CEO Claims RSI's Superior Ability to Manage Colombia VAT Impact Over Competitors

Rush Street Interactive (RSI) CEO Richard Schwartz has stated that the company is in a stronger position than its competitors to handle the impact of Colombia’s emergency 19% VAT on player deposits.

The new tax was introduced by President Gustavo Petro earlier this month through an emergency decree to generate revenue for the state.

The operator had previously indicated that it might need to cut operating and marketing expenses in Colombia if the tax remains long-term.

According to a filing from RushBet’s parent company, Colombia contributes about 13% of the group’s revenue.

Earlier this week, crypto-first operator Stake launched a cashback promotion for players, matching the value of the tax they would pay on deposits.

During RSI’s 2024 earnings call, Schwartz suggested that the company’s cautious approach to the Colombian market is likely to outperform reactive strategies 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.”

In reviewing RSI’s financial results for the full year 2024, the operator reported revenue of $924.1 million, representing a 33.7% increase compared to the previous year.

The results, released post-market close on 26 February, led to RSI’s stock rising nearly 10% in pre-market trading.

Adjusted EBITDA for the year totaled $92.5 million, soaring more than 1,000% year-on-year from 2023’s return of $8.2 million.

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

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

In Q4 2024, company revenue reached a record $254.2 million, up 31.1% year-on-year compared to Q4 2023’s total of $193.9 million.

Net income for the quarter was $2 million, up from a $1.7 million loss in the same period in 2023.

Adjusted EBITDA for Q4 was $30.6 million, marking a 166.1% jump year-on-year and another record for the operator.

Monthly active users in the US and Canada increased by 28% year-on-year to around 205,000. Actives in Latam were 348,000, a 71% year-on-year surge.

RSI operates the PlaySugarHouse and BetRivers brands in North America, with RushBet catering to the Latam market.

Average revenue per monthly active user in the US and Canada was $346, consistent with the $345 reported in Q4 2023. In Latam, the figure decreased by $3 to $39.

For 2025, RSI projects revenue between $1.01 billion and $1.08 billion, and adjusted EBITDA between $115 million and $135 million.

CFO Kyle Sauers noted on the analyst call that these forecasts account for the impact of the Colombia VAT, but he mentioned that projections could change if the policy is altered 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 stated: “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…”