Rush Street Hedges with Prediction Market Filings to Preserve ‘Strategic Flexibility’

Rush Street Interactive is preserving prediction markets at arm’s size whereas making certain it has a manner into the sector if the aggressive or regulatory panorama modifications.

During its second-quarter earnings name, the BetRivers dad or mum publicly defined the reasoning behind two pending Commodity Futures Trading Commission (CFTC) purposes filed in May. CEO Richard Schwartz described the purposes as a precaution that would go away RSI ready to reply if situations change, slightly than sign an imminent product launch.

“We do view the purposes as a manner to protect our strategic flexibility, to preserve our optionality … [and] be certain that we’re not caught flat-footed ought to the market or regulatory atmosphere evolve in a manner that turns into related for our enterprise,” Schwartz mentioned. “It’s actually simply being ready and preserving optionality.”

The feedback got here throughout RSI’s first earnings name because the Eventive purposes had been publicly linked to the corporate. Approval of the purposes for designated contract market (DCM) and derivatives clearing group (DCO) may give RSI management of each an alternate and the infrastructure used to clear and settle its contracts.

The filings quantity to a cautious hedge from an organization that claims prediction markets haven’t materially affected its enterprise. While DraftKings, FanDuel and Fanatics have moved into federally regulated occasion contracts, a number of different iGaming and sportsbook operators have remained on the sidelines, warning about regulatory threat and saying they are going to proceed to monitor the market.

RSI strikes past wait-and-see stance

Until just lately, RSI counted itself among the many operators taking a wait-and-see strategy.

During the corporate’s 2025 Q4 earnings call in February, Schwartz famous that sports activities contracts had been driving a lot of the exercise in prediction markets, an space exterior RSI’s major focus.

“Prediction markets immediately are primarily benefiting from sports activities occasion contracts, which isn’t an space of high precedence for us,” Schwartz mentioned.

During the Q&A portion of the decision, Schwartz mentioned RSI had been carefully monitoring the sector and will reply if essential. CFO Kyle Sauers mentioned the corporate had not detected a transparent impact on its sportsbook outcomes.

“It doesn’t seem that it’s hurting our OSB enterprise and deal with, however it’s undoubtedly arduous to measure,” Sauers mentioned.

RSI additionally emphasised its casino-first technique throughout a May 14 Needham investor conference. Schwartz described the assets and a spotlight rivals had been devoting to prediction markets as a distraction that created a possibility for RSI to stay centered on rising its on-line on line casino enterprise. He additionally mentioned the corporate was monitoring the sector and had methods in place to keep away from being caught unprepared if a sexy alternative emerged.

By then, Eventive IV had already submitted its DCO utility. Eventive III filed its DCM utility six days after Schwartz’s remarks.

Regulatory uncertainty makes flexibility beneficial

The Q2 name made express how these filings match into RSI’s technique. In his prepared remarks, Schwartz drew a distinction between the corporate’s present priorities and its purpose for searching for federal approval.

“As we have now said beforehand, we proceed to function with a casino-first focus and don’t intend to lean into the crowded sports-focused prediction market area,” Schwartz mentioned. “However, the prediction markets panorama is very dynamic, and we’ll proceed to monitor developments within the area. This submitting ensures we have now the pliability to navigate all doable outcomes.”

Those outcomes stay unsure. The CFTC is contemplating new rules governing sports and other event contracts, as a rising collection of state and federal lawsuits checks whether or not states can apply their playing legal guidelines to federally regulated exchanges. Some states have sued or taken enforcement motion to prohibit sports activities occasion contracts, prompting the CFTC to file its personal instances asserting unique federal jurisdiction over the markets.

A sturdy federal path may make RSI’s alternate and clearinghouse approvals extra beneficial. Contract restrictions may make a sports-focused launch much less enticing. The purposes enable RSI to put together for both route with out committing to enter the market now.

Other main iGaming operators stay cautious

RSI’s purposes stand out amongst iGaming and sportsbook operators which have remained exterior prediction markets, whilst some report mounting stress from the sector.

BetMGM CEO Adam Greenblatt recognized prediction markets because the “major macro impression” affecting the corporate’s on-line sportsbook throughout its Q2 business update. BetMGM has diminished advertising in some states because it competes with prediction market operators for patrons, however has not introduced plans to enter the sector. Management as a substitute mentioned restrictions on sports activities occasion contracts may return some exercise to licensed sportsbooks.

PENN Entertainment has additionally linked prediction market spending to elevated customer-acquisition prices and potential stress on sportsbook deal with. CEO Jay Snowden mentioned throughout PENN’s first-quarter earnings call that the corporate remained centered on Canada and on-line on line casino enlargement slightly than responding instantly to prediction market competitors.

Caesars has taken a equally cautious place. CEO Tom Reeg mentioned through the firm’s 2025 Q4 earnings call that Caesars didn’t anticipate to take part in prediction markets beneath the present regulatory framework as a result of doing so may put its brick-and-mortar gaming licenses in danger, whereas leaving open the potential for coming into if a path acceptable to state regulators emerges. Caesars didn’t point out prediction markets in its current Q2 earnings launch. Its longer-term place can also be much less sure as a result of the corporate has agreed to be acquired by Fertitta Entertainment, though Caesars mentioned Reeg and the prevailing administration staff are anticipated to stay after the transaction closes.

Bet365 is equally staying away from prediction markets for now. An individual acquainted with bet365’s U.S. strategy told DeFi Rate in June that occasion contracts weren’t presently a part of its plans, though the corporate was persevering with to watch the sector.

Those public positions don’t essentially reveal all the things occurring internally. Operators that say they’re monitoring prediction markets could possibly be creating partnerships, pursuing registrations or making ready different methods that haven’t but surfaced by means of regulatory filings or firm bulletins.

RSI begins with alternate infrastructure

Based on publicly recognized info, RSI is taking a special path from the foremost gaming firms which have already launched prediction market merchandise.

FanDuel entered by means of a three way partnership with CME Group. FanDuel Predicts operates by means of a non-clearing futures fee service provider (FCM) and initially provided contracts listed on CME’s alternate, permitting the corporate to launch the product with out proudly owning a DCM.

Fanatics Markets additionally started as an middleman. Its registered introducing dealer related prospects to contracts listed by Crypto.com’s CDNA alternate. Fanatics is now transferring towards higher management by means of its planned acquisition of Water Street Labs and CX Clearinghouse, which might give it its personal DCM and DCO.

DraftKings Predictions launched by means of a registered introducing dealer, with Wedbush Securities offering FCM companies. It initially provided contracts from CME Group and later added Crypto.com markets. DraftKings had already acquired the CFTC-approved Railbird alternate however continued utilizing exterior exchanges whereas making ready the venue for launch. The firm launched and built-in its proprietary DKeX exchange in June.

Rather than launching first by means of an outdoor alternate, RSI is searching for alternate and clearinghouse approvals earlier than committing to a consumer-facing prediction market product. If the CFTC approves each purposes, it may ultimately launch with management of the alternate that lists its contracts and the clearinghouse that processes them, slightly than relying on third-party market infrastructure.

RSI didn’t reply to DeFi Rate’s request for added remark concerning the Eventive purposes or what could lead on the corporate to launch a prediction market product. We will replace this story if the corporate does reply.

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