RSI CEO: Taxes from legalizing igaming would “blow away” OSB rate hikes
Richard Schwartz insists states with legalized igaming can better protect consumers from unregulated sites and generate significant tax dollars
Rush Street Interactive (RSI) CEO Richard Schwartz has talked up the benefits of legalizing igaming, insisting many adults in the US already have access to unregulated sites but without any player protection measures.
The spread of regulated igaming in the US has slowed to a crawl, with just seven states permitting online casino today, yet Schwartz believes states are missing out on sizeable tax revenue by not legalizing the vertical.
Speaking during the Oppenheimer 28th Annual Technology, Internet, and Communications Conference today, August 13, which was a webcast, Schwartz mulled over what could be the catalyst for a fresh wave of legalization.
“You have states under financial pressure, and a few of the states have added some increases to sports betting taxes, as seen in Illinois,” he explained. “But what you’ll see is that incremental amount is a small amount compared to what it would be like to add igaming.
“Three to four times more volume will come through icasino, so the taxes generated from icasino are going to blow away anything you get from increasing a sports betting tax rate.”
The RSI CEO continued, adding that the fact many governors are looking to raise sports betting tax is an acknowledgement that further revenue streams are required and that the sports betting-only method has “run its course.”
He noted: “The way to really generate meaningful revenues in tax for the state is through icasino legalization.”
Schwartz addressed states’ efforts to combat unlicensed casino operators, adding that it is another reason why legalization should be on the agenda.
“When we talk to governors or legislators, it’s like online casino is already legal in your state, with zero benefit. You’re not generating taxes, you’re not protecting your consumers, [and] in many cases, they are targeting underage people.
“It’s a real problem, so you regulate it, create a framework where you tax it and protect your consumers. I think that’s a very compelling argument that is much more visible than it was in the past.”
While several US states have shelved or had bills to legalize igaming thwarted, Canadian province Alberta is expected to launch its regulated igaming market early next year.
In contrast, last month Maine governor Janet Mills opted against signing a bill that would have legalized online casino in the Pine Tree State.
The topic is unlikely to be addressed again in Maine until lawmakers meet again next year.
Schwartz’s comments come two weeks after RSI posted $269.2m in Q2 revenue, a 22.1% year-over-year (YOY) increase, inspiring a 15% leap in its share price as a result.
Online casino revenue surged 25% YOY, while online sports betting revenue grew 15%.
A significant 88% YOY rise in adjusted EBITDA to $40.2m was also recorded.