A Bet on Online Betting: Our Top Gambling Stock

Online gambling stocks have earned a mixed reputation. Many early players chased growth at any cost, spent aggressively on promotions, and struggled to convert rapid user growth into sustainable profits. As a result, investors often lump the entire sector into the “too risky” bucket.

Indeed, two of the better-known names in the space, Draftkings (NASDAQ: DKNG) and Flutter (NYSE: FLUT) are both Cs or Holds according to our Zen Ratings system. 

But not all operators are the same. Specifically, I’m interested in the strongest-rated gambling name in our system right now. 

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This stock stands out as one of the more disciplined players in online casino and sports betting … focused less on flashy expansion and more on building profitable, long-lived markets.

AND it happens to be one of the highest-rated stocks we track, with rock-solid fundamentals. 

That ticker is…

Rush Street Interactive (NYSE: RSI). 

Let’s take a look at why, starting with the technicals.

The chart looks like this stock is carving out a large base (yellow) for an eventual cup-and-handle type breakout: 

Beyond chart patterns, here’s why I’m keeping an eye on this one:

Built for Regulated Growth

RSI operates online casino and sportsbook platforms across multiple U.S. states and international markets. The long-term opportunity is straightforward: as more jurisdictions legalize and regulate online gaming, operators with licensing experience, compliance infrastructure, and localized platforms gain access to entirely new revenue streams.

Unlike land-based casinos, digital gaming scales efficiently. Once a platform is built and licensed, incremental users come at far lower cost. The key is surviving the early years of market entry (when customer acquisition costs are highest) and reaching the point where mature markets generate steady, recurring cash flow.

That’s where RSI’s strategy begins to matter.

A Focus on Economics, Not Just Growth

Rather than spending indiscriminately to chase market share, Rush Street Interactive has emphasized unit economics: prioritizing markets where it sees a clear path to profitability. As states mature, marketing intensity declines, retention improves, and fixed platform costs are spread across a larger revenue base.

This creates operating leverage: once a market reaches scale, incremental revenue drops more meaningfully to the bottom line.

RSI’s progress in improving margins and reducing reliance on promotional spending suggests the business is transitioning from a “land grab” phase to a more sustainable operating model.

It’s also showing up in our Component Grades for RSI, where the stock is scoring an A in Financials for strong cost reduction, return on equity (ROE), and more. 

As you may know, Financials is one of our favorite Components for a reason.

To see how RSI is scoring on other Components, click here.

That said, RSI is no slouch when it comes to growth either. It’s currently scoring an A for Growth, while its peers DKNG and FLUT are only scoring a B. This is why I’m essentially thinking of the stock as a smaller-cap play on the same sector, but with better Growth, Financials, and more. 

International Exposure Adds Optionality

Another underappreciated part of the RSI story is its international footprint, particularly in Latin America. These markets often feature faster user growth, less saturated competition, and improving regulatory clarity.

International operations provide diversification away from the U.S. regulatory cycle and offer additional long-term upside if digital gaming adoption continues globally. For investors, that optionality matters, especially compared to peers focused almost entirely on a handful of U.S. states.

The Takeaway for RSI Stock

RSI offers exposure to the long-term shift toward regulated online gaming, with improving scale economics, geographic diversification, and a management team focused on profitability rather than vanity metrics. It’s not a household name like Fanduel or Draftkings … but if you dig below the surface, many of the numbers and metrics look superior. 

If the company keeps moving in that direction, the gap between how the stock is perceived and how the business actually performs could narrow … creating upside for patient investors willing to look past the sector’s reputation.

Click here to add RSI to your watchlist. 

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