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Rush Street Interactive (RSI) is reportedly exploring strategic options including a potential sale of the business.

The US online gambling operator has approached several potential buyers including DraftKings, according to anonymous sources quoted in Bloomberg.

RSI is the sixth largest operator in the US online sports betting market, with the company’s BetRivers brand holding an approximate 2% market share.

The business also has a significant presence in the Latin American online gaming market through its RushBet brand, which could be part of the rationale for a deal with any potential buyer.

DraftKings recently announced the $750m purchase of Jackpocket, which will need to be digested.

Former CFO Jason Park was this week appointed as DraftKings’ chief transformation officer, in part to ensure the smooth integration of the lottery business.

In a February earnings call, DraftKings CEO Jason Robins said the business was “going to be super disciplined on M&A”.

“I don’t think you’ll see us go in this rash of buying companies left and right,” he said.

More consolidation in the US?

If a deal between DraftKings and RSI were reached, it would mean yet more consolidation in the competitive US market.

Many operations have closed down or been acquired over the last two years, including 888’s SI Sportsbook, Kindred’s Unibet, PointsBet, TwinSpires and FoxBet, among others.

OSB operators have struggled in the highly competitive landscape, which demands high costs of entry and is dominated by the two historic DFS giants FanDuel and DraftKings.

The news led to an 11.7% share price spike for RSI to $6.90 per share, before settling at around $6.40.

This followed a 15% share price increase earlier in the month after the operator posted strong results in its FY23 financial report.

“These results and the ensuing momentum have carried into strong guidance for the new year, reflecting our longstanding customer-centric principles and obsession with developing innovative and differentiated user experiences,” said CEO Richard Schwartz at the time.

“With a substantial cash balance and no debt, our financial wherewithal provides us the luxury of being able to continue executing on our long-term strategy and investing appropriately in new markets.”

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