Rush Street Interactive is ready for sports betting.
This past week they announced via press release they have launched a partnership with global sportsbook supplier Kambi Group PLC. The move marks Rush Street’s first major play toward sports betting. The company owns two Pennsylvania casinos, SugarHouse and Rivers Casino.
In the release, Kambi Cheif Executive Kristian Nylen said Kami’s top-notch products are a good fit for the American gaming group.
“This agreement with Rush Street Interactive, one of the most respected gaming companies in the U.S., is recognition that Kambi not only has online premium sports betting services ready to appeal to American sports enthusiasts, but those services will help protect the integrity of sports.”
Rush Street Interactive President Richard Schwartz also noted that the company has full confidence that the partnership will produce an excellent product that preserves the integrity of each bet.
Kambi partnership may be a sign that PA tax isn’t a big issue
One of the key issues of sports betting in Pennsylvania is the proposed 36 percent tax on sportsbook revenue.
Greg Gemignani, an attorney with Dickinson Wright who specializes in gaming law, said in an interview that sportsbooks could face financial difficulties if state taxes are enough that they take a significant chunk of the operation’s win.
He pointed out that Nevada sportsbooks have, historically speaking, averaged a 4.5-percent margin. Should Kambi and Rush Street implement sports betting via SugarHouse and Rivers, a 36-percent tax revenue would drop that 4.5-percent win to 2.88 percent.
We don’t know yet whether or not PA sportsbooks clear 4.5 percent. However, the Rush Street-Kambi deal reveals that both parties understand the cost and the taxes involved with running a sportsbook in Pennsylvania. And even with the potentially low margins, they are moving ahead regardless.
Competition a foregone conclusion
What will be interesting as Pennsylvania’s regulators determine the path and scope of sports betting is the concept of competition.
New Jersey’s Supreme Court of the United States win was somewhat of a formality. Atlantic City casinos were prepping for sports betting long before a decision came in.
For example, Borgata announced this past November that they were planning to open an $8 million sportsbook.
Atlantic City will no doubt provide serious competition with Pennsylvania’s eastern casinos. One of those is Philadelphia’s SugarHouse. It’s worth nothing the drive from Philly to Atlantic City is about an hour on the weekend without traffic.
Will Philadelphia residents choose to head to Atlantic City for its glamour and sportsbooks? Or will they stay “local” and go to Philadelphia to place their bets?
What is certain is that Kambi is ready to implement their sportsbook operations in the United States.
The company published a response to the SCOTUS repeal of PASPA this past week, saying the following:
“Kambi believes it is well positioned to enter the US as and when local laws permit, and is excited by the prospect of US sports fans being able to enjoy the Kambi Sportsbook. As previously communicated, Kambi has been proactive to ensure it is ready to launch in the US on day one of a legal market, and remains confident it will be able do so.”