NEIL BLUHM:
Well, okay. Hotels are suffering because nobody is traveling. When the pandemic is over, they will do better. I think that its not going
to be a long-term problem particularly for resort hotels. Again, people want to go have some fun and travel. Business hotels may be long-term affected because people will go to less conventions or meetings because they are getting used to using the
internet. Office in major cities is fine, particularly downtown, our buildings in Century City are full of tenants who are paying rent. Residential is also fine, you know, the internet has not impacted residential at all because you cant and
sleep on the internet. However, in the short run, rents are down, vacancies are up in the major cities, particularly New York, San Francisco, to a lesser extent, Chicago and Los Angeles. But that, that is understandable because if youre a
young person and there is no action, theres no bars, theres no restaurants, people arent working around there, you dont want to live there and its expensive, so they moved out, they moved to the suburbs or their
parents. But long-term, that business will be fine.
VONNIE QUINN:
Neil, you know, obviously you must be pretty bullish on the economy cause you are continuing to build casinos and we will get to the
online part of things in a moment, theres a SPAC involved there. But youre still building brick-and-mortar casinos in places like Virginia.
NEIL BLUHM:
Yes, we won the right to do
that, we expect to start construction sometime in the middle of next year. Itll take a year and a half to finish it. We assume that the pandemic will be over by then.
VONNIE QUINN:
Now, this Rush Street
Interactive, tell us why you made the decision to go public via a SPAC given that you have all of this experience anyway, you may not have needed to go that way. Why that way, and what will the proceeds help you to do?
NEIL BLUHM:
Well, we got into this
business some years ago with my two younger partners, Greg Carlin and Richard Schwartz who run the internet business, and we felt that that business was coming and was gonna grow, so we developed our own platform, built up our own team and then when
the states started legalizing it, we got off to a good start. And right now, we are the number one in the market for casinos and number four for internet sport betting. Now when I say casinos, I mean internet casino gambling. They are two different
businesses. Some people can bet on slot machines or on play card games like blackjack. Alternatively, we have sport betting. Many states have started to allow sport betting. Only a few have started to allow the casino games, but the
projections for the casino business are that they will be a larger market ultimately than sport betting. And proof of the pudding is the fact that two of the big states that have both, thats Pennsylvania and New Jersey, the revenue being
produced for the casino far outweighs the revenue being produced by the sport betting.
VONNIE QUINN:
Now Rush Street Interactive will be trading by the end of the year in this, you know, merger with dMY but Im curious, youve already
said that growth of revenue increased 370% in the third quarter over a year ago. How are you doing that given there are competitors out there? Are you keeping costs down? How would you continue this landgrab, if you like, for online gamblers?
NEIL BLUHM:
Well, number one, we have
lots of competitors, especially on the sport betting side. But unlike some of our competitors, were not buying market share, were earning it. We think we have a great product, were very flexible, its our own technology, and
so we have done well. And remember, on the casino side, we come from a casino background rather than daily fantasy sports for example. So we think we have an advantage on the casino side. And, weve just raised our estimate for the year, our
guidance by 20% over where we projected a short time ago. So we should do $265-$275 million in revenue this year, so were feeling very good! One thing I think is important to note: that is that
after our project merger is completed, we will have $230 million of revenue on our balance sheet with no debt. And we started our internet business with $50 million in capital, the majority of which was put up by me and the
rest by my two partners. So we have been able to build this with a relatively small amount of capital, and were very optimistic about where this business is going.