RSI - Earnings call transcript Q3 2021 | Rush Street Interactive, Inc.

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Operator

Good day, ladies and gentlemen. Thank you for standing by. Welcome to the RSI Third Quarter 2021 Earnings Conference Call. [Operator Instructions] Please note that this conference call is being recorded today, November 10, 2021. I will now turn the call over to Lauren Seiler, Associate Vice President of Investor Relations and Development.

Lauren Seiler

good and operator you, afternoon. Thank should By quarter to third access earnings now release. everyone XXXX our have It found website the Investor can results section quarterly be of under the the RSI at financial rushstreetinteractive.com. heading in

of comments will looking the laws. Some of the be securities our federal statements forward- within meaning

could cause by expect, statements. subject no Forward-looking statements could should you we and and materially uncertainties similar and results expect. are for identified or refer numerous differ filings the of We of assume impact risks responsibility conditions. them. words financial that detailed upon that and are exercise updating you historical interpreting other results are our use facts such to any in future from and more not forward-looking our usually SEC of statements for to Therefore, operating the actual as caution to We will, should discussion relying phrases, what risks

we discuss and should During be these is not available call today earnings will measures results we of the as directly the in evaluating call, be GAAP These with the CFO, With on useful a we the measures our considered our accordance the our A Sauers. isolation GAAP. believe company's performance. www.ruststreetinteractive.com. prepared our financial me for Schwartz; comparable Kyle in to which measures RSI reconciliation or can third the have operating substitute which in quarter of most CEO, non-GAAP XXXX is section in measure release, investors on available website Richard at our

to to questions. remarks and the opening open With call provide call turn first the will some We that, I'll Richard. over then

Richard Schwartz

I'd have cover for call. I like everyone. joining afternoon, Thanks several Good Lauren. to Thanks, today. the topics

quarter guidance. a of our year the full revenue revenue of record highlight and raising another First,

the RSI. This sequential ninth growth row of a quarter revenue represents in quarter for

and $XXX Market Then, Access finally, our growth, to handing marketing grow over team some talk our about delivered update an exciting year-over-year technology product before operational differentiated revenue and opportunities. investing details remarks. line Revenue continued again, million into previous midpoint user growth estimated another between the some online be included provide a range. to raising in XX% at additional will our $XXX growth growth up prior midpoint. This is year-over-year our our growth and we year-over-year was in revenue and that market Initiative drive ability our representing continued this which demonstrating I'll developments all guidance. sequential growth full once meaningful are experience a deeper expect for business, our areas solid XX% top increase revenue rollout on market. of walkthrough helping drive of our well in to online Next, growth of $XXX guidance new as financials. of I'll and excellence. during line while value. the of XXXX Kyle give Kyle sports on are and top million recent it in as revenue year of revenue success now that quarter, the the to dive implying expect quarter million our casino from his the technology With the marketing we And long-term We strategically again and XX% will our Once

of to address week. you first I'm getting saw want the to I news earlier launch, recent many Before this sure

New occurred new success online to record only on York. our exclusive Lottery. quarter discuss. sportsbook isn't and York award to schedule and have on of sportsbook overseeing the operate players October PlaySugarHouse winning soft on selected delighted as the to award New online sports our a strong we've in market the since been full the in bring operations in we York. But Connecticut launch the winning then, betting of Connecticut track to announced been of end, launch We platform the Connecticut of And exciting product of the the York, XX. New The RSI has are XX, BetRivers New thrilled state to October to sports in in Subsequent Connecticut. partner

are We wagering most launched New ago, in sportsbook we Britain. locations four have of Stamford, Connecticut Haven, in of all and retail and opened the subsequently a we yesterday, recently, sportsbooks state in which all Windsor, weeks New know two

over opened expect six the coming locations another We to be weeks.

were in quarter, gaming their October. of have BetRivers now five in a announced partnership we sports casino, betting retail online have jurisdictions, during Rattlers Arizona. We Arizona XX with online also partners betting that and operate six eager we with third the sports XX online that of betting. as launch state During to money BetRivers, And which sports in real

is the We through of the entered casino in of CASINOXFUN available all social on also announced Canadian that the we've province with The the market BetRivers sportsbook platform gaming launch free devices to now online our play platform. and Ontario.

real-money We've have we before. social and like pre As Michigan, had players success in launch great betters. into converting markets with Pennsylvania shared

more XX% have made account real-money pre deposit. In and Michigan, our a in first of than opened fact, players launch social

We are the we Ontario similar hoping launch for months. real-money online in and as coming casino results sports to expect in betting

jurisdiction. online the size in in for casino the to offer the We ability about talk can sports shift are opportunity of really both enthusiastic Ontario, market and market, the and I and access. now about given the us

make also over strong have new the While launching in initiative. year, past market several continued in our progress we to significant states strides new access made we have

the up will York states state XX% population anticipated to upcoming increase representing by sports population. are our New players our The the live of into X% sportsbook addressable XX%. casino of of Maryland representing by population population launches online will in online Louisiana, with US and and of and over casino our We Ontario XX%. And now live online with and entry increase XX%

future access business working in team market. to is Our development secure

trends sports XX online a now and ourselves a from in I we access in markets. put strong is exciting have betting position XX market and to are with want some to excited are seeing. highlights specific strong to Connecticut markets already the off start. casino turn to We online quarter plan

we've it's solid early, progress really While thus still seen far.

time forward to last and our offer and iOS A entered testament West an I'm of we to market market high is app we first to terms data us weeks market. seven with back And in are sports have online our market quality player's approaching for launching but is shares ability since we and with Illinois, looking continue came in out our soon great for be online users' in the to this April. we've continued that improve held retain online revenue players. our app our we the very further another the showed largest last In share satisfaction. only largest the to where share our user steady Connecticut able the share. of close to the casino will handle, to provide experience Virginia, casino grow In In we months. players, and Michigan, market iOS two improve September we already third experience. exciting week players now This will Over friction remove XX% share well. earlier expect hold

XXX% handle we again because XX% greater close first months, into year-over-year. we sports. online years during revenue are achievement, of several in that Colombia grew our significantly a recent open. share market This than And tremendous to market after combined for casino Lastly, is its entry online and

disciplined time for will As I the calculated generate and us and will which earlier, markets investment our new mode way remain in ultimately there discussed in mature. of the from invest are markets they to of we we substantial be being. profitability put plenty proud quarters, as to in overcoming ability invest But

great of marketing we switch initiatives, have. recently broadcasting Schlereth. investments analyst Bowl Now, Mark about James Blake talk brand and respected TV and start, to tennis ambassadors signed some to I champion two would To and and results our and and three-times like BetRivers new NFL veteran, Super we to gears the are

and via upcoming enjoy. our a use sports launched exciting content into our Stay college XX Field The and by create These proud players local football the talking several to other to podcasts and local join and new New also commitment Field many and by players excited have of happy talent, we the effective as Network. country cities on for with insights college more to expanded teams betrivers.com know in shows of college an Media cities in betting including to York sports. XX engage Chicago, Detroit, across recently CityCasts for is are partnership betting local major hosted because to many local Denver. hyper about city We're ambassadors hometown players and in to enhance betting we way football for and our that exclusive the This and programming, signing tuned betters we've launches future. teams. Pittsburgh, We announced basketball stars We've offer The to loyalty their former unique refer of Philadelphia,

times see product for the efficiency of and critical to jurisdiction, customers Real-time of is marketing, and to Intelligence including of months customers. six variety three through a since return spend factors Our the Business performance using continue respectively. year all This and insights us one market investment cohorts optimize ability behaviors to diversified year retain our continuously still driven on marketing of of to marketing our and learnings -- predicted model average based on a an results. of great We our our considers have acquire, analytics payback in offered channels, we to price lifetime remain dynamic the X.Xx data success. effectively organization various the Team values, across offerings model. period reengage We convert, focus from and a allow inception,

our to this into lows, believe during our top further line marketing we XX% demonstrating near year convert industry Our revenue, revenue. was course marketing the ability of spend which to investment be of dollars

marketing we have our slightly, results, have strong prudently an the accelerated so with extended on eye only profitability. periods Given payback do and long-term investments

to dedicated as for We own at continue launched gaming PlaySugarHouse technology; as development New to Pennsylvania, focus and casino studios popular concurrently BetRivers on our product for been online a usual, fee and at and virtual to tables. to experience. them best-in-class Jersey, provide it quarter in which exclusively the find players tables for branded we and turning here easier blackjack faster for Now make busy user and live RSI product very perspective providing technology recently it's

and other focus on responsiveness apart to from set casino continue community platforms. interaction customer RSI Our

first proprietary slot that players tournament also engaged our powered customers. to are RushRace, excited and to launched engine innovative ahead have multiplayer the experiences RushArena, and a tournament continue differentiated allow We platform. will product casino our excited RushRace us our to on our recently a to keep of industry multiplayer stay exciting offer is of many for to by play

earlier launched we have year. We feature this interest great same also in the seen game-parlays

on NFL game-parlay In our fact, wager. made a it differentiation have retention with players our we from even have comes odds When gives This payouts. players. significant our or of competitors. same players able multiple to differentiation peers, outcome, over more and bigger XX% create most that it of ways combine game-parlays functionality, with same even another a this betters that and and Unlike creates our different of our longer sport. another same point product Most our combine game-parlay and a game offers game-parlay bet year are to to same loyalty

is from proud to number as our and app. This app for be Krejcik improvement continue experience X BetRivers improve to Eilers our recognized out user We very ranked brands functionality -- are independent new & a source by of to we of respected now for tested. a XX is strong adopt also

the significantly always, when and As we they sportsbook users new with markets in to close our the our upgraded to features customer reception casino pay and from app winning award attention service. conjunction in first experience time platform new

to quarter. increasingly remain we We and our app, in that of out app the during sportsbook fourth built casino also track market begin to we are iPlus leading integrated roll sportsbook confident have on

As our iOS has those Michigan app previously an and been markets. tremendous shared, all Virginia in achieved success without recently West and in Pennsylvania

the of Year the iOS our to by eager take really being of Street for to America, Year benefit as it peers. well also boys recognition through want Operator Rush congratulate as player Awards as are a see being launch for the Social We app of I enhanced prestigious in North we casino by Interactive short listed and Operator online gaming the moment those all markets. the the Casino to nominated a SBC engagement

of are very to industry have Sportsbook further industry experts These call the the of We the are experience. the pleased of over and I'll of leading Awards just that, turn also entire a With by voted SBC Year XXXX player by to to the awards, as efforts a the testament a Latinoamerica weeks won Kyle. team couple ago. RSI our recognition

Kyle Sauers

Thanks Richard.

work dive is North And doubted having short to very shaping well now today to from over I more very to Richard taken the special and company been data. into for one America hard to of Congrats into when and has whether the there's the a Before force in financial during vision listed congrats as organization to some online be of that failed Leader nomination a that ever on the is in prestigious numbers, RSI recognition Richard. mention his you many the as SBC would Awards him. fruition years gaming, it RSI time And the US. Year

and for of year-over-year. third million, approach million. third during that advertising Adjusted an in $XXX.X to quarter loss of reflects ensuring good As The $XX.X during second of $XX.X of year marketing quarter XXXX. mentioned, $XX.X our returns, strong accelerating expense marketing take put our to was million to million XXXX Richard prior advantage was the our the use. This quarter, EBITDA was the to quarter and investments rational the million $XX.X 'XX spend compared to third also increase but adjusted commitment revenue XX% promotions quarter

spend. in expect further players. opportunity social in offered The And more markets, in season Connecticut, and quarter. into launch the meaningfully year. Depending attract the Ontario beginning quarter have to We in Arizona recent is launches investments investments time opportunities in other fourth fourth have to the our marketing increase also created could to new heavier accelerate we next of or an further on Football

Ontario, on the about and week. think in we York earlier As New markets news based this Louisiana, exciting Real-money like Maryland.

million the quarter Our the $X.X in adjusted second third $X to million G&A from quarter, the grew moving modestly up to second from quarter.

corporate coming years. item the to line we're support teams experiencing grow our to growth to substantial We in over continue infrastructure as out coming this expect development continue expect and build the we the quarters to continuing and to

our share in during first our of warrants reminder, of the which remove adjusted based quarter. redeemed earnout of effects $X.X value a liability share loosely quarter, and the which fair of all for or compensation, the year-to-date As expired change was change compensation, based interest million were results outstanding effects EBITDA the during fair quarter were in while the value the

position with potential million launch growing balance We continue investment sheet regards restricted a allows new on to external our in acquisitions, be with and under in evaluate This quickly, great to debt. $XXX no and remain cash us opportunities. continue opportunistic bolt-on investments, our market to marketing

year-over-year expecting trends the that about revenue results the top increase earlier, a The year. seeing is from for later reminder, million. were or XX% implies XXXX. launching only the range line year-over-year early been open confidence we full are next $XXX of revised from And But strong strong increasing previous this As with reflects are our and questions. $XXX to between new far range seeing markets continued contributions our we've that across This that We're as guidance call. of on are for from as year guidance growth. We've up talked million lines that markets XX% business. operator, our $XXX growth likely today. to live prior the our the please during so And in our up Richard this million XXXX be we highlighted of year $XXX million, revenue includes

Operator

Macquarie. of a Chad [Operator Instructions] Beynon first question The line with is from

ChadBeynon

can you've my good so seen quarter given taking terms of respect we've the given irrational towards on your to guys. some comments market? maintain in from from that this that far October seeing given peers? is you're something promos, heard guidance bit competition, question. and a a gaming what thanks in you elaborate With Hi, the And your of some to that we're Thanks, approach promos little in fourth Congrats disciplines the potential afternoon, quarter. for able the

KyleSauers

just the the and we just fourth about thought And out a and the Richard guidance I'll environment talk then bit competitive on approach maybe how start promos we and that. I'll in the about way little Maybe let quarter.

the So as set part online the a bigger of revenue. is about, we're of meet or the that different our than range. casino by pleased looks is raised since a handling on pretty the at demonstrating sports each them variability lot of last little higher on expectations which and consistency the guidance obviously midpoint, we of talked side, to side, the year. considerations is bit we calendar $XX time, ability million beat And go our into a a More different little the sports volume business,

excited little happening tough excited few We the any some in October better promotions, quarter first market that last and new Probably an happen got you football from about, Arizona and obviously start you've lined what two Connecticut We've weeks. there's fourth that a generated. of over are about in others, really had revenue very gotten all as early real with the are and for unlike and launches we're state a heard the weeks. launches to sports not couple up in here. before low It's to starts know, the be investment

to But either fourth all the here sequential a factor have quarter on revenue So expect XXth that, quarter. consecutive to fourth in direction in the again significant obviously having that probably our quarter. growth said of excited we're

RichardSchwartz

Hi, Chad.

of terms In the --

ChadBeynon

I'm I sorry, interrupted. Yes, ahead, Richard. go

RichardSchwartz

span competitive of that. The just into just aggressiveness. and very referencing remains about markets entrants as just new market; the on the their I existing was competitive come the market the I competitors would nature comment half second I increase and thought

well years matter. experience developing And and of in invested that the all elements to an for so perform that we we continue

are just a your can't acquisition that you when and operations, comes overnight, build years to players, takes those of So create months retention, development your things expertise couple of your it to out. or of

efficient, a the made And that continuing So focused have on seeing operate in we're because we're despite available compete. with we're investment is we marketing. we still a are way flexible that to think we're of to for very us And We results I comfortable in results. very environment. that long-term operate the we've believe rational the And the competition, think we're prepared past. great we seeing

ChadBeynon

for that business? Do Great, thank to up terms of you. to of app mobile use kind guess customers snacking And use you expecting and about after blocks trying maybe Are the stop launches. iOS desktop incremental the some kind that to think then for building of current follow more your in my is will 'XX mainly then sessions, longer ARPMAU just believe and be the you. you the just launches, thank for of this both I

RichardSchwartz

know upside that app seamless having clear the but with way. thing is play king we us markets their very is not first on and to to in mobile helping only a and Sure, us know they setup we The rated current able iOS you, are the markets. players casino is our in sportsbook that provide devices, going really have and is

And be to have messaging the sports, for offers. it you reducing have when or integrated directly in want And markets, experience, so on communicate instead geolocation to update promotional going very have be a things players their a better or with to have able by where accessible, it and phone to you do of app and the like deliver and easily bonus whenever the friction getting enter an on today your into quick from betting experience. we to ID very face able available those the much app user play, we're them you're

that going get have benefits iOS brings of of. one friction to is will is experience I bring. limited thing tell of that our part eager some that only number So apps you the we're as in lots But the we to it's an user that market markets, very rid

Operator

the question with David comes next of The from Katz Jefferies. line

DavidKatz

scale taking tax you're to minute love financially a for view rate I questions. New size would I my Thanks the discuss in the but admit strategically? was York how opportunity. I everyone. and market, afternoon, involved. the will the thinking or good just late, And that the Obviously of about and two Hi,

KyleSauers

given rate. profits will he so yes, the where in on New Yes, in less seems term. aggressive an do play it promotions, wants like I'll that. markets proven and Richard lower I competitors our think operator. prefer start our ability to side. with our just and New it's add And with of very both maybe financial to keeping market if again, efficient low, as will York. certainly over tax a mean, confident But we've that making bonuses the York, efficient we're we'd But be We and marketing likely use certainly and a promotions, can time definitely longer anything, I success well generate to strengths And think

DavidKatz

can Illinois, I if year, on registration person as follow canceling in and is next it. up the just I right, Okay, understand

just could updated couple would that us be of you a give helpful. in maneuver If thoughts well, you as context, that how about

RichardSchwartz

Sure. we We've largely But consistent. seen out the we forth times shares a the registration what we've came back out months. in out, now. came that been our just announcements highest and in is And fact, number the were market seven stay in revenues yesterday, seen -- the person few have and go

now even because you've been been growth enhancements the see most and to that is of influx able new So able of what market especially operates well, who market the a in share we've to that excited you've really had seen sort little you've slow about strong bit, market down, recently. really clearly, players deliver

March back it to probably when it April, So appears switching March. or or comes off, in

we Bears, that this our with are better market earn and was And strong place, the trust to the retain a we player than our in some partnerships products been before. able including we've lot We it feel and marketing Chicago product. clearly with playing have prepared for in

why be products. stay and able the be to so to successful to to and to able our to open excited the players opportunity been with chance get to up to the new increase pretty able player we're demonstrate we've So flow be the

Operator

from Sigdahl Ryan The with is Craig-Hallum. next question

RyanSigdahl

have -- the all I secondly, But NFL what afternoon. that the season in the imply as with our was NFL as benefit X% does it September, guess starting the that active does user; nominations. to you guess ARPMAU. incremental nomination monthly QX? other per And Richard the Congrats Good average well Want I sequentially. of about up revenue to on for imply start company was

KyleSauers

Yes, bit so last good and a the to call calendar actually it's -- on a I we growth good a talked little but across little this the to MAU expected QX about that question sports our be think due year. the last sport in spread we slower in QX seasonality

So the that's that's meaningful and And football a the into in September, of users in is, fact on MAU. saw the nicely season, and continued, the start October we QX pretty November. in again increase

are source the actually, I'd to of for question, to up time on any didn't will ARPMAU larger lower of ARPMAU players. expect be the probably was it our your we'll our meaningfully to it because mix pretty markets. And a the point, the part casino launch and in fluctuate players sports that because the only move And MAUs but But going than be more a of won't because So Connecticut and sports in we'll Arizona of it it QX. only impact then to NFL, then it's MAUs, the more QX, in of as I'd adjusting the likely your revenue those that ARPMAU over that it new have MAUs QX, really at was probably new to ton revenue new bunch generating growth. players expect in seasonality, be incremental continue quarter, the casino markets little actually we'd who a based and to of pull nicely And to have grow and much in down an add influx to because fact promotions. will the of it

RyanSigdahl

Thanks, On any weeks share early you metrics Helpful. launch ago, user Ontario, Kyle. there? few you can CASINOXFUN

RichardSchwartz

our Because really market those is aren't build learning making We're we any right, early. the to and that But are there our the I to before to expect opens. we're key that the next year. market a largest think getting shared ready sharing. when we're metrics build the time brand markets of market, and about everything flows for for sure one lot opportunity Yes, databases that registration sure the we've making obviously be

RyanSigdahl

money customers How brand brand does with Great. relative How and CASINOXFUN does real- your using building brands? the consumers? resonate the other that to I guess

RichardSchwartz

the in So that we're market. actually using BetRivers brand

is So as brand utilized BetRivers in a but market. the platform CASINOXFUN referred to the platform, being it's actually

we the is intent since now So investing are with brand that to a brand and in years. use Ontario, right building then

the in nice dollars is the at awareness investing a that that the really the others in there to So and brand before same of awareness. community consumers are time market in brand a type

RyanSigdahl

then both? more also you which if XX% said playing think good social those on Or I to One convert you in right? on And makes sense. states the they me effectively what there? guys that Do I Thanks. That are live real- here. you revenues is casino, as the there? plateaued money, last three churn quarters Can keep caught you that remind

RichardSchwartz

Right.

than dollars it as that, exciting did an previously acquisition using about data point in really other a real-money doing opportunity number. now, platform a heard we're as we're in So a out Certainly, building Michigan. an described, Pennsylvania, we right that's social in right not we And XX%. investing you before Ontario that

would expect under to people X%. historically, think it be I

basically are players Having So us. or responsible their at entertaining model they two, more rate, conversion there budget any to a like free play back like strategy are said engage want that or generating players a annual between without risk. works experience they spend and be their kind we've they with a well budgets, the forth validation that, a between that some the fact product to I think they when that few level with switch feel the that budget, switching of of for to feel real the quite we're heard they

social So to direction that to real-money are of players do know do and But generally, markets forth between go from that the two players we is convert we back do those legal. the them. when see those

Operator

comes The line Oppenheimer. with from Kelley next of Jed question the

JedKelley

Hey, question. taking great. my Thanks for

Illinois Just back the numbers. on

mentioned impact You had in about talk that highest on was you expenditure the GGR your performance? the the same quarters. game-parlay Can

RichardSchwartz

meaningful; through mainly say of But season for indicated getting we've the the say valuable price that, that football amount half better. pretty overall said of game-parlay have I is that players a improvements, is larger a it's Sure, Why tool improvement and improvements tremendous driver. better app and used over same it's our before as the since just would in I a probably app better gone experience is all even we it. having

We differentiation haven't other Also really limited game-parley can -- those, our bets the and you can't one that excited single product parlay other products to from game games. are we're about. most in really competition traditionally, really in

want -- to on those yards bay would can bucks, if So green that with and the that the be to to And bet you combine bucks be the Brady they that that a to XXX players spread. and packers the beat the bet allow extended spread game-parlay. only want; they same Brady over We you Rogers for parlay not

KyleSauers

got it's okay. COVID-XX; He's

RichardSchwartz

or game-parlay combine the same [Indiscernible] so. against so a went He's can other yards, any well parlay bets game-parlays. any up. we sport. And one Rogers other to through same as go Right,

a for college like So spread prop. and teams up win, exciting. to fact to the play on maybe fans that that their favorite A the we're game-parlays, same which really bet and opening of beat also nimbleness lot is football

So to adding of quite those a we've been offering. the more few

accelerated competition has playing differentiate And It even some area. said to in just only our critical but in does cases the I field. evens as meaningful. been field, So actually the playing with that the ability has it

JedKelley

your being own mean, -- the done you technology that single And calling that? game-parlays to through with are or game Cambie, extra I who's partnering calling adding

RichardSchwartz

Right.

can really leveraging are in that existing ability big because one spending core we supplement help the thing cross-sell sort to can't from not that. also quickly. we parlays, for are of and the when a parlays same the do that but which the for doing, you is game-parlay your offering. settle But of bets individual betting companies different be you're limited sources. that what you And companies multiple do So have sort do outsourcing some engine different you can to noticed their to And as that you benefit have really you you players. odds bet the to from multiple platforms a have And coming two is source of allow extend providing other we're organic, you

-- experience. it So makes driven in pretty integrated by part is for the user large so unify it have it, seamless system, we Cambie it's and the but we way it

JedKelley

mean Indiana and you. with And Got states any back sort when numbers of is Thank AI potentially such i-gaming. are success And more property enter you the are mean, having that we two York, as legal you that then where New there Illinois, just you leverage to it. The I market? gaming? see I Connecticut can your way phenomenal. neighboring then with Michigan's

RichardSchwartz

well. are showing our in to some markets mind last I-casino us, we're so as of we've the those future exciting think top dropped. and of Indiana seeing Missouri opportunity, you Illinois, is for move. location there seen just two of we being And terms and for convenient our bills buckets And the Sure, know, in categories bills is evidence dropped a some in opportunity come markets given Midwest, year, I that mentioned of and lot think, were which that Indiana, Illinois to

clearly extra move vis-à-vis revenue that So the decide fodder casino category of given to really to that state's forward betting category sports direction. in success is

for help So this thing really to in regulated. on is each trying lobby time and to are nice we're encourage getting out monitor reaching this years, all focus can the and continuing legalized these really and moving competitors rate. to other our where The category accelerated an markets we first to about

positive of momentum. lot a there's So

to it just a of is in I few very a we're before opening any additional the matter US meanwhile, time largest up. a state in In the excited open markets which start of the a was us the market will to think casino Ontario, population be near future. online it's going for be up that large, if

property all on market close the of are casino of that done leverage casino given we've based the sportsbook for with the publicly, shared And -- property base sorry, commercial the yes, the as of not states commercial York, another it have commercial land has opportunity best horizon. terms some the casinos by necessarily the to the working of New to and four terms in to excited we're perform the revenues player on and So in that a in in side, the that's it's revenue. retail largest because not that state should we well,

it to in them a state that nice work has online well. So database our and a with there's brand plan as market to

Operator

comes Needham. with of line from McTernan question Bernie the next The

BernieMcTernan

question. given need the thanks you fill holes that worth M&A maybe take of just you given want advantage you equity your Richard, that framework, is movement stock, for any in more? the to your remind of taking Great, could us can now or

RichardSchwartz

Sure.

then have we mentioned really continue that the market to some able be the Things matter, investments quality of something us. of have justify that that So we that don't lot ahead we which scale we've the we're to in that some product and own opportunities which do we have companies that and to strengthen term and to larger really just portfolio, find potentially its shown, category, successful that to our for we of the -- we're all casino there, the need that the market, drive other long in looking access, want technology product into a in of that we we ways results to always we opportunities we've is same some what is needed seeing our be diversification think, we're house at. to markets have have There to do, look product are category. bring

we but the assets valuable, business are us future, and think utilize the brought that I we're to they're of industry. in to valuable a all of great be grow have able these time, to the for terms In the up because lot discussions

all improve greatest minded we're our be we that including So to look will categories companies three may open at interest databases to help think verticals or that the to are I it's always explore product most or us. brands, with options, whether opportunity,

BernieMcTernan

in Got to could just you see EBITDA on investment to the if for heavy XQ loss the relative expect in if wider be to wanted Kyle, you XQ. it XQ, marketing comments then and provide any on color

KyleSauers

thanks. Yes,

for currently we and would outpace might the benefit some states it the So these from QX. revenue. in from our marketing to would yes, expense in guidance launch how Connecticut, in going I of in expectations sequential we given up we're mentioned the that that we given get the remarks, move meaningfully Arizona, you the increase the the as increase QX spending in range expect expect out, new that and how is point in spend QX do pretty prepared margin marketing

probably on the about of some more than in but fourth means we're you've it, calendar. the the So I losing quarter just in And in that we QX third quarter. more are got the sports increase thinking spend, and commented

marketing related new Connecticut the launches. investment to you to were football, attract all little that always and when and in heavier players an So the states Arizona in the then And really on other And ready. going the launch new we've trying on are the of the regulators it's call, talked states. launches really that timing and the about when depend states to upcoming ultimate that's those

even bigger such is actually point, QX the and in spend expect much expect how year, in that specific bigger QX was be that I QX. would QX, QX to both your or than we be into I'd spend in bigger is than marketing, impact and that'll in bigger QX. and to So But it QX that would loss QX next

Operator

Goldman of question Stephen next The comes Sachs. from with Grambling the line

StephenGrambling

good consider and the just Hey, to in any profitability place that to takes maybe to that's to a puts path? path along kind thoughts jump any on thanks, of updated

KyleSauers

the the operate Sure, already few to And business profitably. that I'll markets. And profitably we're this past in ability we've news in one. operating is quite good take a demonstrated

of are casino in it's that rollout obviously, of this there's $XXX of that the looks well. that or the different our at dollars the fourth an this situation it's what competitive markets, the in doing I depend a competitors million around but think are to work. environment And getting we're that's of end operating And being like, guidance which definitely terms those going really lot really in and And should promotions has we marketing have point, that. in and the put behaving new operator year that both offered and we're ways of XXX guidance, to aggressive, us different at markets. on timing competitive And make to market. commentary largely near largest are and in our outright pace markets, top sports in revenue us and

confident before markets When But states down are when more markets to mature, we wait and more have less markets get near approved in we're part that bunch or clarity. markets new years to little Hopefully, we've the new continue I opportunities all here going strong coming will focus of going eventually say less have next it they have there's the we're a in but slow invest we'll we're we'll we'll So today. and the forecast near and a going approved on while the demonstrate until markets, for term, I'd profitability. term, we continue expect we'll don't profitability. to new mix, invest to profitability see to to highly over or about talked that more in to that we're think year timing

StephenGrambling

split any the makes betting, in at markets what i-gaming sports versus where and acquisition sense. is And path the you and look as revenues users evolving. overlap, gears it, be i-gaming Got the how or sense either the we then have for versus sports changing customer maybe only may perhaps of in only

RichardSchwartz

the also states, reflective broken the let's near quarters were two it's out the we end we And past higher is, of probably sports in haven't So the our overall, but between over three have we run in several say that and casino. mix QX, shared has split calendar. that's thirds quarters,

players, expect a value player two of sports is, that's and might what who's worth more sports And both in that times the is casino player the towards and a value. in other five our in that terms that fourth a only shift revenue quarter. So like pointed even little from to thing times bit I is generated is someone out we've something

So there's value a both states we of of types those have where players. to lot

big a to live be like And we that contributor. expect reasons shortly. So markets we Ontario, that'll it's one of be here the love going

StephenGrambling

Make I have to different cohorts. this then one that in last shows you And think sense. just clarify, the one, deck slide

it I but XXXX still has kind understand I want You to what's that sure been like referenced The this quarter, on softening. of there. looks going just make cohort last

So And reverse driving that? out? I guess what's that will eventually

RichardSchwartz

Yes, call three a it's that a one. Illinois. this And talked I'd are fair two And about play actually question here ago. good I And months and there think about I and point really out. mostly at you it's things it's

some knows, first had Illinois, a as before head in everyone start is the our of market. The that entered we competition

the sharing in So from And so the -- that the back and market of XXXX. part cohort just others there. of were XXXX helping part chart the those players of that early XXXX acquired with is

which seasonal. is reverse piece, should second itself, The more to extent, some

So a a And lot only players market. from of the sports XXXX Illinois. acquired that's in were

cohort So that benefit from in means expect we'd the a to XXXX quarter. Illinois that fourth see

Operator

next comes from question Politzer of line the Wells The Daniel with Fargo.

DanielPolitzer

thanks Good my afternoon, for questions. taking everyone. And

a in bit. So first, just the promo wanted little I to drill stand,

mean, between strategy LTV, what or last your this over level pivoted the to misalignment basically promotion time back. of increased said your I mean, pulling One they're and certainly a months, few competitors period. extent you've recently changed over and there's and this of competition seen as CAC I

RichardSchwartz

little we're beyond inception increasing seen around month last at Similarly, business of that. since payback. six months of a still running we've over So the couple cohorts,

in there we hear players but return are are announcing. isn't edge, a period. So competition others faster And on those that seeing additional we time

up think rates registering numbers, going marketing up, them and drive if it to strong through and that course, them first down you conversion to those are you're the treat your of experience comes So those viewers' which how LTVs. you players how and get there, the offer rates retention going making they to I going Because having well spend get retention rates. get deposit. money efficiently and funnel conversion is like those they're once And and

to get lot but level the be the that a marketing competitive in to right you needs don't a companies So product it just class have And well. of to you say and to to service view our in where you here. aggressiveness, world can the are be at be would spending the get lot the down as of at need they product space I right have

down to to level to the and a results. product service it class deliver So side the the world at able be think both on I comes to ability execute just

point needing delivering one service missing real not you're some the get the do get mature or the invested returns. across not to and time puzzle, take to are to of piece to you're where with all a consistency more interfaces we have customer; getting risk product capital of going If that the probably back to you those

DanielPolitzer

just up Arizona recently such the extent maybe you can any that and Got Richard. signs, given maybe environment early markets other competitive follow with how then effectively and it's as just launched? what it, to Connecticut And give on thanks, any color is that an oligopoly, there that compared

RichardSchwartz

Right.

with is really sports the licenses, few to already see us, as weeks. have their only have DraftKings database Because FanDuel But you'll three and in to five pretty them ability happy alternately have markets I our we to we the exciting, live are one of that as this the size three terms we weeks already, of you of earlier including Connecticut's number have to and there a we at starting of out, few terms large already already top jump have are online in three, and us those expect markets. positioning. strong start seven we off a after them being being what with lead other think a competitors, know mentioned for for only call, they only in on very it's share the So a as operators

it we multiple going time, to there to two great our the is, top partnership grow all actually of around there these we and opening thing open opportunity out three, yesterday, We and have was market locations to retail up, only with have and scale tomorrow. exciting state. the mentioned a So try sites on try having site. try the really are site I over because be difference the notice sportsbook opening able we're going to Connecticut you what's they're great when shows up really players grow how with think and Sportech to they Lottery actually going treat On more fourth and the with in that are our them a that to

end total So a and of coming this the on seven more of opened we'll sportsbooks by three after. week side retail soon have the

in the it's strategy I work we think that with on when -- based seeing to and a So to markets. that we're venue there traffic will closely once online opened, going going partners to strategy those other are very drive successful really useful use be site, to be our

way that start to for put think be in market opportunity marketplace. growing be and just really have to that really Connecticut keep we use those an we off we will So where going that unique think assets it's to because will may over be, a us we in time

DanielPolitzer

you Got it. did quick And thought housekeeping and missed but then revenue item I one if for get just I Columbia this, the quarter?

KyleSauers

it'll did That'll our XXX% in south of more But a somewhere get it year. XX% We not revenue. to exact be than little compared grew it's Columbia revenue. -- XX-Q, of be last

Operator

line the next The Capital. Engel Roth of from is question with Edward

EdwardEngel

a I an make Hi, that's and more there that wondering was agreement sport trying maybe in in to fans, to any that complementary taking my might and or use is be there widely -- question. product. in party licensing, sports been thank interest launching has license philosophy for third or known you then a for brand

RichardSchwartz

day, lot And consider all of options to a that national get excited remember having as ability And from Connecticut. comfortable to is is our nature; four to always by both strategies that was end two very referenced continue it we the the And at that with as in we've Jersey as local brands thought a local really are at that we're United than use But feel we its that, have and BetRivers evaluate a to really looked doing online a about working Kyle the expanded The SugarHouse that spending we and regional current brands we really doing. national. revenues resonates gaming nature regional; The local So we something more New all a they're brand great have to proven in we're less though what and lot little marketing that company, others options comfortable. earlier, very States. very country of level. to we said available. everything,

EdwardEngel

gaming that. even the Great, i-gaming, social there's some that larger some wondering, thank I a just some And products? was you make just give in an which to to cross-sell you success your had given opportunity access of customers. may on of would for gaming i-gaming to with then with you've target you think acquisition be social do side, an database the

RichardSchwartz

a that And those are things earlier that opportunities. have could definitely certainly you future different something internally, ours, have that of business we can certainly definitely look to think mentioned an something to casino strong idea appeals with look build I really if that idea which databases, organization those could you interesting be are for the like all fit product discussed nice that kinds from. to that's find worthwhile benefit in you there. And be we've demographic. a certainly company something a that a a I options that if Yes, a would around is we the development Certainly, evaluates is relevant but

Operator

Hickey is the line The next coming The of with from Company. question Mike Benchmark

MikeHickey

thanks Canada, on for are? Hey, questions. And just operators the sort gray my how market curious how significant taking the of competitive that Congrats there? guys, quarter is Richard, On Kyle.

RichardSchwartz

I market That's the we the there knows the pretty to and comes that side No focused things. and knows Sure. know think heavily And really answer answer truth. the great most has is sportsbook what the really scale it for question. do of on down a is gray no the historically one market one of really size,

to also the So market. certainly, some regulated I platforms, going there's in players think of databases and be be they already competing in core

side, the on get may we're ability about product one category, promote social as there, casino experience of that sort you've be we without is be type several operators of was database of the really familiar are exposure strange a markets. a retail to Michigan who how the that to focusing a early it's will gray we're players any European the brand, Well, casino with not saw able to in very sites players Michigan in as have, the delay, those some opposite. the an right online, seen casino way, come though, market excited casino On audience thing from the and the had question of there transition large much away

a gray there's European going Some the kind market real to be here, little market launch markets of to ability those into delay of regulated delay. a site

it's to of sportsbook do to see as going the in many nowhere cross-sell interesting heavily think but I near think really much that as hasn't that we past in category So have, sportsbooks. I been to those the the casino one real-money promoted been be brands is advantage that's how and market the I said marketing, as

who So we think market obviously like is for exciting opportunity will the someone very the be casino to us. there, attracted us, for

MikeHickey

staying operators, where Nice, the to sort the would gray with can compete? of in of that existing in licenses, to they and of -- then you their thank construct under just continue provincial as market did they clarify to that opposed fact, the you, sort stay they anticipate current sort

RichardSchwartz

from Well, be market actually it's is understanding to same for. be will to kind they that convert by applying applying that for license will the a regulated able we legal market us environment gray of hybrid, my

MikeHickey

retail given of database leverage to other New Okay. in to York, market? you of rivers advantage opportunities in in And XX sort able the then or are their casino that terms the

RichardSchwartz

plan the to Yes, is do so.

MikeHickey

question. Last right. All

sort does late, encourage you've XX%, scene look America and sort Thanks, guys. had on and said lot Columbia, a sharing for broader beyond the Columbia expansionary that landscape sort late, of you Latin growth. to you success, the of of arrived sort of you're You of

RichardSchwartz

expansion. it being the market short opportunity next really out strong be our for the but a -- correct in and talking We're short giving extra that large hearing payment being it, confidence Brazil's it work those markets been legalizing, term all going that some building the phase and strategy the that region. the you've well does then, teams, are give teams, Since Argentina betting, be years providers, really which the growth, to preparing is market banks, have be exciting that going a for localizing it and of that does worked regulations we the location vendors, really the we has about what's legalized are language the would rumors were we're product, still into may anticipated validation the stepping the And things stone are should ourselves not really teams, other us great also legalizing, and the that Mexico's a seen focus would ago heavily Yes, Thanks. products, focus not leadership We for of we developing on. populations. other of for localizing markets. in when use positive, and one that nearing site, invested sports be conclusion,

region. or markets explore other to And in we so we leverage the be think Colombia to and we really able have that a in real take had advantage the to that success

from or operator. now on exist the they late platforms, These there. to companies different kind market is region. have that going answer for really you interest So there co that strategy local lot in creates long That's the of larger same to a own other us think the go the efficiencies. that companies yes. platforms, global a we're platform market of I term use high for then area exist, sounds on different of which platform buy looking of our was early companies local would already build I really the technology their say And and markets, an with come the helpful, But

our that of we a globally create efficiencies and the all the different in For region, platform to the us, use organization we which that same lot do markets other obviously are go markets utilizing for will we marketing same when making that confident between the development will tools. are be all sure

for we're a region really Colombia. the route excited So future that success in given in

Operator

Richard closing conference like now waiting are would this over time. to for the turn Schwartz I questions additional back There any remarks. at to no

Richard Schwartz

like time RSI strong how the know at shared more our in quarter. have history last repeat industry. I closing, positions Great in I'd I've about what In to questions. exceeding been dynamic we excited I are of

including to heavily we just by stronger day. contested strong We'll the growing Connecticut. and We we and gain York in continue New like successfully new are are experienced across markets market share ones very

ahead We have ample of growth opportunities us.

we Louisiana, these In For two XX example, last months, York, in the New going the Maryland, million last of Ontario, months. six the enter entered we're six population million is months, of the a markets, million next with to XX times six four population Arizona, XX Connecticut in compared in markets about people which people.

for us. ahead is growth of lot a So

for believe a have already today. RSI. This you to RSI rationalize as remaining joining our advantage XXXX. we're and third top demonstrate rationally to us marketing. and the for flexible why industry ahead change continue of competitive players, sustainable we We they is begins how nothing how invest or will would we rest bonus operating the to Thank grow market is line ability quarter we when for in as best And prudent and the

Operator

I hope day. Rush Interactive enjoy Quarter That all Earnings your Call. the the XXXX rest Street includes of you Third

disconnect You may your lines. now

Lauren Seiler	Associate Vice President of Investor Relations and Development
Richard Schwartz	Chief Executive Officer
Kyle Sauers	Chief Financial Officer
Chad Beynon	Macquarie
David Katz	Jefferies
Ryan Sigdahl	Craig Hallum Capital Group
Jed Kelley	Oppenheimer
Bernie McTernan	Needham
Stephen Grambling	Goldman Sachs
Daniel Politzer	Wells Fargo
Edward Engel	Roth
Mike Hickey	The Benchmark Company

Rush Street Interactive (RSI) 11 Nov 212021 Q3 Earnings call transcript