RSI can deal with Colombia VAT fallout “better than our competitors”, says CEO

Rush Street Interactive (RSI) CEO Richard Schwartz has said the company is better placed than its competitors to deal with the fallout of Colombia’s emergency 19% VAT on player deposits.  

The new tax was proposed by President Gustavo Petro earlier this month as part of an emergency decree to raise funds for state coffers.

The operator had previously warned that it may have to reduce operating and marketing expenses in the South American country should the tax become a permanent fixture. 

As per a filing from the RushBet parent company, Colombia accounts for around 13% of group revenue.

Earlier this week, crypto-first operator Stake announced its creation of a cashback promotion for players equal to the value of the tax they would pay upon deposit. 

Speaking during RSI’s 2024 earnings call, Schwartz claimed the company’s measured approach to the Colombian market would compare favourably against reactive approaches from competitors.  

He said: “Competitors are all trying to determine, like we are, how to manage this most effectively.

“I feel very good about our situation because of our technology and the fact we can do a lot of things with our platform that are very common to do from others in terms of segmentation to ensure the proper players are getting the bonusing.  

“You’ve already seen some operators start with one approach and change their approach pretty drastically. What we’re doing is staying the course and tweaking and monitoring situations to ensure we’re always looking after the players that matter most for our business.  

“I’m confident we have the best team in the industry down there and a top-quality platform for the market which should allow us to manage through this better than our competitors.” 

When looking at RSI’s financial results for full-year 2024, the operator reported revenue of $924.1m (£728.4m), representing a 33.7% increase when compared to the previous year.  

The results, which were released post-market close yesterday, 26 February, has seen RSI’s stock jump almost 10% in pre-market trading.

Adjusted EBITDA for the year totalled $92.5m, skyrocketing more than 1,000 % year on year (YoY) from 2023’s return of $8.2m.

After factoring in revenue costs of $602.m, advertising costs of $158.6m, $106.9m of administrative expenses and depreciation costs of $32.2m, total expenses for the year rose 22.1% to $899.8m.  

This left the operator with income of $24.3m for the year, up from a $51.6m loss experienced in 2023.  

Looking at Q4 2024, company revenue amounted to a record $254.2m, up 31.1% YoY against Q4 2023’s total of $193.9m.

Net income for the quarter came to $2m, up from a $1.7m loss in the corresponding period in 2023.  

Adjusted EBITDA for Q4 landed at $30.6m, representing a 166.1% jump YoY and another record for the operator. 

Monthly active users in the US and Canada were up 28% YoY to around 205,000. Actives in Latam hit 348,000 – a 71% YoY spike.

RSI runs the PlaySugarHouse and BetRivers brands in North America, with RushBet being its Latam-facing business.

Average revenue per monthly active user in the US and Canada was $346, flat against the $345 reported in Q4 2023. In Latam, the metric was down $3 to $39.

Looking ahead to 2025, RSI has projected revenue of between $1.01bn and $1.08bn, alongside adjusted EBITDA ranging between $115m and $135m.  

CFO Kyle Sauers noted on the analyst call that those forecasts do include impact from the Colombia VAT fallout, but he did add that these guidances could change should policy shift in the market.

He said: “If the tax were to be reversed or shortened, that provides upside to both the bottom end and top end of our guidance. We’re only a few days into [the VAT]. We’re learning as we go and what the impact might be.”

Commenting on the company’s full-year performance, Schwartz remarked: “We are excited to report another quarter of record performance, including for both revenue and adjusted EBITDA.  

“We experienced broad-based growth and success across all our geographies and products. We continued to accelerate player growth, acquiring more players efficiently while maintaining industry leading player values.

“Our commitment to focusing on player needs and leveraging cutting-edge technology to deliver a world-class user experience continues to drive significant growth and profitability. 

“As we enter 2025, we are excited about the opportunities ahead. Our investments in technology, strategic partnerships and providing an exceptional customer experience have set a solid foundation for sustained growth and profitability.  

“We remain dedicated to delivering long-term value to our customers and shareholders, and we are confident in our ability to maintain this momentum.”