BIG DEAL: Phil Hellmuth Discusses His Role in Rush Street Deal Including Possible Online Poker Launch

Sean Chaffin October 1, 2020
Phil Hellmuth played a major role in the upcoming Rush Street Interactive/dMY merger.

Rush Street Interactive has been a leader in US online gaming and recently announced a merger with dMY Technology Group. The deal will find it listed on the New York Stock Exchange as RSI and valued at $1.78 billion.

Poker legend Phil Hellmuth was an investor in dMY and now has a chance at a nice return. Hellmuth recently spoke with PlayUSA about his role and investment and provided USPoker with some insight as well.

He also offered some comments that will interest online poker fans. Hellmuth says that Rush Street will be moving into the online poker space in the US.

I believe that Rush Street will have online poker up-and-running soon,” he told USPoker.

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Poker player turned deal maker

While Hellmuth didn’t offer details beyond that, the news could mean another player in the US online poker market. This comes at a time when operators have experienced record revenue numbers.

Rush Street could be a big player in the industry. The company is the leader in the US in online casino gaming and also offers sports betting in several states.

dMY is a special purpose acquisition company (SPAC) founded by Niccolo de Masi and Harry You. These types of companies look for investors to help fund asset acquisition and major stock purchases.

Rush Street apparently proved a nice target for dMY and Hellmuth helped facilitate the deal. He received a nice fee for his work and also stands to gain significantly from his investment.

I invested $300,000 and it was a gamble because I could have lost 100% of it had we not selected a company to take public within 18 months,” Hellmuth told PlayUSA. “On the other hand, my $300,000 investment became worth multiples of what I invested when the SPAC traded at $10 a share, now at $15 a share.”

De Masi spoke with FOX Business Channel about the deal on Sept. 25 and how RSI differs a bit from competitors.

“Rush Street is a leader in sports betting but it’s actually the number one player in the online casino space,” he said. “We are bigger than DraftKings or FanDuel or anybody else when it comes to online table games, slots, bingo, et cetera.”

Rush Street is already currently profitable, de Masi also noted. dMY chose RSI because it already had “the best product, best ground game, and highest return on investment capital,” de Masi added.

 

Another potential online poker operator

In the US, online poker is currently live and legal in New Jersey, Nevada, Delaware, and Pennsylvania. two others, Michigan and West Virginia, have also legalized online poker as well, but both are still in the licensure stage.

The ongoing battle regarding the Wire Act remains a thorn in the industry’s side. The Department of Justice has argued that the act applies to other forms of gaming beyond than sports betting.

The gaming industry won the first round in court, but the issue remains in a federal appeals court. That’s put growth of interstate compacts on hold until courts resolve the dispute.

Phil Hellmuth on the set of the WPT with Vince Van Patten.

WSOP.com currently runs the only interstate compact in Nevada and New Jersey and with 888poker in Delaware. If the DOJ opinion is struck down, more interstate agreements offer a chance at real growth in online poker.

The expansion of online poker and gaming has been slower than the rapid growth of sports betting. Many in the industry hope sports betting can lead to more online poker and gaming eventually. As the thinking goes, “If you’re going to legalize one form of online gambling, why not others?”

Rush Street could be a nice addition to the US online poker market. That has been dominated by PokerStars, partypoker, and WSOP.com so far.

For casino gaming, RSI uses its own proprietary software. That seems likely for any online poker launch, but remains to be seen. If courts rule the Wire Act applies to poker, companies like Rush Street may not see online poker as a smart business decision.

Hellmuth seeks like a likely face for any Rush Street online poker product. However, he told USPoker that he’s in the process of talking with three companies about a possible online poker and sports betting sponsorship.

A role in the Rush Street merger

RSI derives from Rush Street Gaming, which operates Rivers Casino properties in Pennsylvania (Pittsburgh and Philadelphia), New York, and Illinois. The company also offers online sports betting in New Jersey and Pennsylvania.

Rush Street is already approved for online poker in the Keystone State. A launch into both PA and NJ seems possible, but the company would be battling for a small gaming segment despite recent gains.

Beyond his initial investment in dMY, Hellmuth also had a role in orchestrating the merger between the two companies. Thanks to a previous relationship with RSI CEO Greg Carlin, he helped lay the groundwork.

Those negotiations led to a healthy fee for his efforts, Hellmuth says. Fittingly for a poker player, he said that was “like finishing fifth in the 2019 World Series of Poker Main Event.”

That spot at the final table paid out $2.2 million. He remains bullish on RSI’s place in the market and where the company’s headed after the merger.

“RSI is crushing it,” Hellmuth says. “We are the number one online casino in the USA, and we are completely regulated and legal. Fifty percent of our revenues come from [online] gambling and fifty percent from sports betting, which is a nice balance. Unlike other companies in our space, we are profitable.”

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