Northern Exposure: NorthStar, Rush Street Interactive Provide Financial Updates

Greg Warren
Written by: Greg Warren

Each week, Canada Sports Betting recaps all the top sports betting and iGaming news in Canada and highlights upcoming events.

Our top stories this week

Event of the week

UFC 301 – Saturday, May 4

Just a few weeks after a huge milestone UFC 300 card, UFC 301 will take place in Brazil on Saturday night.

Brazil’s Alexandre Pantoja (-185 @ Sports Interaction) will put his flyweight title on the line against Australia’s Steve Erceg (+150) in the main event. The main card will feature four more bouts, all featuring a Brazilian fighter.

Check back with Canada Sports Betting on Friday for a full betting preview of the event.

NorthStar reports year-end results

NorthStar Gaming (NorthStar Bets) released its year-end earnings for 2023 on Monday, revealing 103% revenue growth in the fourth quarter and 240% for the entire year.

“NorthStar is very well positioned to build on our momentum in 2024,” CEO Michael Moskowitz said in the release. “We expect to grow the managed services business we acquired with the Slapshot Media transaction. Ongoing innovation in both our casino and sportsbook offerings, as well as enhancements to our unique content vertical, will help continue to deliver a compelling player experience. We will maintain our focus on operational excellence, prioritizing customer service and retention as a core aspect of our premium positioning.”

Some of the financial highlights (in Canadian $) from Q4 include:

  • Revenue, including managed services fees, net of bonuses, promotional costs and free bets, was $6.5 million in the three months ended December 31, 2023, an increase of 103% over $3.2 million in the same period of 2022.
  • Total wagers at Northstarbets.ca were $213.3 million in Q4 2023, an increase of 90% compared to $112.3 million in Q4 2022.
  • Gross gaming revenue at NorthStarbets.ca was $7.6 million in Q4 2023, an increase of 85% over $4.1 million in Q4 2022.
  • Gross margin was $2.5 million in Q4 2023, an increase of 127% over $1.1 million in Q4 2022, and represented approximately 39% of revenue compared to 35% of revenue in Q4 2022.

And some highlights for the entire year of operation:

  • Revenue, including managed services fees, net of bonuses, promotional costs and free bets, was $19.4 million in the year ended December 31, 2023, an increase of 240% over $5.7 million in 2022.
  • Total wagers at Northstarbets.ca were $648.8 million in 2023, an increase of 251% compared to $184.7 million in 2022.
  • Gross gaming revenue at NorthStarbets.ca was $22.5 million in 2023, an increase of 208% over $7.3 million in 2022.
  • Gross margin was $7.1 million in 2023, an increase of 492% over $1.2 million in 2022, and represented approximately 36% of revenue compared to 21% of revenue in 2022.

NorthStar says total wagers have now exceeded $1 billion since the operator launched in May 2022 in Ontario. The brand has expanded across Canada through its acquisition of Slapshot Media (spreads.ca).

RSI reports earnings

On Wednesday, Rush Street Interactive (BetRivers) announced its Q1 earnings.

The operator is reporting first-quarter revenue of $217 million (USD), up 34% year-over-year, and a net loss of $2 million for the opening quarter after posting a $24.5 million net loss in the first quarter of 2023.

“We are extremely pleased with our record first quarter results achieving company quarterly record Revenues and Adjusted EBITDA of $217 million and $17 million, respectively,” said RSI CEO Richard Schwartz in the release. “This was accomplished by growing both our iCasino and Online Sports businesses by over 35% year-over-year, in large part by acquiring new players more efficiently while simultaneously increasing the number and value of our users. Our team is proud to have achieved these results, which stemmed from our long-standing, unwavering commitment to prioritize the quality of our product and customer experience.”

The operator says average monthly active users in the United States and Canada were approximately 176,000, up 20% year-over-year.

RSI expects revenue for the full year ending December 31, 2024, to be between $810 and $860 million (between $50-$60 million adjusted EBITDA), increasing the midpoint by $35 million compared to the original guidance. At the midpoint of the range, revenue of $835 million represents 21% year-over-year growth when compared to $691 million of revenue for 2023.

RSI was one of the first operators to launch in Ontario’s regulated igaming market in April 2022.

Rivalry’s 2024 projections

Rivalry Co-Founder and CEO Steven Salz penned an important letter to shareholders this week detailing his projections for the company and his thoughts on where the igaming industry is heading as a whole this year and beyond.

Most importantly, Salz reiterated that the company’s goal is to “define the future of online gambling for a generation born on the Internet.”

Rivalry has strategically targeted Gen Z bettors as its predominant customer base and that resulted in $423.2 million in betting handle in 2023, up 82% from the previous year. The operator is an industry leader in esports, but it also boasts its own proprietary collection of iCasino products in addition to traditional sports betting markets.

“Online gambling in 2024 is radically different than it was just six years ago when Rivalry launched,” Salz wrote. “In that time we’ve seen gaming and internet culture reshape how consumers engage with technology. That shift is broadening the definition of gambling, where product design is influenced by video games, or it exists fully embedded within social apps like Telegram, where content creators are the new affiliates, and much more.”

Salz is projecting crypto wagering, which accounts for one-quarter of global betting handle according to some industry estimates, to become even more commonplace moving forward.

“The shift in consumer behaviour and the signal from our users is clear – interactive, volatile, and crypto-infused product experiences will set the precedent for how the next generation gambles online,” he wrote. “Soon, we will reveal plans for a crypto-enabled product set to enhance alignment between Rivalry and its users, increase network effects, and generally deliver a consumer experience that lives on the Internet of 2024.”

Salz will be on a panel at June’s Canadian Gaming Summit in Toronto discussing how to engage Millennial and Gen Z customers in today’s online gambling market.