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Chicago’s Rush Street Interactive, the company responsible for the BetRivers and SugarHouse brands, will be closing its operations in Connecticut. The company will be ending its partnership with the Connecticut Lottery Corporation later this year, allowing the CLC to select a new online gaming partner.
According to CEO Richard Schwartz of RSI:
We appreciate the partnership of the CLC for the past two years and are proud of our collective achievements in Connecticut. We have valued the relationships we have formed with the players during this time. After careful consideration and discussions with the CLC, we have decided to wind down this partnership in alignment with our long-term strategic goals and in the best interest of RSI and our stockholders.
RSI in Connecticut
After winning a competitive bidding process, Rush Street Interactive entered the Connecticut market. In August 2021, the CLC chose RSI as its sports betting partner. Additionally, Bet Rivers runs a sportsbook in Illinois.
RSI outperformed 15 other applicants in Connecticut to join FanDuel (in partnership with the Mohegan Tribe) and DraftKings (in partnership with the Mashantucket Pequot Tribal Nation) in the market.
After recently going public, Rush Street was optimistic about the potential for increased profits in Connecticut. Despite its small population, the state’s high median income made it an appealing market. Furthermore, with only two other operators in the state, competition was less fierce compared to other Northeastern states that have 10 or more sportsbooks.
The company is closing down after only two years of a 10-year contract.
Schwarz stated that both RSI and the CLC are dedicated to prioritizing their players, as is the norm for their operations. They plan to support all player wagers during the transition, ensuring a positive player experience. Schwarz anticipates that the changeover will not significantly affect their guidance for 2025.
PlaySugarHouse.com and RSI’s retail sports betting locations in Connecticut will remain closed until a new operator is selected by the CLC.
Ongoing struggles for RSI
In a fiercely competitive environment, Rush Street Interactive operates as an underdog, offering its BetRivers and SugarHouse products in markets typically dominated by DraftKings, FanDuel, Caesars, and BetMGM. The company’s shares have declined by 61% in the last year, and it reported a net operating loss of $134.3 million in 2022.
The modest earnings following the Connecticut news have reignited rumors that RSI could be bought out by a bigger company.
Online casinos the next frontier?
Sports betting is known for its slim margins, and RSI withdrawing from Connecticut highlights the challenges that operators can encounter. Despite this, RSI’s primary focus is on its online casino offering.
The company’s departure from Connecticut may indicate a shift in focus towards its casino operations. Legislation is being proposed to legalize online casinos in Illinois, with other states likely to follow suit in the near future. This could potentially bring about a fresh start for the struggling RSI business.
New competition in Illinois
RSI’s departure from Connecticut coincides with a changing landscape for Illinois casinos. For a while, RSI has held a virtual monopoly over Chicago gamblers, with Rivers Casino Des Plaines being the primary in-person casino option for Windy City and nearby suburban residents.
New operators are entering the Illinois market, establishing RSI in the growing casino scene in Chicago. The Temporary at American Place is already operational, with plans for further expansion. The Temporary at Bally’s is set to open at Medinah Temple this summer, possibly in June.
RSI’s decision to withdraw may indicate a shift in focus towards its home market in Illinois, where the larger sports betting market offers greater revenue potential for the company.
Based on data from Eilers & Krejcik Gaming, BetRivers accounts for approximately 10% of Illinois online sports betting’s total gaming revenue.
