Peru lately legalized iGaming and online sports betting, connexion 5 other Latin American countries inward doing so and that go could have positive degree implications for some US-based gaming companies, including Benjamin Rush Street Interactive (NYSE:RSI).
It’s estimated that online sports betting drives an annual hold of $1 billion inward Peru and with the government’s favorable 12% tax rate, it could follow a compelling market place for operators such as RSI. RSI operates below the BetRivers and PlaySugarHouse brands and is currently uncommitted with nomadic or retail businesses inwards Colorado, Illinois, Indiana, Iowa, Michigan, New Jersey, New York, Pennsylvania, Virginia, and Occident Virginia. Following a nonage investiture inward mobile games developer Boom Entertainment, which was announced lastly August, RSI gained get at to Louisiana, Mississippi, and New Mexico.
As such, the investment biotic community typically views RSI through and through the electron lens of the US marketplace, but analysts say the Latin America chance shouldn’t follow ignored.
This (Peru) could stand for a $30M+ mesh gaming revenue (NGR) opportunity for RSI, which already operates inward capital of South Carolina and Mexico,” wrote Philip Milton Roth Capital analyst Edward VIII Engel inwards a recent note. “Longer-term, we ease trust LatAm offers a $3bn addressable market, which could fruit RSI $120-240M inward NGR if it asserts 5-10% marketplace share. While investors generally overlook RSI’s LatAm exposure, we look to a greater extent interest group as markets such as Federative Republic of Brazil launch.”
He rates RSI caudex a “buy” with an $8 toll target, implying upside of 40% from the July 20 close.
Rush Street Interactive Embracing Latin America
News of Peru’s legitimation of iGaming and sports wagering arrived nigh a calendar week after RSI rolled come out an online gambling casino and sportsbook inward Mexico, making it the number 1 US-based gaming companion to debt inward Latin America’s second-largest economy.
RSI was also the first-class honours degree US-based gaming keep company to launch a legal, regulated online sportsbook in Colombia, South America’s third-largest economy. RushBet.co, the company’s offering inwards Colombia, is already single of the dominant online gaming entities there. It’s estimated that RSI has 20% of the wagering securities industry inwards that country, which Engel says the operator put up duplicate inward Republic of Peru if it’s 1st to market place there.
Solidifying its Latin America footmark could pay dividends for RSI. While rivals in the US are occupied in pricey customer acquisition battles, RSI is adding geographical diversity patch likely not outlay nearly as much to acquire customers inward Latin America as it does in the US.
Colombia, Mexico and Republic of Peru make a combined population of almost 214 jillion people, indicating it’s significantly expanding its add up addressable market place by entering those nations.
Other LatAm Opportunities
By establishing itself inwards the region, RSI could eventually tap into other markets there, including Argentina and Brazil — the latter of which is the diadem precious stone of Latin American gaming.
“Argentina is legalizing iGaming province-by-province, where its ii largest provinces already legalized (covering 41% of the 46M population),” adds Roth’s Engel. “In Brazil, OSB/iGaming has also been legalized, but regulatory implementation has been slow. While an manufacture launch by YE2022 still seems feasible, we’d anticipate the securities industry to mirror Canada/Ontario where greyness market place operators keep leading market share.”
The analyst also notes RSI shares are inexpensive relative to competitors and that the operator has a penchant for outperforming securities industry percentage expectations.