Chicago-based Rush Street Interactive (RSI) has won favor with the Connecticut Lottery to operate its online and retail sports betting.
RSI, part of billionaire Neil Bluhm’s Rush Street Gaming casino business, beat out other bidders to partner with the Connecticut Lottery. RSI is currently operational in 10 states. Its iGaming brands include BetRivers.com and PlaySugarHouse.com.
Sports betting was legalized in Connecticut earlier this year. Lawmakers and Gov. Ned Lamont (D) expanded the Class III gaming compacts with the state’s two federally recognized Native American groups — the Mashantucket Pequot and Mohegan tribes. The new terms granted each tribe rights to operate sports betting at their Foxwoods and Mohegan Sun casinos as well as online.
The expanded gaming additionally allowed the Connecticut Lottery to participate in sports betting by partnering with one experienced third-party operator, which today was confirmed to be Rush Street Interactive.
“Rush Street Interactive is a respected sports betting and gaming company that has established itself as a leading innovator in the industry,” said Rob Simmelkjaer, chairman of the Connecticut Lottery Corporation.
The Connecticut Lottery also announced that Rush Street will partner with Connecticut-based Sportech to offer sports betting at 10 of the restaurant company’s off-track wagering locations.
Rush Tops Bids
After Connecticut legalized sports betting, the state lottery fielded proposals from interested third-party sportsbooks. The lottery says it received a total of 15 bids. But Rush’s pitch was the best.
We are impressed not only with RSI’s successes in other jurisdictions, particularly in neighboring New York and New Jersey, but also its commitment to responsible gambling practices,” Simmelkjaer explained.
Connecticut lawmakers set the sports betting tax structure — 13.75 percent of gross revenue derived from retail and mobile sports wagering. The Connecticut Lottery was searching for the best financial proposal, plus other considerations such as an operator’s track record in adhering to state regulations, curbing problem gaming, and being a community partner.
Rush Street Interactive has guaranteed a minimum revenue share of $170 million to the lottery over the next 10 years. That means the firm must win at least $1.236 billion during the next decade, otherwise its promise would result in RSI paying a higher tax rate that mandated.
Foxwoods is partnered with DraftKings, and Mohegan Sun with FanDuel, for their sports betting and iGaming. The tribes will pay the same 13.75 percent tax on their sports betting proceeds. As for their online casino slot and table game operations, which the lottery is not allowed to participate in, such revenue will be taxed at 18 percent for the first five years, and 20 percent thereafter.
Investors See Bounce
It’s been a good week for Rush Street Interactive. Publicly traded on the New York Stock Exchange, RSI shares increased following DraftKings’ announcement that it will spend $1.56 billion to acquire Rush competitor Golden Nugget Online Gaming.
RSI’s stock price is up nearly 30 percent this week. The news out of Connecticut was responsible for a nearly 5.5 percent gain today.