Rush Street Interactive’s BetRivers Sportsbook opened to the public at Rivers Casino in Des Plaines, Ill., on March 9.
Photo: Ashlee Rezin/Chicago Sun-Times/Associated PressRush Street Interactive LP has agreed to go public via a merger with a blank-check company that will value the online sports-and-casino betting company at about $1.8 billion including debt, according to people familiar with the matter.
Chicago-based Rush Street Interactive and special-purpose acquisition company dMY Technology Group Inc. DMYT 4.15% are set to announce their merger as early as Monday, the people said, making them the latest to join the frenzy of special-purpose acquisition company, or SPAC, deal activity.
Blank-check companies like dMY Technology Group raise money by going public and then have a set period, usually two years, to hunt for an acquisition target. dMY Technology Group went public earlier this year. Any SPAC merger is subject to shareholder approval.
Bloomberg reported last week that Rush Street Interactive and dMY Technology Group were in talks.
Rush Street Interactive was founded in 2012 and has grown to be an online-gaming giant. It differs somewhat from competitor DraftKings Inc., DKNG 3.70% which is mainly known for online sports betting. DraftKings also recently chose to go public via a blank-check company.
While Rush Street Interactive operates in only legal and regulated markets, including Illinois, New Jersey and Pennsylvania, as other states open their borders to online casino-and-sports betting it is set to expand into those markets as well. The company also began legal online sports-betting operations in Latin America.
Rush Street Interactive’s revenue is up this year as the coronavirus pandemic has kept people away from traditional casinos and betting facilities and instead led many gamblers to turn to online markets.
Blank-check companies are also enjoying a moment. They have been around for years, but in recent months, bigger, brand-name companies have been tapping them for their initial public offerings as the broader market for new listings has resurged after the coronavirus pandemic initially crimped activity.
Last year, Virgin Galactic, Richard Branson’s space-tourism venture, surprised investors and traders when it agreed to go public through a blank-check company. Earlier this month, health-care-services provider MultiPlan Inc. said it was merging with one in the biggest such deal ever, at $11 billion.
Other companies are sure to follow, as new SPACs are launching at a fast clip. Last week, hedge-fund billionaire William Ackman raised $4 billion in the largest-ever SPAC offering. The goal, according to a regulatory filing, is to use the money to bring a large private company public—potentially a “mature unicorn” valued at billions in the private market.
The Rush Street Interactive deal will be paid for using the blank-check company’s $230 million on hand as well as an additional $160 million from institutional investors that are expected to include Fidelity Investments, the people said.
After the transaction, Rush Street Interactive will continue to be run by Chairman Neil Bluhm, Chief Executive Greg Carlin and President Richard Schwartz, while dMY’s leaders Niccolo de Masi and Harry You will join the board. Rush Street Interactive is expected to have more than $230 million in net cash, which it plans to use to expand further into the online casino-and-sports betting markets, the people said.
Write to Corrie Driebusch at corrie.driebusch@wsj.com and Alexander Osipovich at alexander.osipovich@dowjones.com
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