48 854,888 $ 4.93 RSU and stock option activity for the year ended December 31, 2021 were as follows: RSUs Options Number of Weighted average grant price Number of Units Weighted average exercise price Unvested balance at December 31, 2020 — $ — — $ — Granted 4,621,440 16.04 130,565 15.40 Vested (1,457,613) 15.84 — — Forfeited (87,669) 17.89 (33,738) 15.40 Unvested balance at December 31, 2021 3,076,158 $ 16.08 96,827 $ 15.40 The summary of B-1 Units’ activity is as follows: Number of Unvested balance at December 31, 2019 522,086 Granted 683,889 Vested (1,205,975) Unvested balance at December 31, 2020 — |
Share-based Payment Arrangement, Expensed and Capitalized, Amount | Share-based compensation expense for the years ended December 31, 2022, 2021 and 2020 was as follows: Years Ended ($ in thousands) 2022 2021 2020 Costs of revenue $ 987 $ 1,808 $ — Advertising and promotions 2,048 3,605 — General administration and other 15,656 19,499 144,733 Total share-based compensation expense $ 18,691 $ 24,912 $ 144,733 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Income Tax Disclosure [Abstract] | |
Schedule of Components of Income Tax Expense (Benefit) | The components of the income tax expense are: Years Ended ($ in thousands) 2022 2021 2020 Current income taxes: Federal $ (118) $ 149 $ — State and local (34) 25 — Foreign 9,137 4,551 2,708 8,985 4,725 2,708 Deferred income taxes: Federal — — — State and local — — — Foreign (24) (37) 211 (24) (37) 211 Income tax expense $ 8,961 $ 4,688 $ 2,919 |
Schedule of Effective Income Tax Rate Reconciliation | 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: Years Ended ($ in thousands) 2022 2021 2020 Net loss before income taxes $ (125,371) $ (66,404) $ (128,726) Less: net loss before Reverse Recapitalization — — (133,404) Less: net income (loss) before income taxes attributable to non-controlling interest (89,224) (48,258) 3,597 Net loss attributable to Rush Street Interactive Inc. before income taxes (36,147) (18,146) 1,081 Income tax expense (benefit) at the federal statutory rate (7,591) (3,811) 227 State income taxes, net of federal benefit (34) 25 100 Other (552) (67) — Foreign operations 9,113 4,514 2,919 Change in valuation allowance 8,025 4,027 (327) Income tax expense $ 8,961 $ 4,688 $ 2,919 |
Schedule of Deferred Tax Assets and Liabilities | Significant components of the deferred tax assets and liabilities are as follows: Years Ended ($ in thousands) 2022 2021 Deferred tax assets: Investment in subsidiaries $ 134,586 $ 126,393 Net operating losses 26,394 9,065 Imputed interest 1,638 1,147 Share-based compensation 366 610 Other assets 165 99 Total gross deferred tax assets 163,149 137,314 Valuation allowance (163,029) (137,214) Total deferred tax assets, net of valuation allowance 120 100 Deferred tax liabilities: Investment in subsidiaries — — Total gross deferred tax liabilities — — Net deferred tax assets $ 120 $ 100 |
Earnings (Loss) Per Share (Tabl
Earnings (Loss) Per Share (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Earnings Per Share [Abstract] | |
Schedule of Basic and Diluted Earnings (Loss) Loss per Share | The computation of net earnings (loss) per share attributable to RSI and weighted-average shares of the Company’s Class A Common Stock outstanding for the year ended December 31, 2022, 2021 and 2020 are as follows (amounts in thousands, except for share and per share amounts): Years Ended 2022 2021 2020 Numerator: Net loss $ (134,332) $ (71,092) $ (131,645) Less: Net loss attributable to RSILP prior to the Business Combination — — (136,323) Less: Net income (loss) attributable to non-controlling interests after the Business Combination (95,701) (51,603) 3,597 Net income (loss) attributable to Rush Street Interactive, Inc. – basic (38,631) (19,489) 1,081 Effect of dilutive securities: Public, Private Placement and Working Capital Warrants, net of amounts attributable to non-controlling interests — (9,569) (1,656) Net loss attributable to Rush Street Interactive, Inc. – diluted $ (38,631) $ (29,058) $ (575) Denominator Weighted average common shares outstanding – basic 63,532,906 56,265,541 43,579,704 Weighted average effect of dilutive securities: Public Warrants (1) — 677,746 5,481,341 Private Placement and Working Capital Warrants (1) — 483,598 3,181,561 Weighted average common shares outstanding – diluted 63,532,906 57,426,885 52,242,606 Net earnings (loss) per Class A Common Share - basic $ (0.61) $ (0.35) $ 0.02 Net loss per Class A Common Share - diluted $ (0.61) $ (0.51) $ (0.01) (1) Calculated using the treasury stock method. |
Schedule of Anti-dilutive Securities Excluded from Computation of Diluted Shares Outstanding | The Company excluded the following securities from its computation of diluted shares outstanding, as their effect would have been anti-dilutive: December 31, 2022 2021 2020 RSILP Units (1) 155,955,584 158,702,329 160,000,000 Earnout Interests – Class A Common Stock (2) — — 1,212,813 Unvested Restricted Stock Units 7,492,613 3,076,158 — Unvested Stock Options 854,888 96,827 — (1) These RSILP Units are held by the Sellers. Pursuant to the Business Combination, they 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 amount as of December 31, 2020 includes 15,000,000 RSILP Units issued to the Sellers in the Business Combination that remained subject to certain restrictions pending the achievement of certain earnout targets. The restricted RSILP Units became unrestricted on January 13, 2021 upon the achievement of certain earnout targets. (2) These Earnout Interests represent the Class A Common Stock held by the Founder Holders pursuant to the Business Combination. |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Leases [Abstract] | |
Lease, Cost | The components of lease expense for the years ended December 31, 2022, 2021 and 2020 were as follows: Years Ended ($ in thousands) 2022 2021 2020 Operating lease cost $ 676 $ 268 $ 252 Variable lease cost 275 528 132 Short-term lease cost 436 179 — Total lease expenses $ 1,387 $ 975 $ 384 Years Ended ($ in thousands) 2022 2021 2020 Operating cash flows from operating leases $ 653 $ 355 $ 253 Right-of-use assets obtained in exchange for new or modified operating lease liabilities $ 965 $ 810 $ 1,305 Right-of-use assets obtained in exchange for new or modified finance lease liabilities $ 1,124 $ 2,547 N/A Weighted-average remaining lease term (in years) – operating leases 3.1 3.2 2.6 Weighted-average remaining lease term (in years) – finance leases 3.0 4.6 N/A Weighted-average discount rate – operating leases 6.2 % 6.0 % 6.0 % Weighted-average discount rate – finance leases 6.0 % 6.0 % N/A |
Lessee, Balance Sheet Disclosures | The Company records lease activity within the following financial statement line items: Account Financial Statement Line Item Operating lease right-of-use asset Operating lease right-of-use asset Finance lease right-of-use asset, net Property and equipment, net Operating lease liabilities Operating lease liabilities, short-term and long-term Finance lease liabilities Other current liabilities and Other long-term liabilities Operating lease expense General administrative and other Finance lease amortization expense Depreciation and amortization Finance lease interest expense Interest expense, net |
Lessee, Operating Lease, Liability, Maturity | Maturity of operating lease liabilities as of December 31, 2022 is as follows ($ in thousands): ($ in thousands) Year ending December 31, 2023 $ 808 Year ending December 31, 2024 591 Year ending December 31, 2025 378 Year ending December 31, 2026 198 Year ending December 31, 2027 99 Total undiscounted future cash flows 2,074 Less: present value discount (175) Operating lease liabilities $ 1,899 |
Finance Lease, Liability, Fiscal Year Maturity | Maturity of finance lease liabilities as of December 31, 2022 is as follows ($ in thousands): ($ in thousands) Year ending December 31, 2023 $ 114 Year ending December 31, 2024 114 Year ending December 31, 2025 114 Year ending December 31, 2026 — Year ending December 31, 2027 — Total undiscounted future cash flows 342 Less: present value discount (29) Finance lease liabilities $ 313 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Future Minimum Payments Under 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): Year ending December 31, 2023 $ 30,624 Year ending December 31, 2024 14,501 Year ending December 31, 2025 11,218 Year ending December 31, 2026 4,788 Year ending December 31, 2027 5,032 Thereafter 29,789 Total (1) $ 95,952 (1) Includes operating lease and finance lease obligations under non-cancelable lease contracts totaling $2.6 million, obligations under non-cancelable contracts with marketing vendors totaling $34.5 million, license and market access commitments totaling $58.8 million. Certain market access arrangements require the Company to make additional payments at a contractual milestone date if the market access fees paid up until that milestone date do not meet a minimum contractual threshold. In these instances, the Company calculates future minimum payment as the total milestone payment less any amounts already paid to the partner and includes such payments in the period in which the milestone date occurs. |
Description of Business (Detail
Description of Business (Details) | Dec. 31, 2022 segment | Dec. 31, 2021 | Dec. 31, 2020 |
Description of Business | |||
Number of states in which entity operates | 14 | ||
RSILP | RSI ASLP, Inc. | |||
Description of Business | |||
Controlling ownership interest | 0.2945 | ||
RSILP | Owners Other Than Rush Street Interactive | |||
Description of Business | |||
Noncontrolling ownership interest | 70.55% | 72.20% | 76.89% |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Narrative (Details) | 1 Months Ended | 12 Months Ended | |||||
Jun. 10, 2022 USD ($) $ / shares shares | Dec. 21, 2021 USD ($) shares | Dec. 29, 2020 USD ($) $ / shares shares | Mar. 31, 2021 USD ($) | Dec. 31, 2022 USD ($) segment $ / shares shares | Dec. 31, 2021 USD ($) $ / shares | Dec. 31, 2020 USD ($) shares | |
Accounting Policies [Line Items] | |||||||
Operating cash flows | $ (60,321,000) | $ (48,186,000) | $ 16,179,000 | ||||
Working capital | $ 120,500,000 | ||||||
Number of operating segments | segment | 1 | ||||||
Allowance for doubtful accounts | $ 0 | 0 | |||||
Earnout interests liability | $ 348,710,000 | 0 | 351,048,000 | ||||
Conversion ratio | 0.5 | ||||||
Fair value of private warrants | $ 181,271,000 | 0 | 0 | 170,109,000 | |||
Foreign currency translation adjustment | $ 1,900,000 | $ 100,000 | $ 100,000 | ||||
Public Warrants | |||||||
Accounting Policies [Line Items] | |||||||
Cash proceeds from warrants exercised | $ 131,600,000 | ||||||
Warrants outstanding (in shares) | shares | 0 | 11,500,000 | |||||
Private Warrants | |||||||
Accounting Policies [Line Items] | |||||||
Warrants outstanding (in shares) | shares | 0 | 6,675,000 | |||||
Owners Other Than Rush Street Interactive | RSILP | |||||||
Accounting Policies [Line Items] | |||||||
Noncontrolling ownership interest | 70.55% | 72.20% | 76.89% | ||||
Special Limited Partner | |||||||
Accounting Policies [Line Items] | |||||||
Tax receivable agreement, percentage of net certain tax benefits payable | 85% | ||||||
Special Limited Partner | RSILP | |||||||
Accounting Policies [Line Items] | |||||||
Controlling ownership interest | 0.2945 | ||||||
IPO | Public Warrants | |||||||
Accounting Policies [Line Items] | |||||||
Number of shares issuable per warrant (in shares) | shares | 1 | ||||||
Exercise price of warrants | $ / shares | $ 11.50 | ||||||
IPO | dMy Technology Group, Inc. | |||||||
Accounting Policies [Line Items] | |||||||
Number of units issued (in shares) | shares | 23,000,000 | ||||||
Price per unit (in USD per share) | $ / shares | $ 10 | ||||||
Private Placement | dMy Technology Group, Inc. | Private Warrants | |||||||
Accounting Policies [Line Items] | |||||||
Number of units issued (in shares) | shares | 6,600,000 | ||||||
Boom Entertainment | |||||||
Accounting Policies [Line Items] | |||||||
Payments to acquire businesses and interest in affiliates | $ 1,500,000 | ||||||
Impairment | $ 0 | ||||||
Ownership interest | 0.20 | ||||||
Internally Developed Software | Minimum | |||||||
Accounting Policies [Line Items] | |||||||
Useful life of assets | 3 years | ||||||
Internally Developed Software | Maximum | |||||||
Accounting Policies [Line Items] | |||||||
Useful life of assets | 4 years | ||||||
Intellectual Property | |||||||
Accounting Policies [Line Items] | |||||||
Useful life of assets | 8 years | ||||||
ROI Assets | |||||||
Accounting Policies [Line Items] | |||||||
Payments for asset acquisition | $ 3,300,000 | ||||||
ROI Assets | Intellectual Property | |||||||
Accounting Policies [Line Items] | |||||||
Asset acquisition, legal fees | 100,000 | ||||||
Asset acquisition, capitalized amount | 5,900,000 | ||||||
Payments for asset acquisition | $ 5,800,000 | ||||||
Rush Street Productions, LLC | |||||||
Accounting Policies [Line Items] | |||||||
Payments to acquire productive assets | $ 1,500,000 | ||||||
Cash- DMYT trust and cash, net of redemptions | 700,000 | ||||||
Assumed outstanding liabilities | 500,000 | ||||||
Asset acquisition, legal fees | 400,000 | ||||||
Asset acquisition, capitalized amount | 4,200,000 | $ 4,700,000 | |||||
Acquisition fees | $ 400,000 | ||||||
Finite-lived intangible asset, useful life | 5 years | ||||||
Rush Street Productions, LLC | Trademark Asset | |||||||
Accounting Policies [Line Items] | |||||||
Capitalized trademark intangible asset | $ 5,100,000 | ||||||
Class A Common Stock | |||||||
Accounting Policies [Line Items] | |||||||
Common stock, par value (in USD per share) | $ / shares | $ 0.0001 | $ 0.0001 | |||||
Class A Common Stock | Private Warrant Holder | |||||||
Accounting Policies [Line Items] | |||||||
Number of shares issuable per warrant (in shares) | shares | 1 | ||||||
Fair value per share (in USD per share) | $ / shares | $ 11.50 | ||||||
Class A Common Stock | Special Limited Partner | |||||||
Accounting Policies [Line Items] | |||||||
Common stock, par value (in USD per share) | $ / shares | $ 0.0001 | ||||||
Class A Common Stock | IPO | dMy Technology Group, Inc. | |||||||
Accounting Policies [Line Items] | |||||||
Conversion ratio | 1 | ||||||
Class A Common Stock | Private Placement | |||||||
Accounting Policies [Line Items] | |||||||
Number of units issued (in shares) | shares | 16,043,002 | ||||||
Price per unit (in USD per share) | $ / shares | $ 10 | ||||||
Class A Common Stock | ROI Assets | |||||||
Accounting Policies [Line Items] | |||||||
Asset acquisition, shares transferred (in shares) | shares | 158,127 | ||||||
Asset acquisition, value of shares transferred | $ 2,500,000 | ||||||
Class A Common Stock | Rush Street Productions, LLC | |||||||
Accounting Policies [Line Items] | |||||||
Asset acquisition, number of shares issued (in shares) | shares | 60,000 | ||||||
Asset acquisition, shares issued, value | $ 300,000 | ||||||
Warrant | Private Placement | dMy Technology Group, Inc. | |||||||
Accounting Policies [Line Items] | |||||||
Number of units issued (in shares) | shares | 75,000 | ||||||
Class V Common Stock | |||||||
Accounting Policies [Line Items] | |||||||
Common stock, par value (in USD per share) | $ / shares | $ 0.0001 | $ 0.0001 | |||||
Class V Common Stock | Special Limited Partner | |||||||
Accounting Policies [Line Items] | |||||||
Common stock, par value (in USD per share) | $ / shares | $ 0.0001 | ||||||
Class V Common Stock | Rush Street Productions, LLC | |||||||
Accounting Policies [Line Items] | |||||||
Asset acquisition, shares issued, value | $ 2,400,000 | ||||||
RSILP Units | |||||||
Accounting Policies [Line Items] | |||||||
Number of units issued (in shares) | shares | 12,500,000 | ||||||
RSILP Units | Rush Street Productions, LLC | |||||||
Accounting Policies [Line Items] | |||||||
Asset acquisition, number of shares issued (in shares) | shares | 480,000 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Property, Plant and Equipment (Details) - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Accounting Policies [Abstract] | ||||
Cash and cash equivalents | $ 179,723,000 | $ 281,030,000 | ||
Restricted cash | 26,358,000 | 19,299,000 | ||
Total cash, cash equivalents and restricted cash | 206,081,000 | 300,329,000 | $ 262,065,000 | $ 10,543,000 |
Cash equivalents | $ 1,000,000 | $ 0 |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies - Property and Equipment, net (Details) | 12 Months Ended |
Dec. 31, 2022 | |
Computer Equipment | Minimum | |
Property and equipment, net | |
Useful life of assets | 3 years |
Computer Equipment | Maximum | |
Property and equipment, net | |
Useful life of assets | 5 years |
Furniture and fixtures | |
Property and equipment, net | |
Useful life of assets | 4 years |
Leasehold improvements | Minimum | |
Property and equipment, net | |
Useful life of assets | 1 year |
Leasehold improvements | Maximum | |
Property and equipment, net | |
Useful life of assets | 10 years |
Internally Developed Software | Minimum | |
Property and equipment, net | |
Useful life of assets | 3 years |
Internally Developed Software | Maximum | |
Property and equipment, net | |
Useful life of assets | 4 years |
Business Combination - Narrativ
Business Combination - Narrative (Details) - USD ($) $ / shares in Units, $ in Thousands | 1 Months Ended | 12 Months Ended | ||||||
Jun. 29, 2021 | Jan. 13, 2021 | Dec. 29, 2020 | Jan. 31, 2021 | Dec. 31, 2022 | Dec. 31, 2020 | Jun. 10, 2022 | Dec. 31, 2021 | |
Business Acquisition [Line Items] | ||||||||
Proceeds form PIPE financing | $ 160,430 | |||||||
Common stock, shares outstanding (in shares) | 204,792,517 | |||||||
Number of trading days to calculate VWAPs | 10 days | |||||||
Number of consecutive trading days to calculate VWAPs | 20 days | |||||||
Special Limited Partner | ||||||||
Business Acquisition [Line Items] | ||||||||
Tax receivable agreement, percentage of net certain tax benefits payable | 85% | |||||||
Class A Common Stock | ||||||||
Business Acquisition [Line Items] | ||||||||
Conversion of shares (in shares) | 1 | 5,750,000 | 1 | |||||
Redemption of shares (in shares) | 485 | |||||||
Common stock, par value (in USD per share) | $ 0.0001 | $ 0.0001 | ||||||
Common stock, shares outstanding (in shares) | 65,111,616 | 61,118,406 | ||||||
Common stock, shares issued (in shares) | 65,111,616 | 61,118,406 | ||||||
Class A Common Stock | Founder Holders | ||||||||
Business Acquisition [Line Items] | ||||||||
Common stock, shares outstanding (in shares) | 1,212,813 | |||||||
Class A Common Stock | Special Limited Partner | ||||||||
Business Acquisition [Line Items] | ||||||||
Common stock, par value (in USD per share) | $ 0.0001 | |||||||
Class A Common Stock | Private Placement | ||||||||
Business Acquisition [Line Items] | ||||||||
Number of units issued (in shares) | 16,043,002 | |||||||
Price per unit (in USD per share) | $ 10 | |||||||
Transfer of stock, cash consideration | $ 160,400 | |||||||
RSILP Units | ||||||||
Business Acquisition [Line Items] | ||||||||
Number of units issued (in shares) | 12,500,000 | |||||||
Shares retained (in shares) | 160,000,000 | |||||||
RSILP Units | Special Limited Partner | ||||||||
Business Acquisition [Line Items] | ||||||||
Transfer of stock, cash consideration | $ 125,000 | |||||||
Earnout Interest Units | ||||||||
Business Acquisition [Line Items] | ||||||||
Shares retained (in shares) | 15,000,000 | |||||||
Class V Common Stock | ||||||||
Business Acquisition [Line Items] | ||||||||
Conversion of shares (in shares) | 1 | |||||||
Common stock, par value (in USD per share) | $ 0.0001 | $ 0.0001 | ||||||
Common stock, shares outstanding (in shares) | 155,955,584 | 158,702,329 | ||||||
Shares canceled (in shares) | 1 | |||||||
Common stock, shares issued (in shares) | 155,955,584 | 158,702,329 | ||||||
Class V Common Stock | Special Limited Partner | ||||||||
Business Acquisition [Line Items] | ||||||||
Common stock, par value (in USD per share) | $ 0.0001 | |||||||
Class V Common Stock and RSILP Units | ||||||||
Business Acquisition [Line Items] | ||||||||
Common stock, shares issued (in shares) | 15,000,000 | |||||||
RSILP | ||||||||
Business Acquisition [Line Items] | ||||||||
Contributions for repurchase | $ 239,800 | |||||||
Aggregate amount of consideration paid | 125,000 | |||||||
Proceeds form PIPE financing | $ 160,400 | |||||||
Number of trading days to calculate VWAPs | 10 days | 10 days | ||||||
Number of consecutive trading days to calculate VWAPs | 20 days | 20 days | ||||||
VWAP share price (in USD per share) | $ 14 | |||||||
RSILP | VWAP, Scenario One | ||||||||
Business Acquisition [Line Items] | ||||||||
VWAP share price (in USD per share) | $ 12 | |||||||
Percentage of earnout interests released | 50% | |||||||
RSILP | VWAP, Scenario Two | ||||||||
Business Acquisition [Line Items] | ||||||||
VWAP share price (in USD per share) | $ 14 | |||||||
Percentage of earnout interests released | 100% | |||||||
RSILP | Maximum | ||||||||
Business Acquisition [Line Items] | ||||||||
Percentage of earnout interests no longer subject to restrictions | 100% | |||||||
Earnout interest based on revenue | $ 300,000 | |||||||
RSILP | Minimum | ||||||||
Business Acquisition [Line Items] | ||||||||
Percentage of earnout interests no longer subject to restrictions | 25% | |||||||
Earnout interest based on revenue | $ 270,000 | |||||||
RSILP | Class A Common Stock | Founder Holders | ||||||||
Business Acquisition [Line Items] | ||||||||
Common stock, shares outstanding (in shares) | 1,212,813 | |||||||
RSILP | RSILP Units | ||||||||
Business Acquisition [Line Items] | ||||||||
Number of units issued (in shares) | 1,212,813 | |||||||
Shares retained (in shares) | 15,000,000 | |||||||
RSILP | RSILP Units | dMy Technology Group, Inc. | ||||||||
Business Acquisition [Line Items] | ||||||||
Number of units issued (in shares) | 32,292,517 | |||||||
RSILP | Class V Common Stock | ||||||||
Business Acquisition [Line Items] | ||||||||
Number of units issued (in shares) | 160,000,000 | |||||||
Common stock, par value (in USD per share) | $ 0.0001 | |||||||
RSILP | Class V Common Stock | RSILP | ||||||||
Business Acquisition [Line Items] | ||||||||
Number of units issued (in shares) | 15,000,000 |
Business Combination - Schedule
Business Combination - Schedule Of Reverse Recapitalization (Details) $ in Thousands | 12 Months Ended | |||||||
Mar. 26, 2021 shares | Jan. 13, 2021 shares | Dec. 31, 2020 USD ($) | Dec. 29, 2020 vote shares | Dec. 28, 2020 shares | Dec. 31, 2022 vote shares | Dec. 31, 2020 USD ($) | Dec. 31, 2021 shares | |
Business Acquisition [Line Items] | ||||||||
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 | $ | $ 4,000 | 3,996 | ||||||
Net adjustment to total equity from the Business Combination | $ | $ (286,222) | |||||||
Common stock, shares outstanding (in shares) | 204,792,517 | |||||||
dMY common stock (in shares) | 22,999,515 | |||||||
Shares issued in PIPE financing (in shares) | 16,043,002 | |||||||
Number of votes per share | vote | 1 | |||||||
Sponsor shares | ||||||||
Business Acquisition [Line Items] | ||||||||
dMY common stock (in shares) | 5,750,000 | |||||||
Class A Common Stock | ||||||||
Business Acquisition [Line Items] | ||||||||
Common stock, shares outstanding (in shares) | 65,111,616 | 61,118,406 | ||||||
Less: redemption of DMYT shares (in shares) | (485) | |||||||
Shares issued in PIPE financing (in shares) | 2,571,808 | 1,212,813 | 11,442,389 | |||||
Shares issued in the Business Combination (in shares) | 44,792,517 | |||||||
Class V Common Stock | ||||||||
Business Acquisition [Line Items] | ||||||||
Common stock, shares outstanding (in shares) | 155,955,584 | 158,702,329 | ||||||
Shares issued in PIPE financing (in shares) | 15,000,000 | |||||||
Shares issued in the Business Combination (in shares) | 160,000,000 | |||||||
Number of votes per share | vote | 1 | |||||||
Class A Common Stock placed in escrow | ||||||||
Business Acquisition [Line Items] | ||||||||
dMY common stock (in shares) | 1,212,813 | |||||||
Class V Common Stock placed in escrow | ||||||||
Business Acquisition [Line Items] | ||||||||
Shares issued in the Business Combination (in shares) | 15,000,000 | |||||||
dMy Technology Group, Inc. | ||||||||
Business Acquisition [Line Items] | ||||||||
Common stock, shares outstanding (in shares) | 23,000,000 | |||||||
Less: redemption of DMYT shares (in shares) | (485) |
Revenue Recognition - Disaggreg
Revenue Recognition - Disaggregation of Revenue (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Disaggregation of Revenue [Line Items] | |||
Total revenue | $ 592,212 | $ 488,105 | $ 278,500 |
Online casino and online sports betting | |||
Disaggregation of Revenue [Line Items] | |||
Total revenue | 576,573 | 480,065 | 273,761 |
Retail sports betting | |||
Disaggregation of Revenue [Line Items] | |||
Total revenue | 11,713 | 3,828 | 1,205 |
Social gaming | |||
Disaggregation of Revenue [Line Items] | |||
Total revenue | $ 3,926 | $ 4,212 | $ 3,534 |
Revenue Recognition - Revenue b
Revenue Recognition - Revenue by Geographic Region (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Disaggregation of Revenue [Line Items] | |||
Total revenue | $ 592,212 | $ 488,105 | $ 278,500 |
United States And Canada | |||
Disaggregation of Revenue [Line Items] | |||
Total revenue | 539,887 | 452,607 | 263,214 |
Latin America And Mexico | |||
Disaggregation of Revenue [Line Items] | |||
Total revenue | $ 52,325 | $ 35,498 | $ 15,286 |
Revenue Recognition - Deferred
Revenue Recognition - Deferred Revenue (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Revenue from Contract with Customer [Abstract] | ||||
Deferred revenue | $ (7,840) | $ (4,637) | $ (1,797) | $ (321) |
Revenue recognized in the year from amounts included in deferred revenue at the beginning of the year | $ 4,637 | $ 1,797 | $ 321 |
Intangible Assets, Net - Schedu
Intangible Assets, Net - Schedule of Intangible Assets (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Finite-Lived Intangible Assets [Line Items] | |||
Total | $ 69,025 | $ 53,380 | |
Amortization of license expense | $ 11,600 | $ 3,000 | $ 1,600 |
License Fees | |||
Finite-Lived Intangible Assets [Line Items] | |||
Weighted Average Remaining Amortization Period (years) | 8 years 5 months 8 days | 8 years 7 months 9 days | |
Gross Carrying Amount | $ 54,334 | $ 49,226 | |
Accumulated Amortization | (12,363) | (5,582) | |
Total | $ 41,971 | $ 43,644 | |
Internally Developed Software | |||
Finite-Lived Intangible Assets [Line Items] | |||
Weighted Average Remaining Amortization Period (years) | 2 years 6 months 3 days | 2 years 11 months 15 days | |
Gross Carrying Amount | $ 20,860 | $ 4,091 | |
Accumulated Amortization | (3,490) | (286) | |
Total | $ 17,370 | $ 3,805 | |
Developed Technology | |||
Finite-Lived Intangible Assets [Line Items] | |||
Weighted Average Remaining Amortization Period (years) | 7 years | 8 years | |
Gross Carrying Amount | $ 5,931 | $ 5,931 | |
Accumulated Amortization | (741) | 0 | |
Total | $ 5,190 | 5,931 | |
Trademark Asset | |||
Finite-Lived Intangible Assets [Line Items] | |||
Weighted Average Remaining Amortization Period (years) | 4 years 5 months 1 day | ||
Gross Carrying Amount | $ 5,088 | 0 | |
Accumulated Amortization | (594) | 0 | |
Total | $ 4,494 | $ 0 |
Intangible Assets, Net - Estima
Intangible Assets, Net - Estimated future amortization (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Intangible Assets, Net (Excluding Goodwill) [Abstract] | ||
2023 | $ 15,260 | |
2024 | 13,213 | |
2025 | 10,230 | |
2026 | 7,094 | |
2027 | 5,510 | |
Thereafter | 17,718 | |
Total | $ 69,025 | $ 53,380 |
Property and Equipment, Net (De
Property and Equipment, Net (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Property and Equipment | |||
Total property and equipment | $ 10,716,000 | $ 6,716,000 | |
Less: accumulated depreciation | (3,818,000) | (1,803,000) | |
Property, plant and equipment, net | 6,898,000 | 4,913,000 | |
Finance lease right-of-use assets | 3,112,000 | 2,547,000 | |
Less: accumulated amortization | (246,000) | (228,000) | |
Total finance lease right-of-use asset | 2,866,000 | 2,319,000 | |
Property and equipment, net | 9,764,000 | 7,232,000 | |
Depreciation expense | 2,100,000 | 1,000,000 | $ 500,000 |
Amortization expense on finance lease right-of-use assets | 600,000 | 200,000 | $ 0 |
Computers, software and related equipment | |||
Property and Equipment | |||
Total property and equipment | 4,050,000 | 1,674,000 | |
Operating equipment and servers | |||
Property and Equipment | |||
Total property and equipment | 4,610,000 | 3,439,000 | |
Furniture and fixtures | |||
Property and Equipment | |||
Total property and equipment | 600,000 | 433,000 | |
Leasehold improvements | |||
Property and Equipment | |||
Total property and equipment | 640,000 | 494,000 | |
Property and equipment not yet placed into service | |||
Property and Equipment | |||
Total property and equipment | $ 816,000 | $ 676,000 |
Accrued Expenses (Details)
Accrued Expenses (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Payables and Accruals [Abstract] | ||
Accrued compensation and related expenses | $ 10,077 | $ 6,038 |
Accrued operating expenses | 24,178 | 15,955 |
Accrued marketing expenses | 27,315 | 21,948 |
Accrued professional fees | 1,620 | 1,753 |
Due to affiliates | 649 | 1,005 |
Other | 1,064 | 1,588 |
Total accrued expenses | $ 64,903 | $ 48,287 |
Warrant Liabilities - Narrative
Warrant Liabilities - Narrative (Details) $ / shares in Units, $ in Thousands | 1 Months Ended | 3 Months Ended | 12 Months Ended | ||||||||
Mar. 26, 2021 USD ($) shares | Jan. 13, 2021 shares | Dec. 31, 2020 USD ($) shares | Dec. 31, 2020 USD ($) shares | Dec. 29, 2020 USD ($) $ / shares shares | Mar. 31, 2021 USD ($) | Mar. 26, 2021 USD ($) | Dec. 31, 2022 USD ($) shares | Dec. 31, 2021 USD ($) | Dec. 31, 2020 USD ($) shares | Feb. 22, 2021 $ / shares shares | |
Class of Warrant or Right [Line Items] | |||||||||||
Conversion ratio | 0.5 | ||||||||||
Shares issued during period (in shares) | 16,043,002 | ||||||||||
Fair value of private warrants | $ | $ 170,109 | $ 170,109 | $ 181,271 | $ 0 | $ 0 | $ 170,109 | |||||
Change in fair value of warrant liabilities | $ | $ (11,200) | $ 11,162 | $ 41,800 | $ 0 | 41,802 | $ 7,166 | |||||
Class A Common Stock | |||||||||||
Class of Warrant or Right [Line Items] | |||||||||||
Shares issued during period (in shares) | 2,571,808 | 1,212,813 | 11,442,389 | ||||||||
Class A Common Stock | Public Warrant Holder | |||||||||||
Class of Warrant or Right [Line Items] | |||||||||||
Number of shares issuable per warrant (in shares) | 1 | 11,500,000 | |||||||||
Fair value per share (in USD per share) | $ / shares | $ 11.50 | $ 11.50 | |||||||||
Class A Common Stock | Private Warrant Holder | |||||||||||
Class of Warrant or Right [Line Items] | |||||||||||
Number of shares issuable per warrant (in shares) | 1 | ||||||||||
Fair value per share (in USD per share) | $ / shares | $ 11.50 | ||||||||||
Public Warrants | |||||||||||
Class of Warrant or Right [Line Items] | |||||||||||
Warrants exercised (in shares) | 11,442,389 | ||||||||||
Cash proceeds from warrants exercised | $ | $ 131,600 | ||||||||||
Warrants outstanding (in shares) | 11,500,000 | 11,500,000 | 0 | 11,500,000 | |||||||
Public Warrants | Fair Value, Inputs, Level 1 | |||||||||||
Class of Warrant or Right [Line Items] | |||||||||||
Fair value of private warrants | $ | $ 88,079 | $ 88,079 | $ 92,633 | $ 77,500 | 0 | $ 88,079 | |||||
Change in fair value of warrant liabilities | $ | $ 4,554 | 10,570 | |||||||||
Private Warrants | |||||||||||
Class of Warrant or Right [Line Items] | |||||||||||
Warrants outstanding (in shares) | 6,675,000 | 6,675,000 | 0 | 6,675,000 | |||||||
Private Warrants | Fair Value, Inputs, Level 3 | |||||||||||
Class of Warrant or Right [Line Items] | |||||||||||
Fair value of private warrants | $ | $ 50,800 | $ 82,030 | $ 82,030 | $ 88,638 | $ 50,800 | 0 | $ 82,030 | ||||
Change in fair value of warrant liabilities | $ | $ 6,608 | $ 31,232 | |||||||||
IPO | dMy Technology Group, Inc. | |||||||||||
Class of Warrant or Right [Line Items] | |||||||||||
Number of units issued (in shares) | 23,000,000 | ||||||||||
Price per unit (in USD per share) | $ / shares | $ 10 | ||||||||||
IPO | dMy Technology Group, Inc. | Class A Common Stock | |||||||||||
Class of Warrant or Right [Line Items] | |||||||||||
Conversion ratio | 1 | ||||||||||
IPO | Public Warrants | |||||||||||
Class of Warrant or Right [Line Items] | |||||||||||
Number of shares issuable per warrant (in shares) | 1 | ||||||||||
Private Placement | Class A Common Stock | |||||||||||
Class of Warrant or Right [Line Items] | |||||||||||
Number of units issued (in shares) | 16,043,002 | ||||||||||
Price per unit (in USD per share) | $ / shares | $ 10 | ||||||||||
Private Placement | dMy Technology Group, Inc. | Warrant | |||||||||||
Class of Warrant or Right [Line Items] | |||||||||||
Number of units issued (in shares) | 75,000 | ||||||||||
Private Placement | Private Warrants | dMy Technology Group, Inc. | |||||||||||
Class of Warrant or Right [Line Items] | |||||||||||
Number of units issued (in shares) | 6,600,000 |
Warrant Liabilities - Schedule
Warrant Liabilities - Schedule of Level 3 Inputs (Details - Fair Value, Inputs, Level 3 - Private Warrants | Mar. 26, 2021 $ / shares yr | Dec. 31, 2020 $ / shares yr | Dec. 29, 2020 $ / shares yr |
Exercise price | |||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||
Measurement input | 11.50 | 11.50 | 11.50 |
Stock price | |||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||
Measurement input | 15.96 | 22.76 | 21.65 |
Volatility | |||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||
Measurement input | 0.426 | 0.414 | 0.414 |
Term (years) | |||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||
Measurement input | yr | 4.77 | 5 | 5 |
Risk-free interest rate | |||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||
Measurement input | 0.0076 | 0.0037 | 0.0036 |
Warrant Liabilities - Schedul_2
Warrant Liabilities - Schedule Of Warrant Liabilities, Activity (Details - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||||
Dec. 31, 2020 | Dec. 31, 2020 | Mar. 26, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Class of Warrant or Right [Line Items] | ||||||
Fair value of warrants at beginning of period | $ 181,271 | $ 170,109 | $ 0 | $ 170,109 | ||
Change in fair value of warrant liability | $ 11,200 | (11,162) | (41,800) | 0 | (41,802) | $ (7,166) |
Fair value of warrants at redemption | (128,307) | |||||
Fair value of warrants at end of period | 170,109 | 170,109 | 0 | 0 | 170,109 | |
Transaction costs incurred in connection with issuance of warrants | 4,000 | 3,996 | ||||
Public Warrants | Fair Value, Inputs, Level 1 | ||||||
Class of Warrant or Right [Line Items] | ||||||
Fair value of warrants at beginning of period | 92,633 | 88,079 | 0 | 88,079 | ||
Change in fair value of warrant liability | (4,554) | (10,570) | ||||
Fair value of warrants at redemption | (77,509) | |||||
Fair value of warrants at end of period | 88,079 | 88,079 | 0 | 88,079 | ||
Private Warrants | Fair Value, Inputs, Level 3 | ||||||
Class of Warrant or Right [Line Items] | ||||||
Fair value of warrants at beginning of period | 88,638 | 82,030 | $ 0 | 82,030 | ||
Change in fair value of warrant liability | (6,608) | (31,232) | ||||
Fair value of warrants at redemption | (50,798) | |||||
Fair value of warrants at end of period | $ 82,030 | $ 82,030 | $ 50,800 | $ 0 | $ 82,030 |
Earnout Interests Liability - F
Earnout Interests Liability - Fair Value Measurement Inputs and Valuation Techniques (Details) $ in Thousands | Dec. 31, 2020 USD ($) $ / shares Y |
Earnout Interests Liability [Line items] | |
Earnout interests liability, fair value | $ | $ 351,048 |
Fair Value, Inputs, Level 3 | Volatility | |
Earnout Interests Liability [Line items] | |
Measurement input | 0.546 |
Fair Value, Inputs, Level 3 | Term (years) | |
Earnout Interests Liability [Line items] | |
Measurement input | Y | 2.99 |
Fair Value, Inputs, Level 3 | Risk-free interest rate | |
Earnout Interests Liability [Line items] | |
Measurement input | 0.0017 |
Fair Value, Inputs, Level 3 | Stock price | Minimum | |
Earnout Interests Liability [Line items] | |
Measurement input | 21.51 |
Fair Value, Inputs, Level 3 | Stock price | Maximum | |
Earnout Interests Liability [Line items] | |
Measurement input | 21.65 |
Earnout Interests Liability - N
Earnout Interests Liability - Narrative (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||
Mar. 26, 2021 | Jan. 13, 2021 | Dec. 31, 2020 | Dec. 29, 2020 | Mar. 26, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2021 | Dec. 31, 2020 | |
Earnout Interests Liability [Line items] | |||||||||
VWAP exceeded by company (in USD per share) | $ 14 | ||||||||
Number of trading days to calculate VWAPs | 10 days | ||||||||
Number of consecutive trading days to calculate VWAPs | 20 days | ||||||||
Shares issued during period (in shares) | 16,043,002 | ||||||||
Change in fair value of earnout interests liability | $ 2,338 | $ 0 | $ 0 | $ 13,740 | $ 2,300 | $ 2,338 | |||
Class A Common Stock | |||||||||
Earnout Interests Liability [Line items] | |||||||||
Shares issued during period (in shares) | 2,571,808 | 1,212,813 | 11,442,389 | ||||||
Class V Common Stock | |||||||||
Earnout Interests Liability [Line items] | |||||||||
Shares issued during period (in shares) | 15,000,000 |
Earnout Interests Liability - S
Earnout Interests Liability - Schedule Of Earnout Interests Liability, Activity (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||||
Dec. 31, 2020 | Mar. 26, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2021 | Dec. 31, 2020 | |
Earnout Interests Liability [Abstract] | ||||||
Earnout interests liability at beginning of period | $ 348,710 | $ 351,048 | $ 0 | $ 351,048 | ||
Change in fair value of earnout interests liability | 2,338 | $ 0 | $ 0 | 13,740 | $ 2,300 | $ 2,338 |
Settlement of earnout interests liability | (364,788) | |||||
Earnout interests liability at end of period | $ 351,048 | $ 0 | $ 0 | $ 351,048 |
Stockholders' Equity - Narrativ
Stockholders' Equity - Narrative (Details) | 12 Months Ended | ||||
Jun. 29, 2021 shares | Dec. 29, 2020 USD ($) vote shares | Dec. 31, 2022 USD ($) vote $ / shares shares | Dec. 31, 2021 USD ($) $ / shares shares | Dec. 31, 2020 USD ($) | |
Debt and Equity Securities, FV-NI [Line Items] | |||||
Capital contributed | $ | $ 6,500,000 | ||||
Amount distributed to the limited partners | $ | $ 5,200,000 | ||||
Capital stock authorized (in shares) | 951,000,000 | ||||
Preferred stock, par value (in USD per share) | $ / shares | $ 0.0001 | ||||
Common stock, shares outstanding (in shares) | 204,792,517 | ||||
Number of votes per share | vote | 1 | ||||
Owners Other Than Rush Street Interactive | RSILP | |||||
Debt and Equity Securities, FV-NI [Line Items] | |||||
Percentage of common units retained by sellers | 70.55% | 72.20% | 76.89% | ||
Special Limited Partner | |||||
Debt and Equity Securities, FV-NI [Line Items] | |||||
Transfer of stock, cash consideration | $ | $ 125,000,000 | ||||
Common A Units | |||||
Debt and Equity Securities, FV-NI [Line Items] | |||||
Conversion of shares (in shares) | 172,500,000 | ||||
Common A Units | Special Limited Partner | |||||
Debt and Equity Securities, FV-NI [Line Items] | |||||
Transfer of stock (in shares) | 12,500,000 | ||||
Preferred Stock | |||||
Debt and Equity Securities, FV-NI [Line Items] | |||||
Capital stock authorized (in shares) | 1,000,000 | ||||
Preferred stock outstanding (in shares) | 0 | 0 | |||
Class A Common Stock | |||||
Debt and Equity Securities, FV-NI [Line Items] | |||||
Conversion of shares (in shares) | 1 | 5,750,000 | 1 | ||
Capital stock authorized (in shares) | 750,000,000 | ||||
Common stock, shares outstanding (in shares) | 65,111,616 | 61,118,406 | |||
Treasury stock repurchased (in shares) | 218,589 | ||||
Average price of treasury stock repurchased (in USD per share) | $ / shares | $ 15.85 | ||||
Total cost of treasury stock repurchased | $ | $ 3,500,000 | ||||
Class V Common Stock | |||||
Debt and Equity Securities, FV-NI [Line Items] | |||||
Conversion of shares (in shares) | 1 | ||||
Capital stock authorized (in shares) | 200,000,000 | ||||
Common stock, shares outstanding (in shares) | 155,955,584 | 158,702,329 | |||
Number of votes per share | vote | 1 | ||||
Consideration for cancelled shares | $ | $ 0 |
Stockholders' Equity - Schedule
Stockholders' Equity - Schedule of Noncontrolling Interests (Details) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Noncontrolling Interest [Roll Forward] | ||
Issuance of Class A Common Stock as purchase consideration | (0.0006) | |
RSILP | Owners Other Than Rush Street Interactive | ||
Noncontrolling Interest [Roll Forward] | ||
Non-controlling interest percentage at beginning of period | 72.20% | 76.89% |
Issuance of Class A Common Stock upon the conversion of RSILP Unit Exchanges | (1.46%) | 1.24% |
Issuance of Class A Common Stock as purchase consideration | (0.02%) | (4.98%) |
Issuance of Class A Common Stock in connection with the vesting of certain share-based equity grants | 0.06% | (0.59%) |
Issuance of Class A Common Stock in connection with the vesting of certain share-based equity grants | (0.23%) | 0.08% |
Noncontrolling ownership interest at ending of period | 70.55% | |
Non-controlling interest percentage at end of period | 70.55% | 72.20% |
RSILP | Owners Other Than Rush Street Interactive | Class A Common Stock | ||
Noncontrolling Interest [Roll Forward] | ||
Issuance of class A common stock in connection with the vesting of certain share-based equity grants | (0.0038) |
Share-Based Compensation - Narr
Share-Based Compensation - Narrative (Details) - USD ($) | 12 Months Ended | |||
Dec. 29, 2020 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Share-Based Compensation | ||||
Number of shares available for grant (in shares) | 2,500,000 | |||
Number of awards granted (in shares) | 790,339 | 130,565 | ||
Weighted average grant price of options granted (in USD per share) | $ 4.07 | $ 15.40 | ||
Aggregate fair value of options granted | $ 1,000,000 | $ 1,800,000 | ||
Intrinsic value of options outstanding | $ 0 | |||
Dividend yield | 0% | |||
RSUs | ||||
Share-Based Compensation | ||||
Number of units granted (in shares) | 5,542,010 | 4,621,440 | ||
Aggregate fair value of units granted | $ 74,100,000 | $ 23,100,000 | ||
Weighted average grant date fair value of units vested | 15,000,000 | $ 23,100,000 | ||
Unrecognized stock-based compensation expense | $ 50,800,000 | |||
Weighted-average vesting period of unrecognized stock-based compensation expense | 1 year 2 months 12 days | |||
Fair value per share (in USD per share) | $ 3.95 | $ 15.40 | ||
Dividend yield | 0% | 0% | ||
Restricted Stock Units, Service Conditions | ||||
Share-Based Compensation | ||||
Number of units granted (in shares) | 3,900,000 | 4,400,000 | ||
Restricted Stock Units, Service Conditions | Minimum | ||||
Share-Based Compensation | ||||
Vesting period | 3 years | |||
Restricted Stock Units, Service Conditions | Maximum | ||||
Share-Based Compensation | ||||
Vesting period | 4 years | |||
Restricted Stock Units, Market Conditions | ||||
Share-Based Compensation | ||||
Number of units granted (in shares) | 1,600,000 | 200,000 | ||
Vesting period | 3 years | 3 years | ||
Stock options | ||||
Share-Based Compensation | ||||
Number of awards granted (in shares) | 800,000 | 100,000 | ||
Weighted average grant price of options granted (in USD per share) | $ 2.26 | $ 7.41 | ||
Unrecognized stock-based compensation expense | $ 1,900,000 | |||
Weighted-average vesting period of unrecognized stock-based compensation expense | 1 year 3 months 18 days | |||
Fair value per share (in USD per share) | $ 15.40 | $ 4.07 | ||
Dividend yield | 0% | 0% | ||
Class A Common Stock | ||||
Share-Based Compensation | ||||
Aggregate number of shares reserved under the plan (in shares) | 13,400,000 | |||
Common A-2 Units | ||||
Share-Based Compensation | ||||
Partners' capital account, unit-based payment arrangement, number of units | 0 | 414,894 | ||
Participation threshold | $ 0 | |||
Common B-1 Units | ||||
Share-Based Compensation | ||||
Number of units granted (in shares) | 683,889 | |||
Partners' capital account, unit-based payment arrangement, number of units | 0 | 683,889 | ||
Fair value per share (in USD per share) | $ 29.15 | |||
Common A-2 And B-1 Units | ||||
Share-Based Compensation | ||||
Dividend yield | 0% |
Share-Based Compensation - Valu
Share-Based Compensation - Valuation Assumptions (Details) - $ / shares | 12 Months Ended | ||
Dec. 29, 2020 | Dec. 31, 2022 | Dec. 31, 2021 | |
Share-Based Compensation | |||
Dividend yield | 0% | ||
Common A-2 And B-1 Units | |||
Share-Based Compensation | |||
Volatility rate | 45% | ||
Risk-free interest rate | 0.12% | ||
Average expected life (in years) | 0 years | ||
Dividend yield | 0% | ||
Lack of marketability discount | 0% | ||
RSUs | |||
Share-Based Compensation | |||
Volatility rate | 56.08% | ||
Risk-free interest rate | 0.39% | ||
Average expected life (in years) | 3 years | ||
Dividend yield | 0% | 0% | |
Stock price at grant date (in USD per share) | $ 3.95 | $ 15.40 | |
RSUs | Minimum | |||
Share-Based Compensation | |||
Volatility rate | 70.93% | ||
Risk-free interest rate | 4.32% | ||
Average expected life (in years) | 2 years 3 months 18 days | ||
RSUs | Maximum | |||
Share-Based Compensation | |||
Volatility rate | 71% | ||
Risk-free interest rate | 4.39% | ||
Average expected life (in years) | 3 years | ||
Stock options | |||
Share-Based Compensation | |||
Volatility rate | 53.52% | 58.98% | |
Risk-free interest rate | 1.66% | 3.68% | |
Average expected life (in years) | 5 years 7 months 6 days | 5 years 4 months 24 days | |
Dividend yield | 0% | 0% | |
Stock price at grant date (in USD per share) | $ 15.40 | $ 4.07 | |
Exercise price (in USD per share) | $ 15.40 | $ 4.07 |
Share-Based Compensation - RSU
Share-Based Compensation - RSU and Stock Option Activity (Details) - $ / shares | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Number of Units | ||
Unvested options outstanding at beginning of period (in shares) | 96,827 | 0 |
Number of awards granted (in shares) | 790,339 | 130,565 |
Options vested (in shares) | (32,278) | 0 |
Options forfeited (in shares) | 0 | (33,738) |
Unvested options outstanding at end of period (in shares) | 854,888 | 96,827 |
Weighted average exercise price | ||
Weighted average grant price of options outstanding at beginning of period (in USD per share) | $ 15.40 | $ 0 |
Weighted average grant price of options granted (in USD per share) | 4.07 | 15.40 |
Weighted average grant price of options vested (in USD per share) | 15.40 | 0 |
Weighted average grant price of options forfeited (in USD per share) | 0 | 15.40 |
Weighted average grant price of options outstanding at end of period (in USD per share) | $ 4.93 | $ 15.40 |
RSUs | ||
Number of Units | ||
Unvested balance at beginning of period (in shares) | 3,076,158 | 0 |
Number of units granted (in shares) | 5,542,010 | 4,621,440 |
Vested (in shares) | (1,020,874) | (1,457,613) |
Units forfeited (in shares) | (104,681) | (87,669) |
Unvested balance at end of period (in shares) | 7,492,613 | 3,076,158 |
Weighted average grant price | ||
Weighted average grant price of unvested units outstanding at beginning of period (in USD per shares) | $ 16.08 | $ 0 |
Weighted average grant price of units granted (in USD per shares) | 4.17 | 16.04 |
Weighted average grant price of units vested (in USD per shares) | 14.67 | 15.84 |
Weighted average grant price of units forfeited (in USD per shares) | 14.36 | 17.89 |
Weighted average grant price of unvested units outstanding at end of period (in USD per shares) | $ 7.48 | $ 16.08 |
Stock options | ||
Number of Units | ||
Number of awards granted (in shares) | 800,000 | 100,000 |
Weighted average exercise price | ||
Weighted average grant price of options granted (in USD per share) | $ 2.26 | $ 7.41 |
Share-Based Compensation - Shar
Share-Based Compensation - Share-based Payment Arrangement, Activity (Details) - Common B-1 Units | 12 Months Ended |
Dec. 31, 2020 shares | |
Share-Based Compensation | |
Unvested balance at beginning of period (in shares) | 522,086 |
Granted (in shares) | 683,889 |
Vested (in shares) | (1,205,975) |
Unvested balance at end of period (in shares) | 0 |
Share-Based Compensation - Sh_2
Share-Based Compensation - Share-based Compensation Expense (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | |||
Total share-based compensation expense | $ 18,691 | $ 24,912 | $ 144,733 |
Costs of revenue | |||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | |||
Total share-based compensation expense | 987 | 1,808 | 0 |
Advertising and promotions | |||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | |||
Total share-based compensation expense | 2,048 | 3,605 | 0 |
General administration and other | |||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | |||
Total share-based compensation expense | $ 15,656 | $ 19,499 | $ 144,733 |
Income Taxes - Narrative (Detai
Income Taxes - Narrative (Details) - USD ($) $ in Millions | Dec. 29, 2020 | Dec. 31, 2022 | Dec. 31, 2021 |
Income Tax [Line Items] | |||
Unrecognized tax receivable liability | $ 58.7 | $ 46.2 | |
Special Limited Partner | |||
Income Tax [Line Items] | |||
Tax receivable agreement, percentage of net certain tax benefits payable | 85% | ||
Domestic Tax Authority | |||
Income Tax [Line Items] | |||
Net operating loss carryovers | 73.3 | 32.6 | |
State and Local Jurisdiction | |||
Income Tax [Line Items] | |||
Net operating loss carryovers | 69.4 | $ 30.2 | |
Foreign Tax Authority | |||
Income Tax [Line Items] | |||
Net operating loss carryovers | $ 30.9 |
Income Taxes - Schedule of Comp
Income Taxes - Schedule of Components of Income Tax Expense (Benefit) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Current income taxes: | |||
Federal | $ (118) | $ 149 | $ 0 |
State and local | (34) | 25 | 0 |
Foreign | 9,137 | 4,551 | 2,708 |
Total current income taxes | 8,985 | 4,725 | 2,708 |
Deferred income taxes: | |||
Federal | 0 | 0 | 0 |
State and local | 0 | 0 | 0 |
Foreign | (24) | (37) | 211 |
Deferred income tax | (24) | (37) | 211 |
Income tax expense | $ 8,961 | $ 4,688 | $ 2,919 |
Income Taxes - Schedule of Effe
Income Taxes - Schedule of Effective Income Tax Rate Reconciliation (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Effective Income Tax Rate Reconciliation, Amount [Abstract] | |||
Net loss before income taxes | $ (125,371) | $ (66,404) | $ (128,726) |
Less: net loss before Reverse Recapitalization | 0 | 0 | (133,404) |
Less: net income (loss) before income taxes attributable to non-controlling interest | (89,224) | (48,258) | 3,597 |
Net loss attributable to Rush Street Interactive Inc. before income taxes | (36,147) | (18,146) | 1,081 |
Income tax expense (benefit) at the federal statutory rate | (7,591) | (3,811) | 227 |
State income taxes, net of federal benefit | (34) | 25 | 100 |
Other | (552) | (67) | 0 |
Foreign operations | 9,113 | 4,514 | 2,919 |
Change in valuation allowance | 8,025 | 4,027 | (327) |
Income tax expense | $ 8,961 | $ 4,688 | $ 2,919 |
Income Taxes - Schedule of Defe
Income Taxes - Schedule of Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Deferred tax assets: | ||
Investment in subsidiaries | $ 134,586 | $ 126,393 |
Net operating losses | 26,394 | 9,065 |
Imputed interest | 1,638 | 1,147 |
Share-based compensation | 366 | 610 |
Other assets | 165 | 99 |
Total gross deferred tax assets | 163,149 | 137,314 |
Valuation allowance | (163,029) | (137,214) |
Total deferred tax assets, net of valuation allowance | 120 | 100 |
Deferred tax liabilities: | ||
Investment in subsidiaries | 0 | 0 |
Total gross deferred tax liabilities | 0 | 0 |
Net deferred tax assets | $ 120 | $ 100 |
Earnings (Loss) Per Share - Sch
Earnings (Loss) Per Share - Schedule of Basic and Diluted Earnings (Loss) per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Numerator: | |||
Net loss | $ (134,332) | $ (71,092) | $ (131,645) |
Less: Net loss attributable to RSILP prior to the Business Combination | 0 | 0 | (136,323) |
Less: Net income (loss) attributable to non-controlling interests after the Business Combination | (95,701) | (51,603) | 3,597 |
Net income (loss) attributable to Rush Street Interactive, Inc. – basic | (38,631) | (19,489) | 1,081 |
Effect of dilutive securities: | |||
Public, Private Placement and Working Capital Warrants, net of amounts attributable to non-controlling interests | 0 | (9,569) | (1,656) |
Net loss attributable to Rush Street Interactive, Inc. – diluted | $ (38,631) | $ (29,058) | $ (575) |
Denominator | |||
Weighted average common shares outstanding - basic (in shares) | 63,532,906 | 56,265,541 | 43,579,704 |
Weighted average effect of dilutive securities: | |||
Public Warrants (in shares) | 0 | 677,746 | 5,481,341 |
Private Placement and Working Capital Warrants (in shares) | 0 | 483,598 | 3,181,561 |
Weighted average common shares outstanding - diluted (in shares) | 63,532,906 | 57,426,885 | 52,242,606 |
Net earnings (loss) per Class A Common Share - basic (in USD per share) | $ (0.61) | $ (0.35) | $ 0.02 |
Net loss per Class A Common Share - dilluted (in USD per share) | $ (0.61) | $ (0.51) | $ (0.01) |
Earnings (Loss) Per Share - S_2
Earnings (Loss) Per Share - Schedule of Anti-dilutive Securities (Details) - shares | 12 Months Ended | |||
Dec. 29, 2020 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
RSILP Units | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Anti-dilutive securities excluded from computation of diluted shares outstanding (in shares) | 15,000,000 | 155,955,584 | 158,702,329 | 160,000,000 |
Earnout Interests - Class A Common Stock | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Anti-dilutive securities excluded from computation of diluted shares outstanding (in shares) | 0 | 0 | 1,212,813 | |
Unvested Restricted Stock Units | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Anti-dilutive securities excluded from computation of diluted shares outstanding (in shares) | 7,492,613 | 3,076,158 | 0 | |
Unvested Stock Options | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Anti-dilutive securities excluded from computation of diluted shares outstanding (in shares) | 854,888 | 96,827 | 0 |
Related Parties (Details)
Related Parties (Details) - USD ($) $ in Millions | 12 Months Ended | ||||||
Jun. 10, 2022 | Jun. 29, 2021 | Dec. 29, 2020 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 28, 2020 | |
Rush Street Productions, LLC | |||||||
Related Party Transaction [Line Items] | |||||||
Asset acquisition, capitalized amount | $ 4.2 | $ 4.7 | |||||
RSG | Service Agreements | |||||||
Related Party Transaction [Line Items] | |||||||
Expenses relating to related party | 0.4 | $ 1.1 | $ 1.3 | ||||
Payables due to related party | 0.1 | 0.1 | |||||
Affiliated Land-Based Casinos | Royalty Agreements | |||||||
Related Party Transaction [Line Items] | |||||||
Royalties fees | 39.8 | 41.6 | $ 24.5 | ||||
Receivables due form related party | $ 35.9 | $ 28.2 | |||||
Class V Common Stock | |||||||
Related Party Transaction [Line Items] | |||||||
Shares issued upon conversion | 1 | ||||||
Class A Common Stock | |||||||
Related Party Transaction [Line Items] | |||||||
Shares issued upon conversion | 1 | 5,750,000 | 1 | ||||
Sellers' Representative | RSILP Units | |||||||
Related Party Transaction [Line Items] | |||||||
Minimum number of units available to be exchanged | 1,000 | ||||||
RSG | Service Agreements | The Company | |||||||
Related Party Transaction [Line Items] | |||||||
Term of the agreement | 2 years | ||||||
RSILP | Bluhm and Trust | |||||||
Related Party Transaction [Line Items] | |||||||
Noncontrolling ownership interest | 73% | ||||||
RSILP | Carlin and Trust | |||||||
Related Party Transaction [Line Items] | |||||||
Noncontrolling ownership interest | 20% | ||||||
RSILP | Sellers' Representative | |||||||
Related Party Transaction [Line Items] | |||||||
Noncontrolling ownership interest | 1% |
Leases - Lease, Cost (Details)
Leases - Lease, Cost (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Leases [Abstract] | |||
Operating lease cost | $ 676 | $ 268 | $ 252 |
Variable lease cost | 275 | 528 | 132 |
Short-term lease cost | 436 | 179 | 0 |
Total lease expenses | $ 1,387 | $ 975 | $ 384 |
Leases - Other Information (Det
Leases - Other Information (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Leases [Abstract] | |||
Operating cash flows from operating leases | $ 653 | $ 355 | $ 253 |
Right-of-use assets obtained in exchange for new or modified operating lease liabilities | 965 | 810 | 1,305 |
Right-of-use assets obtained in exchange for new or modified finance lease liabilities | $ 1,124 | $ 2,547 | $ 0 |
Weighted-average remaining lease term (in years) – operating leases | 3 years 1 month 6 days | 3 years 2 months 12 days | 2 years 7 months 6 days |
Weighted-average remaining lease term (in years) – finance leases | 3 years | 4 years 7 months 6 days | |
Weighted-average discount rate – operating leases | 6.20% | 6% | 6% |
Weighted-average discount rate – finance leases | 6% | 6% |
Leases - Operating Lease, Liabi
Leases - Operating Lease, Liability, Maturity (Details) $ in Thousands | Dec. 31, 2022 USD ($) |
Leases [Abstract] | |
2023 | $ 808 |
2024 | 591 |
2025 | 378 |
2026 | 198 |
2027 | 99 |
Total undiscounted future cash flows | 2,074 |
Less: present value discount | (175) |
Operating lease liabilities | $ 1,899 |
Leases - Finance Lease, Liabili
Leases - Finance Lease, Liability, Maturity (Details) $ in Thousands | Dec. 31, 2022 USD ($) |
Leases [Abstract] | |
2023 | $ 114 |
2024 | 114 |
2025 | 114 |
2026 | 0 |
2027 | 0 |
Total undiscounted future cash flows | 342 |
Less: present value discount | (29) |
Finance lease liabilities | $ 313 |
Finance Lease, Liability, Statement of Financial Position [Extensible Enumeration] | Other current liabilities |
Finance Lease, Liability, Noncurrent, Statement of Financial Position [Extensible Enumeration] | Other long-term liabilities |
Commitments and Contingencies_2
Commitments and Contingencies (Details) - USD ($) $ in Thousands | Sep. 15, 2020 | Dec. 31, 2022 |
Contractual Obligation, Fiscal Year Maturity [Abstract] | ||
2023 | $ 30,624 | |
2024 | 14,501 | |
2025 | 11,218 | |
2026 | 4,788 | |
2027 | 5,032 | |
Thereafter | 29,789 | |
Total | 95,952 | |
Non-cancelable Lease Contract | ||
Contractual Obligation, Fiscal Year Maturity [Abstract] | ||
Operating and finance lease obligations | 2,600 | |
Non-cancelable Lease Contract with Marketing Vendors | ||
Contractual Obligation, Fiscal Year Maturity [Abstract] | ||
Operating and finance lease obligations | 34,500 | |
License and Market Access Commitments | ||
Contractual Obligation, Fiscal Year Maturity [Abstract] | ||
Operating and finance lease obligations | $ 58,800 | |
Todd L. Anderson vs Rush Street Gaming, LLC and Rush Street Interactive, LLC | Pending Litigation | ||
Loss Contingencies [Line Items] | ||
Alleged equity stake offered associated with legal proceeding | 1% |