Rush Street Interactive, Inc.

Good day, ladies and gentlemen. Thank you for standing by. Welcome to the RSI fourth quarter 2020 earnings conference call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. Please note that this conference call is being recorded today, March 10th, 2021. I will now turn the call over to Kyle Sowers, Chief Financial Officer.

Thank you, Operator, and good afternoon. By now, everyone should have access to our fourth quarter 2020 earnings release. It can be found under the heading financials quarterly results in the investor section of the RSI website at ruststreetinteractive.com. Some of our comments will be forward-looking statements within the meaning of the federal securities laws. Forward-looking statements are not statements of historical facts and are usually identified by the use of words such as will, expect, should, or other similar phrases are subject to numerous risks and uncertainties that could cause actual results to differ materially from what we expect. We assume no responsibility for updating any forward-looking statements. Therefore, you should exercise caution in interpreting and relying on them. We refer you to our SEC filings for a more detailed discussion of the risks that could impact our future operating results and financial condition. During the call, we will discuss our non-GAAP measures, which we believe can be useful in evaluating the company's operating performance. These measures should not be considered in isolation or as a substitute for our financial results prepared in accordance with GAAP. A reconciliation of these measures to the most directly comparable gap measure is available in our fourth quarter 2020 earnings release, which is available on the investors section of RSI website at rustreetinteractive.com. On the call today, we have Greg Carlin, Chief Executive Officer, and Richard Schwartz, President. We will first provide some opening remarks and then open the call for questions. With that, I'll turn the call over to Greg.

Thanks, Kyle, and good afternoon, everyone. Welcome to our first official earnings call as a public company. Before we start, I would like to thank RSI's incredible team and all of our owners and shareholders whose support has been critical to our transition from private to public company. 2020 was a monumental year for RSI, and 2021 is off to a very strong start. Both RSI and the online gaming industry experienced significant growth in 2020, and we don't see that trend ending anytime soon. With the success of online gaming in markets where it's been legalized and with state governments looking for new revenue sources, online casino and online sports betting remain front and center during 2021 state legislative sessions. While more states have legalized sports betting than online casino, online casino generates more revenue than sports betting, and we anticipate that many states that have legalized sports betting will consider legalizing online casinos as well, similar to West Virginia. Our experience in New Jersey and Pennsylvania is that the online casino vertical is significantly larger and more profitable than the sports betting vertical. In fact, during 2020, online casino generated three times the revenue of online sports betting in those two states. In 2020, RSI was the second largest online casino company in the United States, according to Ehlers & Kretschig. Our goal is to remain a leader in the online casino market, and our business model, including our platform design and our approach to marketing, is driven first and foremost by our deep understanding of casino customers. During 2020, we grew total revenue by 337% to $278 million. We achieved that growth as a private company with modest capital and with a small advertising and promotion expense of $56.5 million. Fourth quarter revenue alone was $100 million, up 28 sequentially quarter over quarter. It also marks the eighth consecutive quarter of sequential revenue growth for Rush Street Interactive. One of the metrics I follow is our average revenue per monthly active user in the U.S., This was $328 during the fourth quarter and $341 for the full year, up 73% and 53% for the fourth quarter and full year. At all times, we're focused on driving strong unit economics, and we expect further upside long-term as we continue to improve our product offering and fine-tune our marketing strategy. RSI ended 2020 with over $250 million of cash on hand, and if all of our warrants are exercised, our cash will increase by an additional $132 million, giving us significant balance sheet flexibility. We believe we have industry-leading customer acquisition costs and fast payback rates, and we plan to increase marketing spend aggressively in 2021 to take advantage of this. In New Jersey, for example, arguably the most competitive online gaming state, we have seen cohorts pay back for marketing spend in approximately six months. Based on this success, we expect our marketing investments will drive meaningful revenue growth and long-term value by accelerating market share gains in all of our markets. I will now discuss our market entry momentum. Today, we operate online gaming in nine jurisdictions, up from four jurisdictions at the start of 2020. Last year, we launched online sports betting in Illinois, Colorado, and Iowa. And in January of this year, we launched both online casino and online sports betting in Michigan and online sports betting in Virginia. We are planning to launch an online casino in West Virginia in the second quarter. In addition, we recently announced agreement for market access in Ohio, Maryland, and Missouri, subject to license availability, state law, and regulatory approvals. Our business development team is hard at work on potential market access opportunities across North and South America. In total, we operate today in states representing 21% of the U.S. population, and with our announced market access deals, we can reach more than 35% of the U.S. population. Before going live in new markets, we've begun to use our social casino, which is built on the same platform as our real money gaming platform as an acquisition tool. This allows us to promote our brand and cost-effectively acquire potential real money customers prior to real money gaming going live in a market. In addition, we've demonstrated the ability to launch quickly in new markets because of our proprietary technology stack, as well as our strong operations team. We launched on the first day in Michigan and Colorado, and we were first to launch in Illinois and Indiana. In 2021 and beyond, we expect to continue to improve our technology stack and expand our player base. We are far along and excited about the next upgrade cycle to our iPhone sports betting app and the launch of our Android app in the Google Play Store. My colleague Richard Schwartz will describe this later on the call. I will now share our guidance for 2021, which we are increasing substantially today. We expect full year 2021 revenues to be between $420 million and $460 million. This is up from our prior guidance of $320 million and at the midpoint represents growth of approximately 58% year-over-year. This increase reflects our strong Q4 2020 results and anticipated growth in recently opened and existing markets, plus the ability to increase investment in what we expect to be highly accretive marketing spend. With our New York Stock Exchange listing and the resulting increase in cash on our balance sheet, We believe we are well positioned to take advantage of the substantial market opportunity in front of us. We remain focused on growing our existing markets, securing access to new markets, improving our technology stack, and analyzing potential acquisitions. We are excited about the future and the potential upside from investing aggressively in market share gains. We believe our growth curve is just getting started and look forward to executing our plans with confidence. I now turn the call over to our president, Richard Schwartz, who will describe our operating metrics in more detail.