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Rush Street Interactive, Inc. (NYSE:RSI), a $3.77 billion market cap company specializing in online gaming and betting with impressive revenue growth of 30.31% in the last twelve months, is assessing the potential impact of a new Value-Added Tax (VAT) on player deposits in Colombia, as disclosed in a recent SEC filing. According to InvestingPro analysis, the company maintains a "GREAT" financial health score, suggesting strong operational fundamentals. The Colombian President’s emergency decree, issued on February 14, 2025, imposes a 19% VAT in response to violence in the Catatumbo region.
The decree, which bypasses the need for legislative approval, is under review by Colombia’s Constitutional Court to determine its constitutionality. If upheld, the VAT could remain in effect until December 31, 2025, but may be limited to 180 days. Should the decree be deemed unconstitutional, it will be rendered moot.
With approximately 13.3% of its $863.77 million annual revenue derived from Colombian operations, Rush Street Interactive is evaluating how this tax could affect customer demand and its financial results in the region. The company is considering measures to mitigate potential revenue losses, including reducing operating and marketing expenses. For deeper insights into RSI’s financial metrics and growth potential, InvestingPro subscribers have access to over 15 additional key insights and comprehensive analysis.
Despite the uncertainty surrounding the decree’s constitutionality and impact, Rush Street Interactive’s management remains committed to long-term growth and believes in its ability to continue expanding in Colombia and other Latin American markets, leveraging its operational expertise and experienced team. With the company’s next earnings report due on February 26, 2025, InvestingPro subscribers can access detailed financial analysis and expert insights to better understand the company’s growth trajectory.
The information in this article is based on a press release statement and the company’s SEC filing. The outcomes of the Constitutional Court’s review and the long-term effects of the VAT on Rush Street Interactive’s operations remain to be seen.
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