RUSH STREET INTERACTIVE: MARKET ENTRY DECISION IN ONLINE
SPORTS BETTING CASE STUDY SOLUTION
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pl
SYNOPSIS
m
Sa
In early 2022, the online sports betting market was opening in Ontario, Canada, and Rush Street Interactive
(RSI), an online and offline gaming company based in Chicago and already operating in the gaming space in
a number of US states and the country of Colombia, had to decide about its next move. RSI had so far focused
its growth strategy on being a first mover in new markets, and several of its gaming competitors had already
n
indicated their intentions to enter the newly opened online casinos and online sports betting market in Ontario.
Should RSI take the opportunity to enter the Ontario online sports betting market or take advantage of its first-
tio
mover advantage in US jurisdictions such as Tennessee, West Virginia, and Massachusetts?
lu
So
OBJECTIVES
• Explain the role of government and external agencies in the opening of new markets. (Assignment Question 1.)
• Identify the competitive characteristics of an emerging industry. (Assignment Question 2.)
• Describe how companies can compete in regulated markets. (Assignment Question 3.)
• Analyze strategic alternatives available to a company. (Assignment Question 4.)
The Case Solution Starts From page 6
,ASSIGNMENT QUESTIONS
1. How has the gaming market changed in Ontario in the past 20 years? What roles do federal and
provincial governments and regulators play in this industry?
e
2. Analyze the newly emerging online sports betting industry in Ontario. What key success factors are
pl
necessary to be successful in this industry? Is this an attractive industry to be in? What key
macroeconomic trends will influence the success of participants in the industry?
3. What is RSI’s strategy? Is it working? Does the company have a sustainable competitive advantage it
m
could use if it entered the emerging online sports betting market in Ontario?
4. RSI has a choice to make in terms of its next strategic step from a geographic market entry perspective.
Sa
Analyze the four potential markets—Ontario, Tennessee, West Virginia, and Massachusetts—and
recommend to the CEO which market RSI should choose as its next target.
n
tio
lu
So
The Case Solution Starts From page 6
,3. What is RSI’s strategy? Is it working? Does the company have a sustainable competitive
advantage it could use if it entered the emerging online sports betting market in Ontario?
As noted in the case, RSI is an ambitious company with a defined gaming presence in 13 US states as well
as the country of Colombia. The company feels its competitive advantages are its ability to be quick to
market (demonstrated through its successful entry into a number of US states) and its creation of
partnerships with existing casino operators that are already established in the states it wishes to enter.
Based on an analysis of internal resources, while RSI has a number of resources and organizational
capabilities, it does not look like it has any that could create a sustainable, long-term competitive advantage
that is unique. All of RSI’s key rivals (e.g., DraftKings, BetMGM, FanDuel) have also expanded into multiple
jurisdictions, and in some cases, they have a stronger brand presence than RSI. This is a hard industry in which
e
to differentiate: any unique scenarios for online sports betting could be quickly replicated by the competition;
there are many possibilities to engage spokespeople (either former or existing athletes) from the various
pl
professional sports teams; and tools on online platforms can be reverse-engineered by other companies.
m
In the gaming industry, particularly the online casino and sports betting segments, marketing is key. Given
Sa
n
tio
lu
So
The Case Solution Starts From page 6
, EXHIBIT -2: ANALYSIS OF MARKET ENTRY OPTIONS FOR RSI
Market Population Potential Professional sports teams Estimated Is RSI currently Would RSI be first
revenue tax rate operating there in to market?
(total sports online casinos or
betting, or social gaming?
GGR)
Ontario 14.8 million CA$1.26 Toronto Raptors (NBA), 10–15% Yes: social gaming Yes: sports betting is
–
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billion Toronto Maple Leafs (NHL), not currently
CA$2.42 Ottawa Senators (NHL), legalized.
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billion Toronto Blue Jays (MLB),
Toronto FC (MLS), Toronto
Argonauts (CFL)
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Tennessee
Sa
n
tio
lu
So
The Case Solution Starts From page 6
, EXHIBIT -5: PEST ANALYSIS OF ONTARIO ONLINE SPORTS BETTING INDUSTRY
Political Factors (Extremely Important)
• The Ontario government has authority over market opening, market operations (through iGaming
•
•
Economic Factors
• Significant market growth is predicted.
•
•
•
e
•
pl
Social-Cultural Factors
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• There is a social stigma related to gambling.
•
•
Sa
•
Technological Factors (Extremely Important)
• Because the entire system is hosted online, the following issues will be important:
n
o server capacity
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tio
o
o
o
lu
o
o
So
The Case Solution Starts From page 6
SPORTS BETTING CASE STUDY SOLUTION
e
pl
SYNOPSIS
m
Sa
In early 2022, the online sports betting market was opening in Ontario, Canada, and Rush Street Interactive
(RSI), an online and offline gaming company based in Chicago and already operating in the gaming space in
a number of US states and the country of Colombia, had to decide about its next move. RSI had so far focused
its growth strategy on being a first mover in new markets, and several of its gaming competitors had already
n
indicated their intentions to enter the newly opened online casinos and online sports betting market in Ontario.
Should RSI take the opportunity to enter the Ontario online sports betting market or take advantage of its first-
tio
mover advantage in US jurisdictions such as Tennessee, West Virginia, and Massachusetts?
lu
So
OBJECTIVES
• Explain the role of government and external agencies in the opening of new markets. (Assignment Question 1.)
• Identify the competitive characteristics of an emerging industry. (Assignment Question 2.)
• Describe how companies can compete in regulated markets. (Assignment Question 3.)
• Analyze strategic alternatives available to a company. (Assignment Question 4.)
The Case Solution Starts From page 6
,ASSIGNMENT QUESTIONS
1. How has the gaming market changed in Ontario in the past 20 years? What roles do federal and
provincial governments and regulators play in this industry?
e
2. Analyze the newly emerging online sports betting industry in Ontario. What key success factors are
pl
necessary to be successful in this industry? Is this an attractive industry to be in? What key
macroeconomic trends will influence the success of participants in the industry?
3. What is RSI’s strategy? Is it working? Does the company have a sustainable competitive advantage it
m
could use if it entered the emerging online sports betting market in Ontario?
4. RSI has a choice to make in terms of its next strategic step from a geographic market entry perspective.
Sa
Analyze the four potential markets—Ontario, Tennessee, West Virginia, and Massachusetts—and
recommend to the CEO which market RSI should choose as its next target.
n
tio
lu
So
The Case Solution Starts From page 6
,3. What is RSI’s strategy? Is it working? Does the company have a sustainable competitive
advantage it could use if it entered the emerging online sports betting market in Ontario?
As noted in the case, RSI is an ambitious company with a defined gaming presence in 13 US states as well
as the country of Colombia. The company feels its competitive advantages are its ability to be quick to
market (demonstrated through its successful entry into a number of US states) and its creation of
partnerships with existing casino operators that are already established in the states it wishes to enter.
Based on an analysis of internal resources, while RSI has a number of resources and organizational
capabilities, it does not look like it has any that could create a sustainable, long-term competitive advantage
that is unique. All of RSI’s key rivals (e.g., DraftKings, BetMGM, FanDuel) have also expanded into multiple
jurisdictions, and in some cases, they have a stronger brand presence than RSI. This is a hard industry in which
e
to differentiate: any unique scenarios for online sports betting could be quickly replicated by the competition;
there are many possibilities to engage spokespeople (either former or existing athletes) from the various
pl
professional sports teams; and tools on online platforms can be reverse-engineered by other companies.
m
In the gaming industry, particularly the online casino and sports betting segments, marketing is key. Given
Sa
n
tio
lu
So
The Case Solution Starts From page 6
, EXHIBIT -2: ANALYSIS OF MARKET ENTRY OPTIONS FOR RSI
Market Population Potential Professional sports teams Estimated Is RSI currently Would RSI be first
revenue tax rate operating there in to market?
(total sports online casinos or
betting, or social gaming?
GGR)
Ontario 14.8 million CA$1.26 Toronto Raptors (NBA), 10–15% Yes: social gaming Yes: sports betting is
–
e
billion Toronto Maple Leafs (NHL), not currently
CA$2.42 Ottawa Senators (NHL), legalized.
pl
billion Toronto Blue Jays (MLB),
Toronto FC (MLS), Toronto
Argonauts (CFL)
m
Tennessee
Sa
n
tio
lu
So
The Case Solution Starts From page 6
, EXHIBIT -5: PEST ANALYSIS OF ONTARIO ONLINE SPORTS BETTING INDUSTRY
Political Factors (Extremely Important)
• The Ontario government has authority over market opening, market operations (through iGaming
•
•
Economic Factors
• Significant market growth is predicted.
•
•
•
e
•
pl
Social-Cultural Factors
m
• There is a social stigma related to gambling.
•
•
Sa
•
Technological Factors (Extremely Important)
• Because the entire system is hosted online, the following issues will be important:
n
o server capacity
o
tio
o
o
o
lu
o
o
So
The Case Solution Starts From page 6
