Rush Street execs downplay prediction markets during earnings call
The second quarter of 2026 saw Rush Street Interactive’s (RSI) fastest revenue growth in over four years. That was according to CEO Richard Schwartz, leading off a 29 July earnings call.
Schwartz lauded the recent World Cup, saying it was something “long-planned and strongly received” for RSI. It was characterized by “very successful outcomes,” Schwartz said, with 25% cross sell into igaming by first-time Latin American customers. “Handle and hold came in very nicely,” including a best-ever performance in Colombia, noted the CEO.
It was too early, though, for CFO Kyle Sauers to forecast customer retention as the World Cup recedes. Some customers “will be joining just for the cultural moment,” he observed.
Pressed for analogies, Sauers responded that “It’s challenging to have a great comparable to this event.” In North America, he said, RSI used the World Cup to get players engaged across its platform, whereas in Latin America it was more of a player-acquisition opportunity.
Executives indicated that strong World Cup hold added US$10 million to RSI’s quarter. They expected the third quarter to be flat in comparison to the second, followed by what Sauers calls “a nice uptick” heading into the fourth quarter of 2026.
Sauers said he was hoping players acquired during the World Cup would propel RSI through some tough upcoming comparisons in 2027. The CFO indicated he wasn’t expecting significant growth in North America but has higher hopes for Latin America.
Without elaborating on Latin American expansion, the CFO noted that “We’re very thorough here,” and that RSI would have to be thoughtful about approaching new jurisdictions.
Speaking of Colombia, Schwartz hailed a “pro-business agenda” from the incoming, right-wing government, calling it “a stark contrast” to its liberal predecessor. Even so, RSI was assuming that a 16% special tax on gross gaming revenue would run through the end of 2026.
Given the removal of a value-added tax (VAT) imposed by Colombia, Sauers remarked that the company had seen a US$7 million first-quarter benefit, but that the remaining three quarters of 2026 would not see a similar lift, given the recent Colombian gambling-revenue levy.
Looking to Canada, Alberta is “still very early days,” said Schwartz, highlighting that the outlook is encouraging. “We expect this to be a gradual build,” the CEO noted, indicating it was already tracking ahead of Ontario.
Prediction market move downplayed
While RSI had applied to the Commodity Futures Trading Commission for a prediction-market license, Schwartz downplayed this somewhat. “We do not intend to lean into the crowded prediction-market sports betting market place,” he explained.
Schwartz said that the CFTC application was made “to make sure that we’re not caught flat-footed, should the market evolve.” Sauers added that he didn’t see an adverse prediction-market impact on business in what was already a very competitive marketplace.
To that end, Schwartz said RSI wasn’t catering to sharp bettors, who may have been gravitating to prediction markets instead. They might find event contracts more appealing, he opined.
“Market efficiency continues to be a key component of our success,” Sauers said, noting that customer-acquisition costs were now “attractive.” He said he expected a higher marketing spend in the second half of the year.
“It makes sense to push harder,” Sauers elaborated. “The player values are really good.” Also, RSI would not just be pushing in Alberta but also in other markets, with a US$7 million to US$10 million spike in marketing planned for the third quarter.
What’s next?
Asked how he would increase shareholder value, Schwartz indicated that RSI would concentrate on untapped North American markets, representing 88% of the population, with a view to Latin America. He said RSI would also strive to raise awareness in existing markets.
Queried about whether RSI would bring its Rush brand north from Latin America, Schwartz said it had been discussed and that every operator should pursue a multi-brand strategy. He added that Rush Bet might better enable RSI to cater to Spanish-speaking United States bettors.
“Each new online-casino market is meaningful to us,” Schwarz elaborated, saying he was staying optimistic about further igaming legalization. The executive stressed that individual states would be feeling the pinch of less federal support, especially beginning October and especially in the real of social services: “It’s a good time to have momentum being built” for further igaming legalization, he indicated.
Rush Street ended the quarter with US$340 million in cash on hand and no debt. Its board of directors also authorized a new, US$100 million share-repurchase plan.
David McKee is an award-winning journalist who has three decades of experience covering the gaming industry.
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The Backstory
Casino-first strategy shaped the response
Rush Street Interactive’s guarded posture toward prediction markets reflects a broader strategy the company has been emphasizing for several quarters: online casino first, sports betting second. That positioning has mattered as event-contract platforms have drawn attention from investors, regulators and operators looking for new ways to reach sports bettors. For Rush Street, executives have repeatedly argued that the company’s economics are anchored in igaming customers, who tend to retain better and generate higher lifetime value than sports-first players.
The foundation for that message was laid earlier this year, when Chief Executive Richard Schwartz described the company’s casino-first strategy as the core differentiator behind record first-quarter metrics. He and Chief Financial Officer Kyle Sauers said Rush Street was adding first-time depositors more efficiently, benefiting from technology developed over more than a decade and focusing on retention rather than relying heavily on short-term promotions. That argument now frames the company’s reluctance to pursue prediction markets aggressively. If the business model is built around online casino retention, a crowded sports-event contract market offers less obvious upside.
The company’s quarterly results have reinforced that stance. In prior calls, Rush Street pointed to broad igaming strength in North America, growth in Latin America and a balance sheet with no debt. That combination has given management room to be selective, rather than chase every emerging product category. It also explains why the company can file with the Commodity Futures Trading Commission as a defensive step while telling investors it does not plan to lean into prediction markets unless the opportunity becomes clearer.
Event contracts became a recurring investor test
Prediction markets have become a standing question on Rush Street earnings calls as analysts try to assess whether event contracts could siphon sports betting handle or force traditional operators into a parallel market. The company’s answer has evolved from curiosity to caution. In an earlier call, Schwartz said Rush Street was educating itself on the opportunity and would consider it if conditions became attractive, but he did not describe prediction markets as central to the business.
By the fourth-quarter discussion, the message had become firmer. Executives said Rush Street would refrain from prediction markets for the time being, noting that the activity was primarily tied to sports betting, which was not the company’s priority. Sauers said it was hard to determine cannibalization but that prediction markets did not appear to be hurting Rush Street’s online sports betting business. Schwartz added that many prediction-market platforms lacked the technological sophistication of established gaming operators, while also warning that the legal status of the category remained unsettled.
That restraint became more explicit in the third quarter, when Schwartz said the company was not going to be a pioneer or push regulatory limits. He told analysts Rush Street was monitoring the area closely but was focused on sustainable growth, a comment that linked legal caution with capital discipline. The company also saw potential indirect upside: If prediction markets reduce state tax revenue from traditional sports betting, legislatures may have more reason to consider regulated igaming, where Rush Street has stronger economics.
Latin America supplied growth and volatility
Rush Street’s current confidence is also tied to Latin America, where the company has used major sporting events and igaming cross-sell to expand its customer base. The World Cup produced a meaningful boost in the latest quarter, especially in Colombia, and management said first-time Latin American sports bettors moved into igaming at a notable rate. That performance fits a longer pattern in which Colombia and Mexico have provided both upside and policy risk.
Earlier results showed the opportunity. Rush Street reported that international revenue rose sharply in Mexico and Colombia even as Colombia imposed a value-added tax that the company absorbed through higher bonusing. In that period, Schwartz said Mexico was growing quickly and could eventually become larger than Colombia, while Peru remained a market where the company was still refining the customer experience before accelerating marketing. Those comments in a quarter marked by adverse sports results showed how Latin America could offset volatility elsewhere.
The same markets have also tested the company’s ability to manage regulation. Colombia’s 19% value-added tax, later followed by a 16% special tax on gross gaming revenue, forced Rush Street to adjust bonus spending, marketing and financial guidance. In one update, Sauers said Colombian gaming revenue had declined 27%, though player-count growth remained strong. The company was absorbing the tax burden to defend customer relationships, a strategy that hurt short-term margins but was designed to preserve market share.
The political backdrop has been fluid. Rush Street previously said Colombia’s tax situation depended on courts, Congress and elections. In the latest quarter, management pointed to a more business-friendly incoming government while still assuming the 16% levy would remain through the end of 2026. That conservative assumption illustrates how Latin America has become central to growth but difficult to forecast. It also strengthens management’s preference for known, regulated markets over unsettled prediction-market structures.
North American expansion remains the main prize
Rush Street’s skepticism toward prediction markets does not mean it lacks growth ambitions. Management has consistently pointed to North American igaming legalization as the largest potential catalyst. The company has argued that states facing tighter budgets, federal funding pressures and competition from gray-market or sweepstakes products may eventually embrace regulated online casino gaming as a tax source.
That theme was prominent after the company’s 2024 results, when Schwartz said igaming prospects were better than ever because states needed revenue and online casino activity was already occurring in unregulated forms. He described sweepstakes-style games as an accelerant for legalization because they resemble regulated online casino products without the same oversight or tax contributions. That argument has since become part of Rush Street’s broader policy message: legal igaming can protect consumers, generate state revenue and move existing activity into regulated channels.
Alberta has been another recurring focus. Rush Street has described the Canadian province as an attractive expansion market, albeit one expected to build gradually and contend with gray-market incumbents. Earlier, executives said Alberta could resemble Ontario competitively but believed BetRivers would perform well. In the latest quarter, Schwartz said early performance was tracking ahead of Ontario, while Sauers said marketing would rise as the company invests in Alberta and other markets.
In the U.S., Rush Street has cited Virginia, Maine and other prospective jurisdictions as meaningful opportunities. Management has emphasized that each new online casino market matters because the company is not dependent solely on sports betting scale. That is why prediction markets, despite investor attention, sit below state-by-state igaming expansion in the company’s hierarchy of priorities.
Capital discipline underpins the caution
Rush Street’s balance sheet gives management flexibility but also raises questions about capital deployment. The company has repeatedly ended quarters with substantial cash and no debt. It has bought back shares at times, including a 500,000-share repurchase earlier, but executives have also said buybacks are opportunistic rather than automatic. That approach continued as the board authorized a new US$100 million share-repurchase plan while management discussed higher marketing spending in the second half of 2026.
The company’s third-quarter outlook captured the same balance of ambition and restraint. In that period, Rush Street saw upside across markets despite Colombian pressure, with strong growth in Delaware, Michigan, New Jersey, Pennsylvania, Ontario and Latin America. Schwartz said the company’s domestic igaming player value and retention were at their highest levels, while Sauers kept dry powder available for new-market openings and other contingencies.
That history helps explain the latest message. Rush Street wants investors to see the CFTC filing as optionality, not a strategic pivot. The company is prepared to avoid being caught flat-footed if prediction markets evolve, but it is not signaling a race into a legally contested, sports-led product category. Its current priorities are more familiar: convert sports customers into igaming players, use major events to acquire customers efficiently, defend Latin American share through tax volatility, spend into markets where returns justify it and push for broader igaming legalization.
The stakes are significant because Rush Street is trying to sustain outsized growth while avoiding the missteps that can come with chasing new verticals too quickly. Prediction markets may yet become a regulated opportunity for gaming companies, but Rush Street’s backstory suggests management will wait for clearer rules, better economics and a stronger fit with its casino-first model before making them central to the business.
