Rush Street Interactive sees upside across the board in third-quarter outlook
Military threats by the US toward Colombia don’t dampen Rush Street Interactive’s interest in the region, according to Chief Executive Richard Schwartz. The topic was broached at the end of Rush Street’s third-quarter earnings call.
“There’s lots of opportunity and there is a very large population,” Schwartz said of Latin and South Americas. “Anything is possible these days, anywhere in the world. We’re excited for the future. We’ve been a great citizen down there and very respected.”
The reference to Trump administration talk regarding a key Rush Street territory was a rare dark spot in a largely upbeat call. Schwartz and President/Chief Financial Officer Kyle Sauers, in the first earnings call of his presidency, laid out a variety of positive metrics, offset only by a 27% drop in Colombian gambling revenues.
Even that cloud had a silver lining, as “the player-count growth was still super-strong,” said Sauers. Rush Street Interactive has been absorbing the effect of a double-digit, value-added tax, imposed this year by the Colombian administration. The company’s response has been to offer more player bonuses to offset the pain of the tax.
That brings its own complications. Sauers explained that heavy betting activity had accelerated the churn of deposits and withdrawals, “which creates more bonusing.” Life after the VAT, he continued, “wouldn’t be great for GGR” but would improve profitability.
The tax is expected to sunset at the end of the year, unless the Colombian congress votes to extend it, an outcome Rush Street thought unlikely. “The president remains unpopular,” Schwartz said, “and his party does.”
Another market in which Rush Street faces tax complications is Mexico. Although the company did not anticipate an increased levy this year, Sauers said it looks likely that its tax rate will rise from 30% to 50%.
Domestically, Schwartz said Rush Street’s player value and retention for igaming were at their highest level. The third quarter saw steep revenue in a number of key RSI markets: 74% in Delaware, 48% in Michigan – the highest growth since the first quarter of 2022 – 37% in New Jersey, 15% in Pennsylvania and 24% in Ontario.
Latin American revenue spurted 50% higher in August and September. This, Schwartz said, showed that growth was not tied to major sporting events.
Inevitably, the subject of prediction markets arose. Schwartz said Rush Street Interactive sees less risk to it, being heavily focused on igaming, than sports betting operators do. He also perceived an upside, in that related losses of tax revenues to the event-contract market would spur more states to legalize igaming.
Schwartz was pressed on whether Rush Street Interactive was in or out of the prediction-market game. He reiterated that the company was monitoring the situation closely, but “where it comes to the prediction markets, the legality of it is still being debated.”
The core business of Rush Street Interactive, he said, was to deliver sustainable growth, which didn’t square with dabbling in prediction markets. “We’re not going to be a pioneer, Don’t expect us to be pushing any limits,” Schwartz said, citing regulatory concerns.
Schwartz was more critical of sweepstakes gambling but saw this, too, as a lever for increasing the score of regulated igaming. “The sweepstakes proliferation strengthens the case,” he said.
The ex-president explained his stepping away from the role as being part of a desire to concentrate on bringing more states into the igaming fold. Schwartz said he would be working with other companies to improve messaging and how the industry lobbies for igaming.
Schwartz said he also would be collaborating with Rush Street Interactive’s chief technology officer to improve the player experience, “which has been the source of a lot of our success. We need to do more of that,” including speeding up the new-game pipeline.
Rush Street Interactive finished the third quarter with $273 million and no debt. This prompted one Wall Street analyst to ask why no third-quarter stock repurchases had been made. Sauers replied that he thinks of stock repurchases as opportunistic rather than programmatic and he would like to have some dry powder in reserve for contingencies such as new-market openings.
David McKee is an award-winning journalist who has three decades of experience covering the gaming industry.
Verticals:
Sectors:
Topics:
Dig Deeper
Related stories
The Backstory
How Rush Street set the stage for an upbeat outlook
Rush Street Interactive’s latest guidance did not appear out of nowhere. The company had been telegraphing an acceleration across its casino-led portfolio for several quarters, underscoring product stickiness, disciplined marketing and an expanding player base. In its most recent results, Rush Street reported its best third quarter to date, delivering US$277.9 million in revenue, up 20% year over year, and a US$14.8 million profit. Management also raised full-year guidance and projected 2025 cash flow of up to US$153 million. Those figures, and the surge in monthly active users on both sides of the equator, framed the optimism that ran through the company’s latest comments to investors. For context, see the company’s third-quarter scorecard in Rush Street Interactive revenue spikes in third quarter.
The narrative of steady execution predates the summer. In the first quarter, Rush Street posted 21% revenue growth and swung to an US$11.2 million profit, while maintaining guidance of US$1 billion to just under US$1.1 billion for the year. That update emphasized North American online casino outperformance and a rising share of high-value players, even as average revenue per user shifted by region. The earlier read is detailed in Rush Street Interactive earnings, profit grow in first quarter.
By the second quarter, the company was taking a victory lap. Growth broadened, with Michigan up 42%, West Virginia up 47%, Ontario up 25% and Latin America climbing sharply. Management reiterated confidence in cash flow and reiterated that momentum in online casino was more than offsetting tax headwinds. The cadence and composition of that performance are in Rush Street leaders take victory lap in earnings call.
Latin America: tax shocks, resilient demand
Rush Street’s bullishness on Latin America sits alongside a pragmatic view of policy risk. Colombia’s value-added tax became the biggest variable in 2024–25, first appearing as a 19% emergency levy that the company absorbed with targeted bonusing rather than passing costs on to players. In early commentary, executives said the decree had limited duration and faced court scrutiny, noting that market growth slowed to flat as the tax took hold. See the first-quarter discussion in Rush Street Interactive surmounts adverse sporting results.
As the year progressed, leadership kept the VAT impact embedded in guidance while signaling that congressional action would be needed to extend it. They also flagged potential judicial relief. Those moving pieces and Rush Street’s mitigation efforts — adjusting bonuses, trimming marketing and leaning on its proprietary incentives engine — are outlined in Rush Street Interactive: iGaming prospects better than ever and expanded in the second-quarter call recap. Despite the tax, Colombia remained a growth contributor in select months, and the company cited strong player-count gains even when net gaming revenue dipped.
Mexico, meanwhile, shifted from bright spot to watch list. After management touted triple-digit growth earlier in the year, the conversation turned to taxation, with an expected rate increase from 30% to 50% coming into view. Rush Street’s stance remained consistent: it would prioritize long-term profitability and adjust spend while staying invested in what could become a market larger than Colombia by revenue. That arc is captured in the first-quarter earnings call and contextualized by the cadence of Latin America user growth in the third-quarter report.
Product engine: casino-first with poker as a gateway
Executives repeatedly described Rush Street as a casino-first operator. That orientation has shaped product bets, cross-sell and content pipeline. The company leaned into live-dealer enhancements and a unified casino “lobby” to simplify discovery, arguing that user trust and engagement deepen in a live environment. Management said live dealer has “a lot of room for growth,” describing it as a lever to increase retention without heavy promotional burn. The product roadmap and early signals are laid out in the second-quarter call.
Poker sits in a supporting role. Rush Street launched a multi-state poker platform in four states, positioning it as a gateway to higher-yielding casino and sports products. The early performance was described as successful for a notoriously hard-to-scale vertical, and executives said the focus is on cross-sell efficiency rather than poker market share alone. That strategy is detailed in the Q2 update and previewed earlier in the Q1 results call.
Policy currents: igaming momentum, prediction markets and sweepstakes
Rush Street’s outlook is anchored in a view that U.S. igaming legalization will gain traction as state budgets tighten and unregulated play proliferates. Management has argued that sweepstakes casinos, which mimic regulated products without licensing or state taxes, create both consumer risk and political pressure for legal alternatives. The company has used that narrative to frame a coalition push for broader legal online casino, a theme emphasized in Rush Street Interactive: iGaming prospects better than ever.
On prediction markets, the company sees an asymmetrical risk profile compared with sportsbook-centric peers. Rush Street contends that if event-contract markets siphon state sports betting tax revenue, the response could be more igaming legalization — a net positive for a casino-first operator. Even so, leadership has kept a cautious stance, saying it will not be a first mover in prediction markets while the legal framework remains unsettled. Those views recur across the second-quarter and first-quarter calls.
North of the border, Rush Street highlighted progress in Alberta, where an open online model for sports betting and casino is moving through the legislature, with operations targeted by 2026. The company sees Canada’s regulatory evolution as a template for new-market entries that meet its return thresholds, as discussed in the Q1 discussion.
Balance sheet discipline and the next wave of growth
The company’s capital posture underpins its patience. Rush Street ended recent quarters with more than US$200 million in cash and no debt, a cushion it has used selectively for share repurchases and kept ready for high-return market entries. Management has stressed that buybacks will be opportunistic, not programmatic, while the highest and best use of cash remains expansion into new igaming states or provinces. Those priorities and the flow-through to cash are covered in the first-quarter earnings release and the second-quarter call.
The recent third-quarter print reinforced that thesis: revenue up 20%, cash flow up 54% and marketing spend disciplined even as monthly active users climbed 34% in North America and 30% in Latin America. Management framed that performance as validation of product differentiation and a player-first approach that can scale without outsized promotions. The company also projected 2025 revenue of US$1.1 billion to US$1.2 billion, signaling confidence that the pipeline — new games, live-dealer depth, poker cross-sell and market openings — can outrun taxation friction in Latin America and regulatory uncertainty in the U.S. For the details, see the third-quarter results recap.
Taken together, the past year traces a clear through line: build around casino, use poker to widen the funnel, lean into markets where regulation supports durable economics and stay liquid for the next legalization wave. That is the context behind Rush Street’s current guidance and its read on the stakes — that shifts in taxes, prediction markets and sweepstakes could ultimately drive more states to open regulated online casino, where the company believes it already has an edge.
