Listed operator Rush Street Interactive (“RSI”) and the Connecticut Lottery Corporation have announced the joint plan to wind down both their online and retail sports betting partnership in Connecticut.
As a result, the Connecticut Lottery Corporation will begin the tender process for a new sports betting operator through a traditional request-for-proposal process in coming days. Rush Street has agreed to continue both online and in-person operations until the tender process is complete and a new sports betting operator is chosen for the state. The transition, according to the two companies, is expected to take the first half of the year, with a new operator being operational by H2 2023.
The most recently reported figures by the Connecticut State Department of Consumer Protection show a total for sports betting handle for the state in January 2023 of $167,763,044 up from $160,266,050 in December 2022. Adjusted gross revenue also rose from $15,375,076 in December 2022 to $17,156,956 in January 2023.
However, the numbers posted by the CLC and RSI were far below that posted by the Mohegan Sun’s online sports betting platform partnership with Flutter’s FanDuel, and Foxwoods platform, a partnership with sports betting behemoth DraftKings.
In 2022, in-person sports betting generated $98.7 million for CLC, and $143.5 million through online. That compares to $622 million by Mohegan Sun and FanDuel, and $656 million between DraftKings and Foxwoods.
Gregory Smith, President of the CLC, commented:
“We thank RSI for working closely with CLC to establish the foundation for CLC’s sports betting operation, both online and in retail.”
Richard Schwartz, CEO of RSI, said:
“We thank the CLC for their partnership over the last two years. We are proud of what we have accomplished together in Connecticut and have enjoyed the relationships that we have built with the players. Consistent with our long-term strategic goals, after much deliberation and discussions with the CLC, we believe it is in the best interest of RSI and our stockholders to wind down this partnership.”
“As is consistent with nearly everything we do at RSI, both RSI and the CLC remain committed to putting our players first. Through the transition we plan to continue to support all player wagers and ensure a positive player experience and expect the changeover will have an immaterial impact on our guidance for 2023.”
Connecticut is one of few states where CT online gaming is legalized. State partnerships through lotteries in monopoly style formats have come under scrutiny in other states too. Intralot’s struggles with Ohio’s sports betting kiosks have been well documented, while the Gambet sports betting partnership in DC has left stakeholders scratching their heads wondering where it all went wrong.
This provides a large opportunity for a renowned operator to come in and salvage some much needed market share which, clearly, RSI has not managed. The tender process will begin shortly and it’ll be intriguing to see just who the regulator opts for.