Phil Hellmuth Divests RSI Shares Amid Affiliate Program Controversy

Phil Hellmuth, a celebrated figure in the poker world, recently announced that he has sold his entire stake in Rush Street Interactive (RSI). This decision comes on the heels of the company’s controversial move to discontinue its affiliate program across multiple states, a move that has stirred discontent within the gaming community.

Phil Hellmuth Sells RSI Shares, Citing Overvalued Market Despite Confidence in Company

Hellmuth, renowned for his 17 World Series of Poker (WSOP) bracelets, shared his decision via a post on X (formerly Twitter). He emphasized that his actions were not a piece of investment advice. Hellmuth cited concerns over broader economic conditions and the current market valuations as his primary reasons for the sale.

Hellmuth mentioned that he had sold all his 165,000 shares in RSI at $10 each. Despite maintaining faith in RSI, he expressed that he believed the S&P 500 appeared overvalued.

Hellmuth initially invested $300,000 in dMY Technology Group Inc., a special purpose acquisition company (SPAC) that merged with RSI in 2020, allowing the gaming company to go public. His sale at $10 per share translated to a substantial $1.65 million, marking a significant return on his investment.

While Hellmuth’s exit from RSI yielded impressive returns, some speculate he may have left money on the table. RSI has been subject to takeover rumors, which could potentially drive the stock price higher. Additionally, RSI’s financial performance has been robust, with significant increases in revenue and earnings before interest, taxes, depreciation, and amortization (EBITDA).

RSI Reports Strong Q1 2024 with Revenue Up 34% and Net Loss Reduced to $2.2M

RSI reported significant Q1 2024 financial improvements, including a 34% increase in revenue to $217 million and a reduction in net loss from $24.5 million to $2.2 million year-on-year. Adjusted EBITDA rose to $17.1 million from a loss of $8.7 million. 

Advertising expenses decreased, and monthly active users grew by 20% in the US and Canada, and by 72% in Latin America. CEO Richard Schwartz expressed satisfaction with these record results, highlighting the company’s dedication to product quality and customer experience. RSI also announced plans to expand into new markets and continue developing proprietary content.

Additionally, RSI’s decision to end its affiliate program also contributed to Hellmuth’s divestment timing. Affiliates in states such as Arizona, Colorado, Illinois, Indiana, Louisiana, Maryland, Ohio, and Virginia received notifications that the program would cease on August 31. Affiliates were instructed to remove all RSI advertisements and tracking links by this date, though no explanation was provided for the termination.