BlackRock increases Rush Street Interactive ownership to 13.3% stake: report

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The Backstory

Institutional interest follows an earnings reset

BlackRock’s increased position in Rush Street Interactive comes after a marked shift in how investors have been valuing the online casino and sports betting operator. The company, parent of BetRivers, has moved from a growth story dependent on market expansion to one increasingly judged on profitability, cash generation and operating leverage.

That transition began to show more clearly in 2025. Rush Street reported first-quarter revenue of $262.4 million, up 21%, and swung to profit from a year-earlier loss. Cash flow nearly doubled, while marketing expenses rose only 3%, suggesting the company was adding and retaining customers without having to spend at the same pace as revenue growth. In that quarter, North American monthly active users rose 17% and Latin American users increased 61%, giving investors evidence that its growth was not confined to one geography.

The company also began buying back stock, a signal that management saw value in its shares and had sufficient balance-sheet flexibility to return capital while still funding expansion. At the time, Rush Street maintained annual revenue guidance of $1 billion to just under $1.1 billion, implying continued double-digit growth. Those results helped establish the financial backdrop for a later re-rating of the stock, as detailed in coverage of how Rush Street Interactive’s earnings and profit grew in the first quarter.

Online casino strength buffered sports volatility

Rush Street’s improving financial profile also reflected the composition of its business. Sports betting remains a prominent part of BetRivers, but management has repeatedly emphasized online casino as a more durable and profitable product. That distinction mattered in the first quarter, when unfavorable outcomes from March Madness and the Super Bowl weighed on sportsbook performance across the sector.

Despite those results, Rush Street posted gains in both online sports betting and igaming. Chief Executive Richard Schwartz pointed to an 11% improvement in online sports betting revenue and a 25% increase in igaming receipts, while executives said higher-return markets were receiving a larger share of marketing dollars. The approach was designed to keep customer-acquisition costs under control and support margins rather than chase scale at any price.

The company’s cash position also strengthened. Rush Street ended that period with $228 million in cash and no debt, while repurchasing 500,000 shares at $10 each. A debt-free balance sheet gave it room to absorb regulatory costs in Latin America, consider new markets and invest in product improvements. The strategy was underscored when the company said it had surmounted adverse sporting results through growth in casino and disciplined spending.

Latin America added growth and tax risk

International expansion has been a key part of Rush Street’s equity story, particularly in Colombia and Mexico. Those markets have offered faster user growth than North America, but they also introduced regulatory and tax uncertainty that investors have had to price into the business.

Colombia became the clearest example. A value-added tax imposed under a state of emergency raised costs for operators, and Rush Street chose to absorb the hit through higher bonusing rather than pass the full burden to players. That protected engagement but pressured gross gaming revenue and profitability in the market. Management said the market had been growing rapidly before the tax and then flattened, showing how fiscal policy can quickly change the trajectory of an otherwise expanding operation.

Mexico presented a different risk. Rush Street saw the country as a larger long-term opportunity than Colombia, but executives also flagged the possibility of a higher tax rate. The company’s willingness to keep investing in the region reflected a belief that population size, brand-building and online adoption could outweigh near-term friction. Later in the year, management again pointed to strong Latin American player trends even as Colombian gambling revenue fell, and said it expected the Colombian tax to sunset unless lawmakers extended it. The company’s broader third-quarter view was captured in an outlook that saw upside across Rush Street Interactive’s markets despite tax and geopolitical complications.

Product investments became part of the valuation case

Rush Street’s stock gains also coincided with a series of technology and product moves meant to improve retention and transaction flow. In online gambling, small reductions in friction can affect deposit frequency, withdrawal behavior, play time and customer satisfaction. That makes payments, game content and platform speed central to the economics of the business.

One example was the launch of BetRivers Debit with Sightline Payments. The integrated debit product allows users to access wagering balances through a debit function rather than repeatedly moving funds in and out of their accounts. Sightline said the product included FDIC insurance coverage, anti-fraud tools and responsible gambling features. Initially launched in New York, the system was positioned for expansion into other U.S. jurisdictions and was developed with Cross River Bank. The move supported management’s broader argument that customer experience is a competitive advantage, as shown by the launch of an integrated debit payments system with Sightline.

The company also continued to add online casino content, including through suppliers such as Rubyplay, Octoplay and other studios in states including Delaware and New Jersey. More titles can improve engagement and provide cross-sell opportunities, particularly where Rush Street is trying to use one product as an entry point into a broader gambling relationship.

Leadership changes signaled a platform push

The appointment of Shubham Tyagi as chief technology officer added another layer to the company’s growth narrative. Tyagi joined from Warner Bros. Discovery’s sports division, where he worked on large-scale digital properties tied to NBA Digital, NCAA March Madness Live and Olympic coverage. For Rush Street, the hire suggested that management wanted to deepen its technical bench as it scaled across online casino, sports betting and payments.

Technology has become more important as operators face mature markets in some U.S. states and slower legislative progress in others. When new state launches are limited, growth depends more heavily on retention, personalization, game pipeline, uptime, responsible gambling controls and payment reliability. The CTO role therefore became less about back-end infrastructure alone and more about supporting the company’s revenue and margin model.

Rush Street framed the hire around innovation and a “player-first” approach, linking technology directly to the customer experience. The timing mattered because the company was also dealing with regulatory complexity abroad and competitive pressure at home. Coverage of Shubham Tyagi’s appointment as chief technology officer showed how the operator was trying to align leadership, platform development and product strategy.

Regulated igaming remains the central stake

The larger question for Rush Street and its investors is whether regulated online casino can expand meaningfully in the U.S. The company has argued that igaming offers states a tax-generating alternative to unregulated sweepstakes and prediction-market products, while giving consumers a supervised environment. That argument has gained urgency as states look for revenue and as gray-market products draw more scrutiny.

Rush Street has said it is cautious on prediction markets, citing legal uncertainty and regulatory risk. That position contrasts with companies willing to test boundaries, but it is consistent with management’s stated focus on sustainable growth. If prediction markets divert sports betting tax revenue, Rush Street believes the pressure could strengthen the case for legal online casino in more states.

For BlackRock and other institutional holders, the investment thesis rests on whether Rush Street can keep compounding revenue while protecting margins and avoiding regulatory missteps. The company has shown growth in North America and Latin America, improved profitability, maintained a debt-free balance sheet and invested in technology. The risk is that tax changes, slower legalization or intensified competition could narrow that path. The opportunity is that a disciplined igaming-focused operator could gain from every new regulated market that opens.