RSI mulls cutting costs following Colombia’s temporary VAT decree
US operator says new emergency 19% tax on deposits could see business take “certain actions” to reduce operating expenditure and marketing spend
Rush Street Interactive (RSI) has said it may reduce operating and marketing expenses in Colombia should a proposed emergency 19% VAT on player deposits be implemented.
The new tax, proposed by leftist President Gustavo Petro last week, is subject to a review by the Constitutional Court of Colombia before its official introduction.
Petro enacted a state of emergency in the South American country last month following violence in the Catatumbo region near Venezuela, giving him sweeping powers, including introducing financial decrees to raise funds.
The regulated gambling industry is one such sector to now be caught in the crosshairs. Should the court rule the VAT as constitutional, RSI said it may the emergency tax may be in place until December 31, 2025.
However, if the court rules the decree to be unconstitutional, then it would immediately become moot.
The decree from the Colombian government has stated the VAT will come into play from February 21.
RSI said it has put potential mitigation plans in place should the measure come into effect.
The operator runs the RushBet brand in Colombia, Mexico, and Peru, while its BetRivers and PlaySugarHouse brands are live in the US and Ontario, Canada.
Colombia accounts for 13.3% of the company’s overall revenue, which amounted to $232.1m in Q3 2024. That means Colombia generated almost $31m of revenue.
Average revenue per monthly active user in Latam was $39 during the reporting period, with monthly active users in the region, including Mexico, amounting to 329,000.
RSI said it would explore “certain actions” that may “help reduce operating and marketing expenses to partially offset potential future impacts on the company’s revenue.”
A company statement read: “Management remains focused on creating long-term value for the company’s stockholders, which includes continuing to grow its Colombian business.
“Despite the potential short-term challenges posed by the decree, the company believes that its operational expertise, experienced management team, and local resources, will enable it to continue to achieve long-term growth in Colombia and its other Latin American markets.”
RSI’s share price is down 4%, at the time writing, though the stock is up 170% in the past 12 months.