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Rush Street Interactive May Go Public in SPAC Arrangement

  • Bloomberg reports that dMY Technology Group may acquire Rush Street Interactive
  • dMY is a “blank-check” company which would then rename itself to Rush Street
  • DraftKings went public using the same method in April
Dan Katz

Dan Katz graduated with a BS in Commerce from the University of Virginia and an MBA from Emory University. He clearly uses neither of those degrees now, having been writing about the gambling industry (specializing in poker) since 2005. Prior to that, he was an IT and management consultant. He is an avid gamer, primarily on PC, and enjoys collecting retro video games and consoles; finding room to set them all up is his current challenge. Dan lives in Atlanta, Georgia with his wife and two children. You can get in touch with Dan at [email protected].

Stock chart on top of stock prices
According to a report from Bloomberg, Rush Street Interactive may announce within days that it is being bought by “blank-check” company dMY Technology Group in order to go public. [Image: Shutterstock.com]

Express train to public trading

According to a report from Bloomberg, online gaming developer and operator Rush Street Gaming is in discussions to go public. Sources close to the business media outlet say that the Rush Street’s partner for the move would be special purpose acquisition company (SPAC), dMY Technology Group Inc.

dMY still needs to raise another $150m to go through with the merger. It already raised $230m in its own initial public offering in February.

A special purpose acquisition company, also called a “blank-check” company, is created specifically to acquire another company so the target company can become publicly traded. It does not conduct any business of its own – it offers no product or service. It is only there to attract investors. The money it raises is used to buy a company and then change the combined company’s name to that of the acquired business. In this case, dMY, which is already publicly traded, would use its capital to buy Rush Street Interactive and then change its name to Rush Street. By doing this, Rush Street Interactive is able to go public without all the steps required for an IPO.

Bloomberg says that a deal could be confirmed within days.

DraftKings, Golden Nugget do the same

Using a special purpose acquisition company to go public has become an increasingly popular move in recent months, especially in the online gaming sector. Companies can skip several steps to become a publicly traded company and investors can more quickly cash in on the growing U.S. internet gambling and sports betting industries.

In April, DraftKings went public in a three-way merger with SBTech and Diamond Eagle Acquisition Company. Diamond Eagle, a SPAC, bought both DraftKings and SBTech; the combined company then changed its name to DraftKings and its Nasdaq stock ticker to DKNG.

At the end of June, Golden Nugget announced that it was going to take Golden Nugget Online Gaming, Inc. public the same way. Landcadia Holdings II, a blank-check, publicly-traded company, will acquire Golden Nugget’s internet business unit. The resulting merged firm will change its name Golden Nugget Online Gaming, Inc. and change its ticker symbol from LCA to GNOG.

it appears that it was created for this specific situation

Landcadia II was not only created for the purpose of buying a company, it appears that it was created for this specific situation, as it was founded by Jefferies Financial Group Inc. and Fertitta Entertainment, Inc. Fertitta Entertainment holds the companies that are owned by Tilman Fertitta, one of which is the Golden Nugget casinos.

Rush Street making inroads in U.S.

While Rush Street Interactive does not have the brand name to the casual bettor that a DraftKings, FanDuel, or MGM do, it has been very active in the U.S. online gambling market. Almost as soon as the U.S. Supreme Court overturned PASPA, RSI announced a pact with Kambi Group in which Kambi provides Rush Street with its sports betting technology.

Rush Street Interactive owns the BetRivers and PlaySugarHouse brands and has been very aggressive in getting them into people’s homes. It now has online sports betting products live in five states. In New Jersey and Pennsylvania, RSI also offers online casino gambling.

pandemic shut down land-based casinos and sportsbooks just days after those first bets

Most recently, BetRivers became the first online sportsbook to launch in Illinois, just three months after becoming the first brick-and-mortar sportsbook to take a bet in the Land of Lincoln. The timing of the latter was unfortunate, as the COVID-19 pandemic shut down land-based casinos and sportsbooks just days after those first bets.

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