Chicago, Illinois - Rush Street Interactive (RSI) delivered a strong financial performance in the first quarter of 2025, highlighted by significant revenue and profit growth, alongside achieving a new record for monthly active users (MAUs) across its Latin American operations. While reporting a 61% year-on-year uptick in LatAm MAUs, the operator acknowledged that the recent implementation of a value-added tax (VAT) in Colombia impacted net gaming revenue (NGR) in the market.

On Wednesday, Rush Street Interactive published its results for the first quarter ended March 31, 2025. The report showed a 21% increase in revenue year-on-year, reaching $262.4 million. The company also successfully swung from a net loss of $2.2 million in Q1 2024 to a net profit of $11.2 million in the most recent quarter.

A key driver of performance was user growth in Latin America. RSI’s total LatAm MAUs reached 354,000 in Q1, marking a quarterly record for the region as a whole. This figure represents a substantial 61% increase compared to the average LatAm MAUs in Q1 2024. Notably, Rush Street Interactive also recorded a new peak for MAUs specifically in Colombia, demonstrating continued user engagement even after the introduction of a 19% VAT on online gambling operators in the country in February.

During the post-results analyst call, Rush Street Interactive CEO Richard Schwartz addressed the impact of the new Colombian tax. He explained that the company had chosen to absorb the cost of the tax through increased bonusing and promotional spend, rather than passing the expense directly onto players. Schwartz stated that this strategy allowed RSI to retain its market share in Colombia and keep gross gaming revenue (GGR) levels near all-time highs, reporting a 55% increase in GGR in local currency for the quarter.

However, CFO Kyle Sauers provided a more nuanced view on other financial metrics, noting that NGR in Colombia was “falling short of base expectations.” He elaborated on the impact, stating, “In each of March and April, our net revenue growth was significantly impacted.” Sauers specified that in March, RSI’s net revenue in US dollars was slightly down year-over-year, and in April, it had been approximately flat year-over-year. He summarised the situation by saying, “So, we’ve got a market that may have otherwise been growing at 50%, plus that’s now relatively flat year-over-year because of this temporary VAT tax.” Across LatAm as a whole, average revenue per MAU also saw a decline, falling to $36 in Q1 2025 from $44 in Q1 2024.

Outlook on the Colombian VAT and Market Optimism

The Colombian government implemented the 19% VAT by temporarily removing an existing exemption for online gambling operators. The stated purpose was to secure additional funding to cover expenses related to civil unrest in the Catatumbo region. The tax is currently slated to remain in effect only until the end of December 2025. Nevertheless, the industry remains uncertain about whether this “temporary” measure could potentially be made permanent.

Speaking to iGaming Times previously, local lawyer Juan Camilo Carrasco, a partner at Bogota law firm Asensi Advogados, remarked on the situation, stating, “We know that regarding taxes, nothing is more permanent than something that comes in temporarily.”

Despite this uncertainty, RSI’s Richard Schwartz highlighted a potential path to the tax’s removal. He explained that the tax is currently under review by the Colombian constitutional courts to determine its legality, with a final ruling anticipated by late May or June. Rush Street Interactive expressed underlying optimism regarding the potential for the tax to be repealed. “Given how strong the volumes have been in Colombia, should the temporary tax go away prior to year-end, we could see meaningful upside to both revenue and EBITDA,” CFO Kyle Sauers commented, adding that “The removal of the VAT tax should be a very meaningful driver of growth for us when that happens and when we have those as comparables with when the tax was in place.”

Excitement for Mexico and Peru Growth

Beyond the challenges presented in Colombia, Rush Street Interactive remains highly confident in its performance and prospects in other Latin American markets, where the company is operational in Mexico and Peru.

In Mexico, Rush Street Interactive noted significant year-on-year growth in Q1 2025, close to 50%, as the company completed its third full year in the market. CEO Richard Schwartz conveyed considerable enthusiasm for the market, stating, “In terms of Mexico, we’re really seeing a lot of great growth out of that market. It’s continued to be one that really excites us and things are moving in a really great direction for us there.” Schwartz also reiterated the company’s long-term view: “And as we noted before, we expect over time it will be one of the largest markets in LatAm, larger than Colombia, ultimately. So, we feel really optimistic about Mexico.”

In Peru, where RSI launched its RushBet brand in July 2024 as part of its strategic expansion into the region, the company is currently taking a more measured approach. “Peru has been a story where we haven’t invested much in marketing yet, because we’re continuing to optimise the experience and localise it,” Schwartz explained. While acknowledging the slower initial ramp-up, he added, “It’s something that we continue to feel positive about, but it has been a market that we haven’t ramped up yet. It’s still something that we’re excited to be able to do in the future given the relatively large population that country has.”

Future LatAm Expansion Opportunities

In the company’s Q1 2025 results presentation, Rush Street Interactive highlighted several potential future expansion markets within Latin America. These included regulated or emerging markets such as Chile, Argentina, Ecuador, and the newly regulated Brazil. RSI estimated that by the end of 2028, its total addressable market in Latin America could reach a significant $15.9 billion.

Richard Schwartz indicated that the company is actively evaluating opportunities in additional LatAm markets. “There are other LatAm markets as well that we’ve been focused on and have been evaluating ways to enter those markets,” he stated, while not announcing specific plans at this time. He added that having an established brand, platform, experienced team, strong marketing capabilities, and local operational knowledge in the region makes it considerably easier to successfully enter and operate in future markets.

Company-Wide Financial Performance

Beyond the regional specifics, Rush Street Interactive also reported strong company-wide financial improvements in Q1 2025. Adjusted EBITDA saw a substantial 95% year-on-year increase, reaching $33.2 million. This was achieved despite adjusted sales and marketing expenses edging up by a modest 3% to $38.8 million.

In North America (US and Canada), RSI’s MAUs also grew, increasing by 17% to 203,000. The average revenue per MAU in North America remained significantly higher than in LatAm, standing at $368 compared to $36, reflecting the differing market dynamics.

Rush Street Interactive concluded by reiterating its full-year 2025 guidance, projecting revenue to be between $1.01 billion and $1.08 billion, and adjusted EBITDA to reach between $115 million and $135 million. CEO Richard Schwartz attributed the strong overall results to “our commitment to innovation and enhancing the quality of our player experience, alongside efficient acquisition and retention of high-value players.”