Rush Street execs celebrate record quarter on success of ‘casino-first’ strategy
On the strength of record-level numbers for their company, Rush Street Interactive executives were in an upbeat mood during their first-quarter earnings call on 28 April.
“Our continued momentum demonstrates the success of our casino-first strategy,” said CEO Richard Schwartz. He called that focus “the fundamental differentiator of our business model.”
“We’re filling the top of the funnel faster,” Schwartz said, referring to a record number of first-time RSI depositors. “We’re doing it more efficiently than ever.”
Not even a new, 16% “emergency” tax on gross gambling revenue in Colombia could dampen the moods of Schwartz and Chief Financial Officer Kyle Sauers. A prior, 19% value-added tax had been found unconstitutional.
Like the VAT, the 16% impost is due to be evaluated by Colombia’s Constitutional Court. However, Schwartz pointed out, RSI paid no additional levies for the first 10 weeks of 2026.
Colombia is facing a presidential election in a matter of weeks, prompting Sauers to say, “we’re watching it very closely. We’re not handicapping it. There’s an opportunity there.”
Mexico “continues to ramp nicely,” the CEO said, with revenues growing more than 100% for each of the past four quarters. Although two online operators recently got kicked out of the country, Schwartz minimized the resultant opportunity, noting that the duo were mainly known for sports betting, not igaming.
To the north, Alberta “represents a significant expansion opportunity,” as reflected in the upgrade earnings guidance that RSI announced. Schwartz noted that Alberta would be complicated by “incumbent gray-market operators.” The competitive landscape would, he said, be like Ontario’s but he expected RSI’s BetRivers to do well.
RSI saw, Sauers said, its fastest revenue growth in more than four years. Marketing costs were up 19% in the first quarter, but were a smaller percentage of revenue than previously. Sauers added the RSI plans to spend more on personnel and technology this year. The company also made no share repurchases in the quarter.
When one Wall Street analyst marveled at the seeming ease of RSI’s success, Sauers had a ready reply.
“I wouldn’t say it’s getting easier,” he mused. “Our teams work really hard and really smartly. We’re acquiring players faster. We’re doing it at lower rates per player” and with what he characterized as meaningful bonusing.
“One of our goals is to create a fun and fair experience,” Schwartz elaborated. He said customer feedback was bearing that out.
The CEO continued that he saw a great deal of “me too” products in the industry, including incentives like free-to-play games.
“What is validating ultimately is the app scores in the store,” Schwartz expanded, saying that BetRivers had some of the highest marks. “We’ve been building this technology since 2012, improving it along the way,” so any success was cumulative.
Schwartz continued, “what’s unique for us is that, from Day One, the number-one goal was to retain customers. When you do little things right, you encourage greater retention. All the touch points where you have interface with the customer matter.”
Sauers projected US$115 million in additional annual revenue, based on greater igaming market share.
“Outsized growth,” he said, “sets us up well for the remainder of the year.” Other factors affecting guidance revisions were that Latin America continued to outperform, sports outcomes were better than anticipated and “modest revenues” were expected from Alberta.
Cash-flow guidance was hiked by US$24 million. This was, Sauers explained, reflective of a lower tax rate in Colombia and the costs associated with the Alberta launch.
RSI’s value per average player, Schwartz added, has come down because its database is diluted by new players “who may not be around” for long. Besides, he said, there we’re still many players” who don’t know what BetRivers is.”
The impending World Cup, Sauers resumed, had some built-in upside from the extra games planned, “so we’re excited by the player acquisition that comes along with it.” Schwartz noted that it was a unique World Cup for BetRivers, in that it was to be played in three countries (US, Canada and Mexico) in which RSI operates.
While Schwartz and Sauers would not discuss potential new jurisdictions in South and Latin America, they were enthusiastic about igaming prospects in Virginia.
“It’s encouraging that the legislation progressed as far as it did,” Schwartz said. The Cavalier State would be “a great opportunity for us.” Sauers added that Virginia is not dissimilar in size to Michigan, where RSI has substantial market share.
Near the end of the call, the subject of prediction markets was raised and Schwartz said he’d seen little cannibalization from them. He added, “we’re searching for different players and searching for them in different places.”
David McKee is an award-winning journalist who has three decades of experience covering the gaming industry.
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The Backstory
Momentum that set up the latest beat
Rush Street Interactive’s latest record quarter caps a string of outperformance that gathered pace through 2025 and into early 2026. The company signaled the trajectory last fall when it posted a third-quarter revenue spike of 20%, lifted cash flow 54% and logged its tenth straight quarter of growth. Management raised full-year guidance then and said gains were broad-based, led by online casino. The tone carried into year-end, when Rush Street blew past expectations with double-digit increases in the fourth quarter and full year, highlighted by a 28% quarterly revenue jump and US$74 million in annual profit.
By late April, the company underscored the durability of that arc, reporting first-quarter growth in revenue and profit, plus a 95% surge in cash flow. Monthly active users climbed in both North America and Latin America, even as the operator kept marketing growth to a minimal increase. The setup coming into the current period was a business skewed to igaming, scaling player counts while keeping acquisition efficient, and building cash to fund new markets without taking on debt.
The logic behind a “casino-first” playbook
Rush Street’s thesis has been consistent: lead with online casino to mute sports-betting volatility and lean on product to sustain retention. That approach was evident during last year’s NFL-heavy fall stretch, when executives told investors at G2E that the company’s lower mix of online sports betting buffered swings in hold, while casino momentum continued to add share and monthly active users. The message, relayed in an Oct. 7 investor note, came alongside commentary that prediction markets’ rise could accelerate igaming legalization as states seek to protect tax bases.
That industrial logic fed financial results. In the third quarter, Rush Street reported accelerating user growth in mature casino markets such as Michigan, New Jersey and Pennsylvania, and said first-time depositors were rising even as promotional intensity stayed rational. The company reiterated the point at year-end, calling out a 51% jump in North American igaming players and strong retention. The through line: a focus on product differentiation, measured bonusing and experience tweaks that increase lifetime value—an operating stance that insulated results from sports-led distortions and supported consistent guidance.
Latin America: fast growth, thorny taxes
The expansion story has leaned heavily on Latin America, where user counts surged across 2025. That lift came despite regulatory headwinds, most notably in Colombia. In mid-2025, management described the impact of a temporary value-added tax on Colombian gaming, which required heavier bonusing and depressed revenue growth even as player counts stayed “super-strong,” according to the third-quarter outlook call. Executives expected profitability to improve once the levy sunset.
By G2E, the team remained constructive on Colombia’s fundamentals and said betting volumes and share were growing. They also flagged Mexico as “growing very nicely,” expected to eventually outstrip Colombia in revenue contribution, while acknowledging the overhang of potential tax hikes. In the G2E readout, management cautioned that higher promotional costs to offset Colombia’s VAT had trimmed as much as US$75 million in revenue and US$20 million in cash flow in 2025, but said a cleaner 2026 comparison would be favorable.
That calculus proved prescient as the company entered 2026 with improving cash dynamics and reiterated that Latin America remained a growth engine. Even with the policy noise—ranging from Colombian tax changes to geopolitical rhetoric—executives framed the region as a long-run opportunity given population scale, rising digital adoption and an ability to localize casino content and marketing.
North American footing and the next openings
Domestically, Rush Street has used a steady-tilt casino strategy to widen its base and prepare for selective market entries. The operator touted an “incredibly strong” Delaware monopoly and stable share in Ontario, while pointing to readiness to launch on day one in Alberta once the market opens. Those markers came through at G2E, where the company also described traction in mature U.S. casino states and disciplined promotions tied to NFL seasonality.
The company’s third-quarter disclosure detailed standout growth rates in Delaware, Michigan, New Jersey and Pennsylvania, with Ontario improving as well. In the current year, executives have also talked up Virginia as a promising igaming prospect given its size and infrastructure similarities to Michigan, a Rush Street stronghold, echoing the view that states with online sports betting could more readily flip the switch to regulated casino.
Marketing discipline, player economics and product cadence
Rush Street has walked a narrow line on customer acquisition: spend enough to widen the funnel, but keep unit economics improving by augmenting product and service. In the first quarter, revenue rose 21% with only a 3% increase in marketing spend, and average revenue per player improved modestly in North America while Latin America’s lower-ARPU scale expanded. Earlier, the company reported that third-quarter sales and marketing expenses dipped slightly even as monthly active users climbed 34% in North America and 30% in Latin America. Those figures, detailed in the third-quarter update, supported the claim that Rush Street was acquiring more players at lower cost per head.
Bonusing remains a lever, especially where tax policy weighs on customer value. Management has acknowledged that heavier activity can accelerate deposit-withdrawal churn, which, in turn, can trigger more bonusing. The pivot, then, has been to emphasize product polish and faster game pipelines to hold customers beyond promotional cycles—an approach executives reiterated while setting 2026 targets and explaining why the company would not chase legally ambiguous prediction markets or sweepstakes models. The emphasis on steady, regulated growth also helps conserve cash for opportunistic share repurchases and market launches.
What’s next: guidance, legalization and competitive pressure
Guidance implies Rush Street expects its casino-led mix to keep generating operating leverage. At year-end, the company projected 2026 revenue of up to US$1.4 billion and cash flow of as much as US$230 million, after finishing 2025 with US$1.1 billion-plus in sales and US$153.7 million in cash flow. Early 2026 results backed that stance as revenue, profit and cash flow all improved year over year, and management kept a firm hand on costs while investing in personnel and technology.
The policy backdrop could accelerate the thesis. Executives have argued that as prediction markets and sweepstakes proliferate, lawmakers may move to legalize igaming to capture taxes and standardize consumer protections. If that happens first in states with existing online sports betting, Rush Street’s technology stack and casino bias would be positioned for a faster ramp. Internationally, watch Colombia’s tax posture and Mexico’s levy path; both will shape near-term margins even as user growth remains strong.
Add in the World Cup’s customer-acquisition bump across the United States, Canada and Mexico, and the stakes are clear. The company’s ability to convert event-driven interest into long-term casino players, while keeping promotions rational and product cadence high, will determine whether today’s record quarter becomes the baseline for the next leg of growth.
