Rush Street Interactive reports 61% uptick in Q1 LatAm MAUs

Rush Street Interactive Achieves Record Monthly Active Users (MAUs) in LatAm Despite VAT Impact

Rush Street Interactive (RSI) has announced unprecedented growth in its Q1 results, reporting a remarkable 21% year-on-year revenue increase, totaling $262.4 million. This turnaround from a $2.2 million loss in Q1 2024 to a net profit of $11.2 million this quarter evidences the company’s robust operational strategies and market adaptability.

For the first time, monthly active users (MAUs) in the Latin American (LatAm) region surged to 354,000, setting a new quarterly record. Notably, despite the Colombian government imposing a 19% value-added tax (VAT) on online gambling operators in February, RSI was still able to achieve a record number of MAUs in Colombia.

During the post-results analyst call, CEO Richard Schwartz elaborated on the company’s strategic response to the VAT. Rather than passing this cost onto users, RSI opted to absorb the impact through promotional bonuses, successfully maintaining its market share in Colombia and sustaining gross gaming revenue (GGR) levels that have risen by 55% in local currency, illustrating impressive resilience in a challenging regulatory environment.

CFO Kyle Sauers acknowledged that certain financial metrics, including net gaming revenue (NGR), fell short of baseline expectations in Colombia. The average revenue per MAU across LatAm dropped from $44 in Q1 2024 to $36, indicating the tangible effects of the VAT implementation.

“In March and April, our net revenue growth was distinctly affected,” Sauers noted. “In March, our net revenue in U.S. dollars was slightly down year-over-year, while April trends remained flat.” He added that the market that could have seen 50% growth is now relatively stagnant due to the VAT tax.

Could the Tax Be Repealed?

The VAT on online gambling was introduced in Colombia to fund government expenditures in light of ongoing civil unrest in the Catatumbo region. Initially set to expire at the end of December, uncertainty looms over its potential permanence within the sector.

Local legal expert Juan Camilo Carrasco, partner at the Bogotá law firm Asensi Advogados, commented, “Historically, temporary taxes often become permanent.” However, Schwartz indicated that the tax’s constitutionality is currently under review by Colombian courts, with a resolution anticipated by late May or June.

There’s a sense of cautious optimism at Rush Street Interactive regarding the tax’s potential repeal. “Should the temporary tax be lifted before the year’s conclusion, we could see a substantial boost in both revenue and EBITDA,” Sauers remarked. “Removing the VAT would be a significant growth catalyst for us.”

Excitement for Mexico and Peru

Beyond Colombia, RSI is making strategic strides in other LatAm markets, including Mexico and Peru. The company has noted near 50% year-on-year growth in Mexico during Q1, as they enter their third full year in this market.

“Mexico is showing exceptional growth,” Schwartz emphasized. “We believe it has the potential to surpass Colombia as our largest LatAm market.”

Conversely, RSI has adopted a more measured approach in Peru, launching the RushBet brand in July 2024 as part of a broader strategy to enhance its local presence. “Peru is a market where we’re currently optimizing and localizing our offerings,” Schwartz explained. “We remain optimistic about future growth as we deepen our market engagement.”

LatAm Expansion Opportunities for Rush Street Interactive

The company’s results presentation highlighted potential expansion avenues within LatAm, including Chile, Argentina, Ecuador, and the newly regulated Brazilian market. By 2028, RSI anticipates a total addressable market of $15.9 billion in the region.

“We’re continuously evaluating new LatAm markets for entry,” Schwartz indicated. “Our established brand and operational expertise allow us to adapt and succeed as we expand further.”

Rush Street Interactive EBITDA Nearly Doubles in Q1

In addition to revenue and net income growth, RSI reported a striking 95% year-on-year increase in adjusted EBITDA, reaching $33.2 million in Q1, despite a 3% rise in sales and marketing expenses to $38.8 million.

MAUs in the U.S. and Canada also rose by 17% to 203,000, with average revenue per MAU significantly outpacing LatAm at $368 compared to $36.

The company reaffirmed its FY2025 guidance, projecting revenues between $1.01 billion and $1.08 billion, with adjusted EBITDA anticipated to reach $115–135 million. “These strong results reflect our commitment to innovation and enhancing player experience while optimizing the acquisition and retention of high-value players,” Schwartz concluded.