Prediction markets are not eating into Rush Street Interactive’s (RSI) sports betting business in North America, bosses insisted during the company’s Q2 earnings call on 29 July.
Responding to a question from Chad Beynon, senior analyst at Macquarie, about any potential negative impact on the operator from prediction markets, president and CFO Kyle Sauers said RSI had seen minimal effect from the rise of nationwide platforms such as Kalshi.
“I think the answer is no; we haven’t seen that impact, but it’s also true that we probably don’t have a perfect visibility into it,” he explained.
“The fact that we’re not focusing on player acquisition in sports-only markets, and we are doing as well as we are in sports relative to our peers, probably tells you that we’re not being impacted by it a whole lot.”
CEO Richard Schwartz chimed in by saying: “I would just add that we’re not catering to sharp customers either.” He followed this comment up by suggesting prediction markets are “more appealing” to the sharper cohort.
Boutique analyst firm Eilers & Krejcik Gaming (EKG) said in its newsletter published Thursday, 30 June, that Schwartz’ remarks aligned with its own research.
In its Prediction Markets Monitor for July, EKG estimated prediction markets are only reducing online sports betting handle by around 2% to 4% in mature and competitive states like New Jersey.
RSI has sat on the sidelines while rival operators like FanDuel, DraftKings and Fanatics have launched prediction market products, including sports event contracts, joining the likes of Kalshi, Robinhood and Polymarket US.
However, RSI did file an application with the derivatives regulator, the Commodity Futures Trading Commission (CFTC) in Q2 to operate a designated contract market (DCM), though management said the move “ensures we have the flexibility to navigate all possible outcomes” in what is a “highly dynamic” landscape.
Schwartz said on the call: “We do view the applications as a way to preserve our strategic flexibility, to maintain our optionality [to] ensure that we’re not caught flat-footed should the market or regulatory environment evolve in a way that becomes relevant for our business.
“It’s really just being prepared and preserving optionality.”
Bosses reiterated that the business maintains a casino-first focus and does not intend to “lean into the crowded sports-focused prediction markets space”.
Analysis released earlier this month by Macquarie suggests prediction market trading volumes could reach $1.5trn by 2030, up from $22bn this year. Nearly half of the $1.5trn would be made up of sports event contracts, Macquarie noted.
RSI’s online-only sportsbook brand, BetRivers, is live in 15 US states, though online casino represented 72% of the Chicago-headquartered firm’s revenue in the second quarter.
Management announced new quarterly highs across revenue, adjusted EBITDA and net income for the second quarter, as RSI benefited from market share gains in online casino and a boost from the World Cup.
RSI operates BetRivers and PlaySugarHouse in North America, while Spanish-language product RushBet in licensed in three regulated Latam markets: Colombia, Mexico and Peru.
The New York-listed company’s stock has outperformed most of its peers of late, climbing 60% to nearly $31 so far this year.
This week a federal judge stopped Minnesota from banning prediction markets in the state, arguing the CFTC has “exclusive jurisdiction” to regulate the industry and that any block would cause “irreparable harm” to Kalshi and Polymarket.
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Operator says application filed with the CFTC in Q2 to operate a DCM is about not being “caught flat-footed”, with no imminent plans to offer sports event contracts
The post RSI’s sportsbook in North America “not being impacted” by prediction markets first appeared on EGR Intel.