Rush Street Interactive at Oppenheimer Conference: iGaming Drives Growth

On Wednesday, 13 August 2025, Rush Street Interactive (NYSE:RSI) presented its strategic vision at the Oppenheimer 28th Annual Technology, Internet & Communications Conference. The company emphasized its focus on iGaming as a primary profit engine, while also addressing challenges such as competition with larger brands. The conference, led by CEO Richard Schwartz and CFO Kyle Sauers, highlighted the company’s unique technology ownership and player engagement strategies.

Key Takeaways

• Rush Street Interactive focuses on iGaming, with only 12% of the U.S. population having access to regulated online casinos.
• The company owns its technology platform, allowing for nimbleness and differentiation.
• North American iCasino markets saw over 30% growth in Monthly Active Users in Q2.
• GGR in Colombia grew over 50% in the first half of the year despite a 19% VAT.
• The company is profitable in Ontario, experiencing over 25% growth in the past quarter.

Financial Results

• North American iCasino player growth accelerated throughout Q2.
• Colombia’s GGR increased by more than 50%, with VAT expected to end by year’s end.
• Ontario’s market saw a 25%+ growth rate, marking the fastest growth in recent times.
• Sportsbook revenue grew 15% year-over-year in the last quarter.

Operational Updates

• Rush Street Interactive’s technology platform allows for nimbleness and unique feature control.
• The New Jersey iGaming market continues to grow at over 20% annually.
• Launched a poker platform in West Virginia, Delaware, Pennsylvania, and Michigan, with plans for New Jersey.
• First to launch in West Virginia and exclusive operator in Delaware.
• Plans to launch in Alberta, Canada, in Q1 next year.

Future Outlook

• Faster adoption rates for iGaming are expected in new markets compared to previous years.
• States with financial pressure and Medicaid funding needs are seen as opportunities.
• The World Cup year is anticipated to boost growth in Latin American markets.
• Plans to grow market share in Mexico and localize in Peru.

Q&A Highlights

• Discussed impediments to iGaming legalization, including concerns about cannibalization from land-based casinos.
• No specific states were mentioned as bullish prospects.
• Strategies for competing with larger competitors and gray market operators were discussed.
• Rush Street Interactive is ranked number two in Colombia and in the top seven in Mexico.

For more detailed insights, please refer to the full transcript below.

Full transcript - Oppenheimer 28th Annual Technology, Internet & Communications Conference:

Chad, Oppenheimer Analyst, Oppenheimer: Alright. Thank you everyone for joining us today. Last day of our, I think, the twenty eighth annual Oppenheimer TMT conference. It’s my pleasure to welcome Richard Schwartz, CEO of Rush Street Interactive, and their CFO, Kyle Sauers. Rush Street’s probably been one of the best performing gaming stocks over the past two years.

The management team’s done a wonderful job sustaining iGaming growth and, you know, growing its Latin American presence. So, Richard, Kyle, thanks for joining us.

Richard Schwartz, CEO, Rush Street Interactive: Thanks, Chad. Thanks for having us.

Chad, Oppenheimer Analyst, Oppenheimer: So I guess just a question we or actually, I wanna start this off because they got a big cover cover you know, growing its Latin American presence. So, Richard, Kyle You wanna meet him? Yeah. Thanks for joining us.

Richard Schwartz, CEO, Rush Street Interactive: Thanks, Chad. Thanks for having us.

Chad, Oppenheimer Analyst, Oppenheimer: Is there is a lot I guess just a question we or, actually, I wanna start this off.

Kyle Sauers, CFO, Rush Street Interactive: That’s yeah. We we hear it too. President,

Chad, Oppenheimer Analyst, Oppenheimer: You wanna meet? Alright. Alright. Thanks. So coming back, I guess, Richard, we we’ve been covering the stock now for for, I think, almost six years.

And what struck me is, as a CEO, I think you had the right strategy in terms of where you saw the vision for the company, thinking that sports was nice to have, but iGaming was really where you saw a lot of the value creation for Rush Street. So can you just talk about the overview of the iGaming strategy? And, you know, I think iGaming was up mid twenties or around 25% last or or maybe it was probably higher. Can you just talk about where we are in terms of the growth trajectory of iGaming and just the sustainability around it?

Richard Schwartz, CEO, Rush Street Interactive: Sure. I mean, we I think from the very beginning, we did recognize that iGaming was gonna be the profit engine of our industry, and we took the steps we needed two years ago to make sure that we were starting development of a lot of a wide range of differentiated and unique IP that would give us an advantage in this market. And so we’ve been able to own our own technology from the very beginning with our own platform so we could be nimble, differentiated, quick to market, control with new features, and control our destiny. And when we bring something new and exciting to a customer base, making sure that we were the only ones that offered it, which then gives a customer reason to, stay with us. So we knew we had it right.

I think that the that would be the right, focus for us as a growth engine. And I think you’ll see from the states that report the data that, you know, many states, you know, three times you know, casinos online casinos three times the size of sportsbook. So it is the right market. It’s high it’s reliable. It’s consistent.

So the question becomes, well, how do you make sure you, you you have the experience that is right to retain and to to establish, retain a leadership position in that segment? But in terms of the market itself, you’ll see New Jersey over ten years in is still growing 20% plus a a a year. Other states are growing even faster. And the exciting thing for this segment and for our company is that you only have five US states where it’s legal, and that represents only 12% of The US population can play a legal regulated online casino today. Contrast with sports betting, we’re over 60%.

Around 60% of online of the population of US can play online sports can bet on online sports today. You can see the major opportunity for iCasino online casino to not only bridge that gap, but also address some of the other states that don’t have either one yet today. So I think for us, it’s really the fact that you have a very high quality, proven, reliable industry that is very clearly gonna gonna generate a large amount of tax revenues for states that endure embrace it and and legalize it based on what you’ve seen in Pennsylvania and in, markets like Michigan. You’ll see that. We’re talking about hundreds of millions of dollars a year of incremental taxes per states.

So I think we’re in the right place at the right time with the right product, and and everything for us is is really, I think, hitting all cylinders other than just trying to get the acceleration of more jurisdictions.

Chad, Oppenheimer Analyst, Oppenheimer: And then before we go company specific, you touched on something. You know, New Jersey is still growing, call it, 20%. And I think iGaming’s been legal there for almost twelve years. So is it just coming from new users, or why do you think, you know, even a state like New Jersey, it seems that it’s still rel you know, it’s it’s the market’s not nearly close to being saturated.

Richard Schwartz, CEO, Rush Street Interactive: I think it’s it’s combination. You always get a new generation of players every year who are able to who are the legal age to bet. But that’s really what’s driving, I think, is ultimately just the maturity of our experience and the fact that we have so many we’ve done a lot of great things, but as Kyle and I and others in the company talk about a lot, there’s so many more things we wanna do that we know are gonna be opportunities to grow the revenues for our our our business. And so I think it’s really the maturity of more methods of, better methods for payments getting involved, more intuitive designs, more innovative features, and just being able to sort of improve all aspects of the service that we offer to the point where customers are like, well, this is really compelling and in some ways more fun than any other entertainment we have available because it can be done in the home, right, which is, from a cost standpoint, if you’ve been mind budget minded, you know, this is the most affordable way of having a high quality entertainment and that you’re you’re not having to travel, you’re not having gas, you’re not incurring hotel costs or flight costs and eating out costs.

And and even the price to play a game online on a casino, you could play a blackjack game for a nickel, right, compared to, you know, $10.15, $20 minimums at a land based property. So I think across the board, you’re not being impacted by tariffs. You’re not being impacted by, in the same way, or at least truly directly by, anything, in terms of inflationary cost because the cost to play our product remains the same as a as a as a currency, you know, as as it remains fixed. So all in all, I I would say that new players coming in always helps. You have more brands, more industry supporting our industry, you get the opportunity to acquire new customers.

On the flip side, I would just say we’ve we’ve been very good at growing the existing revenues from our existing customer base, and I think others are probably doing something similar.

Kyle Sauers, CFO, Rush Street Interactive: Yeah. That would And as you’re Jud I’ll just throw in there. Like, in terms of point of saturation, I don’t think we’re anywhere near that because the, know, the most of the growth that we’re seeing in these online casino markets is coming from new player ads. You know, certainly, as our players mature, they get stickier, retention is higher and higher as as the cohort gets older. So the value of those players does go up.

Mhmm. But our revenue growth is being driven by by the the user accounts increasing. In fact, we said this on our earnings call, but our our growth in North American iCasino markets in player growth has been the highest it’s been in a long time, and it actually accelerated as as the second quarter went along. So I think that’s that’s, gives us good indications of how the how the business is trending for the back half.

Chad, Oppenheimer Analyst, Oppenheimer: Is it now has your customer mix changed? Because historically I mean, before the boom of sports betting, I think iCasino was sort of, you know, call it mid fifties females. Like, are you seeing more sports first players, or or what what as as as or is it kinda still a similar consumer mix?

Kyle Sauers, CFO, Rush Street Interactive: So I’d say it’s it’s a similar consumer mix. We have been focusing most of our marketing efforts and and marketing investments in the markets that have online casino. That’s where we’ve got a great differentiated product. We’re we’re getting players at really good values that have good payback periods, and we’re actually doing it at lower cost than we were much lower cost than we were two years ago. So our in q two anyways, in North America, our our monthly active users grew 22%.

I think it was in total, maybe it was 21% in total, but it was over 30%, in the iCasino markets. So I think by virtue of our product being super differentiated and that we’re spending more of our money there, that’s where our player growth is coming from. We’re getting sports betting, players added every day, of course. Some in sports book only markets, some in those iCasino markets, but it’s it’s predominantly coming from iCasino player ads.

Chad, Oppenheimer Analyst, Oppenheimer: Got it. And then, Richard, you mentioned something about owning, you know, the tech stack. So is that more important with the smart bonusing, or is it more important with having your own content and sort of I guess the follow-up question there is, how do you measure using content from third parties versus what you create on your own?

Richard Schwartz, CEO, Rush Street Interactive: Yeah. That’s a great question. I mean, listen. In the industry, there’s a large number of very high quality suppliers provide games to all the operators. I mean, think of all, like, a movie theater.

Everyone has the same basic movies from the same distributors. We’re the only ones that do something completely different, I I would argue, and that we, don’t just use the IP from the the suppliers of the movies, but we build our own games ourselves that aren’t actually just the primary movies. They’re actually interjected in the middle of watching a movie. We’re giving players all these different experiences that are our unique IP that we built ourselves. So what what I like about this strategy and why it’s been, I think, very successful is that a 100% of players who are playing any game on our site will will experience the content that we build ourselves rather than trying to hope that we can drive a customer to play the the one or five games we built ourselves in the corner or somewhere that’s probably not well known, not something they’ve ever played before, maybe not at the same quality as maybe the top hits that are provided by the biggest suppliers in the world, like the aristocrats, the IGTs, or the World Light and Wonder.

So I think, like, what we have built is a wide range of intervening experiences, which is unique for our experience. So if someone plays with us, they’re not just watching at the same movie, the same movie theaters everybody else is. We’re we’re watching a movie, and all of a sudden it’s saying, Jed, hey. Pause here. We have this really exciting opportunity for you to win some extra prize in a fun way you’ve never seen before, whether it’s a three d character coming across the screen dumping money on the player’s site, whether it’s, hey.

You’ve invited to a slot tournament or a fun bingo game, or here’s a mystery present that shows up and players are like, well, what what happened here? You open up, you get all kinds you know, prizes. It’s it’s we have a jackpot games that, hey. Jenny, congratulations. We’re gonna pause this movie for a second, we’re and gonna give you a chance to play a jackpot game where you owe a $100,000.

And by the way, it’s on the house. You don’t have to pay anything extra as a player. So we’re creating value and fun and experiences of players that inner that every player feels when they play with us. So I think, oh, if you’re gonna build something yourselves, you have to know what to build, build high quality, but also make sure you distribute it in a way that all your players can play it and experience it. And that you’re not so rather than trans we also have our own unique exclusive core games on casino like others are doing as well.

But arguably, the impact of that is is is is not as as great as the impact is to what we’ve been able to do, which is make sure that our unique IP touches the players every session they play with us no matter what game they’re playing. So that I think that’s where we put a lot of effort into developing with our own technology unique features. We also offer something unique that I think you know, but I think for investors who may not be as familiar with our story, that’s really compelling, I think, as a community, a digital community of players who talk with each other, engage with moderators from our team as well that are in there offering trivia contests, fun parties, con just engaging conversations. And what that does is, you the know, world’s a kinda lonely place right now for a lot of people, and this creates a a very social environment for those players to be able to engage and have fun and laugh and forget about the day to day in their life possibly, what’s going on in the world, and be able to just enjoy the entertainment value that comes from playing the games they like, but also socializing with like minded customers who enjoy the same things they do.

I think that combination of these gamified promotional engine that we built plus the social community element that we’ve combined in our product are two things that are completely unique to us and is one reason why despite having a lower budget per on marketing than some of the others and having a lower well, lesser known brand is certainly the beginning. We’re able to deliver the outsized results that we are because players who find us and experience this, they tend to stay with us. And the retention in this industry is the key. And the way to retain players, ultimately, is obviously treating them well with fairness, honesty, integrity. Our customer service team does a great job with that.

That’s also a user experience. Give them something that they can experience with us that they like, and they don’t wanna go anywhere else because they wanna they wanna replicate that. And if they go somewhere else, they can’t replicate that. So they’re coming back to us to play. And I think that’s one reason why our revenues per active user are the highest that we’ve seen in the industry is because, you know, multiple players have multiple players think we have multiple accounts.

But what you see is our our our mouth is so high that it’s it’s a it’s an indication now the players are choosing to spend a disproportionately large amount of their entertainment budget with us versus other brands that may be competing with us.

Chad, Oppenheimer Analyst, Oppenheimer: And you mentioned something interesting about engagement. So that that kinda leads me to two other questions. Number one is just can you talk about the the strategy on live dealer, you know, build versus partner, how the how that how the how you think about LiveDealer? And then second, just speaking of engagement, you know, you you probably more than other other other competitors talk more about poker, you know, state by state, having more liquidity pools. So can you just talk about those two strategies and how that fits in?

Richard Schwartz, CEO, Rush Street Interactive: Sure. So LiveDealer is a, you know, is a trusted product for customers because they see with their own eyes the car is being dealt by live dealers being streamed to the players, in their homes. So, you know, we were very early to, you know, be live with with the market the global leader in this area, in terms of product quality for many years has been evolution. But what we did was many of our peers kinda had exclusive deals only with that one company, and they weren’t able to use other live dealers. We know the players like variety of content, so we made sure that we were never restricted.

And we did, we’re able to bring a a wide variety of different live dealer, suppliers into our mix. On top of that, what many do is many of these suppliers live dealer, they want to, retain customers only playing their subset of games from that one supplier. As an operator, we wanna sort of give the players a choice of all the live dealer games. So what we’ve done is we’ve created our own live lobby live dealer lobby where we mix all the games from all the vendors together in a way that maybe isn’t intuitive for other sites because typically you might have a, every vendor kind of wants their games only being played themselves. So you don’t want game a on vendor, you know, on Evolution.

Maybe they want you playing game b from Evolution where we want certainly the choice for players to pick whatever games are available for us regardless of which supplier provides them. So we focus on live dealer improving the quality experience, integrating some tools that allow us to bonus the players. I think some you know, you know, the margins aren’t as great typically on a live dealer for us as they are other products because of the cost and overhead to run those products. I also think some of our competitors are very more heavily focused on the overlap from sports who have larger sports audiences as we do. Having said that, you know, I think the quality of the experience we offer is first rate, and it’s only getting better.

So it’s a category that we plan on continuing to grow in terms of variety of content. We have some unique, IP coming out in this area of partnership with some third party suppliers. And overall, I think it’s a category you have to have, and it’s one that we plan on being very strong in in in the future. So I think that’s a that’s a important part of the casino mix. If I could shift to poker, you know, poker, when the market started, opened, you know, ten years, twelve years ago, people thought poker was gonna be this gigantic revenue opportunity on its own merit.

And I think we sort of felt like without liquidity sharing among the same number of states that they used to have it when it was a great market experience in The US before when PokerStars and and and, Fulltilt used to sort of run the business in The US. You know, they were operating in 50 states. That made the product way more appealing. So you really have to have multiple states joining together to create liquidity so you have enough of an experience to offer larger prizes and a variety of games always on so a player can always find what they’re looking for. So recently, we or a few couple years ago, we said, well, this market’s really been under focused on by a lot of our peers.

There’s really nothing innovative new in the in that segment. And, really, when you look at it, a poker customer is a casino customer. And a lot of players wanna play poker because they’re passionate about it, and they wanna play poker. They weren’t gonna play with us. And that meant they were not gonna probably give us their casino business unless they already experienced it with us.

So we think adding poker did two things for us. One is it it it it oh, widen our audience of new customers who will give us a try that maybe in the past would not have given us a try because now they’re looking for poker. They hear we have great quality products, so they’re gonna come play with us. And number two, an existing customer who wants to play poker in the past would leave us to go play somewhere else, and we wanna keep that customer within our ecosystem. So I think by launching a poker, we’re the first ones to launch in, you know, in in the in in the, in West Virginia.

We were the only exclusive in Delaware, and we’re live in Pennsylvania and Michigan. And at some point, we’ll be launching as well in in New Jersey. The point is is that we now have some liquidity, and it’s really helping us to reach gamblers. And some of the personas we have, like Phil Helmut and Phil Galfont, very respected poker players, are reaching out to, consumers in a way that I’m I’m getting more inquiries from people I know asking about them than I have from any early any other marketing, exercise we’ve done. So I think it just creates a brand awareness for the brand that helps the business overall too.

And lastly, we’ve made sure we built the poker platform, not to generate revenues for poker because we recognize poker itself is a small market. We’re not putting the effort in for poker revenues. We’re putting more effort in so we can cross sell to sports and casino. And what we’re seeing is a really, is is validating what we thought was gonna happen, which is that you’re getting a lot of players playing poker. Like, oh, let me try betting on sports with BetRiver.

I like this experience. Let me try to bet on casino games. And, ultimately, it’s just a part of the ecosystem. I think if you’re missing it, you’re not a complete operator. And so we felt it was important to have it, and we’re really proud of the result of what we put in.

And the product’s been very, very well received, which is hard to do for a product this complex. But, again, I think there’s very few companies that own their own poker platform. If you try to add it as a b to b supplier, there’s very few options available. So, ultimately, we have something that’s scarce and working very well for us.

Chad, Oppenheimer Analyst, Oppenheimer: And then, you know, just just touching on where we are in the legalization, you know, I think, you know, it’s maybe forced you know, we haven’t really seen anything go go live here in iGaming in a in a in a while now. What do you think the impediment is? Is it more of the land based casinos worried about cannibalization? Is it more of the legislators? I mean, is there any catalyst you think that could unlock more states to start to legalize iGaming?

Because, you know, the numbers don’t lie. So I think it’s kinda surprised some of us that have been following the industry now over the last five years.

Richard Schwartz, CEO, Rush Street Interactive: Yeah. There’s a lot of questions in your question here, but let me try to, simplify it in the same that, yes, it hasn’t moved to the pace that I think a lot of people thought it would, although we do have a great market in Alberta getting ready to open probably in the first quarter of next year. So that’s another, opportunity. It’s really exciting for us given our success in Ontario and and opportunity and ease for us to launch in that market when it’s available for us. What I will say is that I think during COVID, there’s a belief that maybe, you know, the states would need some extra money, but instead, they end up getting a large surplus of funds from the federal government.

And, really, states weren’t really struggling at all financially. And I think now states are increasingly left on their own. And I think the the bill that was passed recently is putting a lot of pressure on Medicaid fees. And so states that went all in with matching on Medicaid are gonna need to sort of supplement those lost funds with something meaningful. And if you look at a market like Michigan, you know, which is approaching, you know, a couple $2,000,000,000 of tax generated in the first five years, that’s real money for another state like Illinois or New York to add in.

Even they’d be even larger given the larger population and the increased maturity of the market the of our industry. So I think the the rates of adoption are faster when a new market opens than they would be from, say, seven or ten years ago. So you have a couple of things happening. You have states under financial pressure, and a few of the states have, you know, added some increases sports betting as you’ve seen for tax rates like Illinois. But what you’ll see is that that incremental amount is a small amount of incremental tax base compared to what it would be like to to add, gaming, iGaming as a you know, three to four times more volume will come through iCasino.

So the taxes generated from iCasino are gonna blow away anything you get from increasing a tax rate of sports betting. But I think the signs that are there that when governors are looking for everything they can and they’re looking at sports, can we add a little bit here and there? It’s sort of indication of validation that, okay, that’s sort of run its course. Now the way to really generate meaningful revenues and the taxes for the state is through, like, I I can see no legalization. So you have the financial pressure, number one.

Number two, I would argue that you didn’t have this existence as widely known as you have today of these sort of social sweepstakes casinos that are live and operating in every state nearly. A bunch of states have started to write cease and desist letters, and these are kind of loopholes that allow some companies to try to unlicensed, unregulated, untaxed, operate essentially online casino sites. So in these states, when we talk to governors or legislators or lobbyists, it’s like, hey. Online casino’s already legal in your state with zero benefit. You’re not doing any taxes.

You’re not protecting your consumers. They’re they’re they’re targeting, in many cases, underage people. It’s a real problem, and you already have it here. So why is it more regulated and create a framework where you tax it and protect your consumers? And I think it’s a very compelling argument that’s existing now that’s much more visible than it was in the past.

So those two things are very powerful. And the third thing is that you have a large number of of online or casino groups that have identified that iGaming online gaming is complementary to land based. I mean, you’ve had Caesars and MGM and Hard Rock, very large established successful land based companies operating in New Jersey for many, many years now, the benefits iGaming has in comp to complement land based. And I think as you start to see more and more casinos that have been active in this industry recognize and appreciate the value, the data is showing once again that the states make more money, period, from online gaming legalization. So that momentum, I think the alignment of the industry stakeholders on our competitors and ourselves to focus on this as a priority is something that’s also driving and drive results.

Because arguably in the past, there’s a lot more focus on sports for sports, but I think as more financial pressures are there for companies in our industry to continue to grow their profits, I think everyone’s recognizing how important iGaming is in that process. And so there’s a lot more effort and alignment among industry peers to work together to legalize online casino.

Chad, Oppenheimer Analyst, Oppenheimer: Got it. And then it may makes sense. So is is the headwind then, does it come from some of the trade unions? I know in New York, it seems like the hotel union, you know, maybe they’re they’re a little more in the governor’s ear. In Illinois, is it is it the VGT, like the video game terminals you hear about their unions?

Like, it see it seems like there’s some other specialty interest groups you guys are competing against because, you know, on the surface, it seems like a no brainer. Right? Like, New York’s facing a massive deficit again. Like, might as well legalize iGaming. Like, can you just talk about as as more of the unions you’re you’re dealing with?

Richard Schwartz, CEO, Rush Street Interactive: Well, there’s always protectionism, and every state has their own interest groups that have their own interest in having things maybe stay the same the way they are and out of online gaming. You know, arguably, you know, large number of the land based folks are supporting it are just protectionists in general. It’d be like, you know, Walmart, say, and Amazon can’t, you know, operate in your state because we want Walmart to be the sole source of selling products. Ultimately, the consumers speak, and the consumers want these extra services. And so I think that’s a example where, ultimately, I think that won’t won’t be the winning, argument because it rarely is.

I think every state has their own unique interest. You’re right in New York. There’s, there’s unions that are concerned about, online casino impact from the land base. Although you will see in these markets that land based revenues stay the same. They don’t they don’t drop.

In many cases, they go up a little bit. So you haven’t seen a loss of jobs or loss of revenue from online. If only it adds, like I said, to the overall pie of revenues the state generates. So, certainly, I think that each state has its own unique set of players and circumstances, and each one has to be really focused on on a case by case basis. But I think you identified a couple, examples of things that have been real and are, opportunities for the industry to come together and say, well, how are we gonna address this?

Chad, Oppenheimer Analyst, Oppenheimer: Got it. And, I don’t wanna put you on the spot. Are there any states you’re you’re a little more bullish on over the next eighteen to twenty four months we should be paying attention to?

Richard Schwartz, CEO, Rush Street Interactive: Yeah. I don’t think I would share it too much more. I think whenever I sort of thought maybe something, it hasn’t really materialized, and to be honest, so it’s a it’s a taking bets on this is a hard as a sportsman, wanna take bets on this. But I I just think I used to look at the states that have a larger deficit, and ones that haven’t legalized online because, you know, casino, obviously. Ones that have sports betting are probably easier because you already have a regulatory framework set up.

You already have all the licensed entities set up. You already have the executives license. It’s really just adding a server, which could be done servers, which could be done very quickly and efficiently. So I think those are really great opportunities. I think states that are really heavy in the Medicaid, situation are gonna really, you know, there’s no way around it.

You have to find incremental sources of revenue, and where sitting on the shelf is a very convenient, easy, reliable, consistent way of doing that. So I think those are the states I would maybe focus more on.

Chad, Oppenheimer Analyst, Oppenheimer: Got it. And then you mentioned Alberta’s opening up, sometime potentially sometime next year. I think Canada is just a little bit of a different beast because you do have some gray market operators already operating there in in certain states. So how do you sort of think about the investment in in sort of going in in in town state like Alberta? You know, I think, you know, you know, some of the larger sports betting first companies have put some pretty large numbers on what they’re willing to spend in Alberta.

So can you just talk about your strategy there with large capitalized competitors and then the gray market operators as well?

Richard Schwartz, CEO, Rush Street Interactive: Think everything you just described is a similar thing that was described for Ontario before we entered that market a couple years ago, and we’ve done really, really well in Ontario. I don’t Perhaps, Kyle, you wanna, you know, share a couple thoughts. Mean, for example, like, we were profitable within the first, you know, four quarters of launching there, which has been pretty standard for us in markets like casinos. So I think, you know, we’re we’re excited for Alberta. And I think we’ve always been competing with companies that are have big budgets, but we seem to do extremely well.

And we continue to carve out our our our fair share and do it in a profitable, smart way. But I don’t know, Kyle, maybe you have something else you wanna add about it.

Kyle Sauers, CFO, Rush Street Interactive: Yeah. And I think I think you you made all the right points. I mean, we have consistently when we launch iCasino markets in North America, we’ve been we’ve been profitable by the fourth quarter of operations. So we’ll make the appropriate investment. We haven’t said exactly what what that’ll be, and and and we’ll figure that out as we get closer.

But it’ll it’ll be commensurate with the opportunity for sure. You’re right, Jed, that there’s there’s likely to be a little more competition because of the the gray market that exists there just like it did in Ontario. And so so and when you look at Ontario, we’ve we’ve done quite well there given the investments we’ve made. And actually, this past quarter, you know, grew at 25% plus, and that was, the fastest growth we’ve had in a long time in Ontario. So lot of opportunity up in Canada for sure for us.

Chad, Oppenheimer Analyst, Oppenheimer: Got it. And then, before we get we before I I get over to, Latin America, just can you you talk about the sports strategy? You know, what do you think about Missouri? You know, just just where you are in sports betting. You’ve you’ve done a nice job with the podcast.

I know you have Mike Francis on the platform. So just something you can talk about, you know, how you how sports fits into the strategy.

Richard Schwartz, CEO, Rush Street Interactive: Yeah. So like like poker, it’s important to have sports as a comp as a product that, is is part of the mix. And as I referenced earlier, a lot of states don’t allow online casinos. You have sports that are allowed, and some of those states are gonna add, like, casinos. So being in those markets with a presence is important, I think, from a early start opportunity and could cross sell from the existing sports book players to casino, which we know is is a proven method of acquisition of new customers.

Our quality of our products continue to improve. We have we have teams dedicated to that. We keep launching all kinds of innovations in that marketplace. The most recent one was, something called prop packs. It was really exciting.

It kind of brings the the fun of collecting baseball card packs and cards from baseball packs, players are ripping cards when they make a sports book with bet with us on a single game parlay. They’re getting these, cards, let’s say, in the basketball. And if you get a LeBron James card, then and you follow that how LeBron James does in the game you bet on. If he performs over 10 points, you win a small prize. 20 points, you get a larger prize.

If he scores 50 points in the game that you have his card for, you’re gonna earn you know, win $10,000. So I think we’ve created, like, really fun dynamics and engaging tools that are differentiated. And a lot of the things that we’ve done well at casino, we’ve we’ve leveraged and applied properly to the sports book area to kinda create some differentiation. At the end of the day, that’s value we’re giving back to customers because they’re making the same general bet with us on the semi parlay as you make anywhere else. But with us, you’re not only getting that parlay bet down, but you’re getting this extra chance to win through a fun prop act mechanic that’s unique for us.

So I think that those kind of mechanics, we have those football squares ones, and we apply that to basketball. We have a lottery mechanic. It’s really fun and exciting because it differentiates our user experience. So I think we continue to grow nicely. Listen.

We grew, you know, or we grew with a fifth 815%. 15%, sports book last year over year last quarter, and we’ve had a lot of nice growth over the last year or two in sports despite, as Kyle referenced earlier, not investing a whole lot in the sports category, which is an indication that the product’s good and the service is great that we offer. And we we think that’s a very important part of our business, but it isn’t the engine that’s gonna generate the profits that we, are counting on and that we’ve been delivering the last couple of years, improvements in the BEBITDA and the record EBITDA we’ve been hitting quarter after quarter. It’s really been driven by casino first, and we know where our engine is, and we’re focusing on making sure we develop unique product experiences first that drive the the differentiation in casino because we know that’s gonna end end up being the the thing that matters most for us.

Kyle Sauers, CFO, Rush Street Interactive: Yeah. And I I would just, add there. You know, Rich is right about the profitability engine for sure, But sports sports is profitable for us in North America, so it it’s a good business for us to be in. I think the last thing I would add, and you you know who you’re gonna shift to Latin America, so it’s it coincides well with that. But we’ve got a great product that’s been developed to compete really well, in North America, although it’s harder with the brands and the databases that we compete against.

We take that same great product and put that in Latin America, and it’s a super competitive product, and it’s a huge part of our business, certainly in Colombia. So it it’s it’s important for us overall for the business. No question about it.

Chad, Oppenheimer Analyst, Oppenheimer: Got it. And then just just shifting to Latin America, hard to handicap what’s going on with with with Colombia with with with value added tax. But as we kinda look and and you get through this year, whether or not that tax stays in place, it has seemed it assumes that the comps improve a lot because even if it stays in place, you’re now comping that structural change from last year. Is that is that the right way investors should be looking at it, or or how should we be thinking about Columbia?

Kyle Sauers, CFO, Rush Street Interactive: Yeah. So maybe for for those that haven’t been as close to it, there is this there’s this temporary VAT that’s in place. It’s on deposits, 19%. And the way we and the rest of the industry had had responded is by making up that tax to the players through extra bonusing. So that’s had a real, headwind on our net revenue.

Our gross gaming revenue, which includes, the losses of the bonus extra bonusing money, but GGR has been growing well over 50% in the first half of the year, which means that headwind on revenue is is some something in that range and obviously impacts EBITDA fairly dramatically. So every every sign that we see and and our expectation is that it does go away as of the end of this year as as it’s been decreed, and that there won’t be a tax like this in place next year. That’s what our guidance assumes as well for for 2025. But to your point, if if if that were still in place for some reason, the comps would get easier, assuming we’re still growing GGR in a nice clip, which we would expect to be doing. But I think the other piece of it is if there’s indications to the industry that there’s that for some reason, there is some sort of tax in 2026, I think the industry is likely to respond a little differently in terms of the way they’re doing the bonus scene.

And and we’ll see how that plays out and how we how we would respond competitively and what’s gonna be best for our customers, but also, for us to run a, you know, a profitable business.

Chad, Oppenheimer Analyst, Oppenheimer: And I think what

Richard Schwartz, CEO, Rush Street Interactive: Just one quick thing on South America for next year is that just a reminder, it’s a World Cup year, and it’s really exciting for our markets. We’re operating, as you know, in Mexico, Colombia, Peru, large population markets that have good soccer teams that we’re gonna be in the same time zone next year as the World Cup is, which makes betting on it, I think, even more appealing and attractive to wider audience. So I think it’s gonna be an exciting year of growth for the industry because of the World Cup. And for us, sports does very well for us in LATAM. So we’re excited for that opportunity to kinda grow the player base next year as part of that World Cup year.

Chad, Oppenheimer Analyst, Oppenheimer: And what are you top two, top three player in Colombia? And then I know you’re you’re you’re Mexican mark you’re you’re you’re expanding your Mexican market share. Just can you give us a a lay of the land on on sort of the key key countries you’re operating there?

Richard Schwartz, CEO, Rush Street Interactive: Sure. Yeah. In in in Colombia, we’re number two out of, you know, about 18 to 20 competitors typically, and we’ve grown, you know, consistently from day one. Really, I think, surprised the industry because really been no one else other than us has been able to merge out of the rest of the the groups to kind of gain gain market share in the two existing market leaders that own about 90% of the market together when we started. So we’ve we’ve now captured one of them, in terms of market share, and we’re continuing to perform extremely well in that market.

In Mexico, which is a much larger market opportunity long term than even Colombia’s given the, you know, the triple size of the population, we’ve now we keep growing share as well there. And and there a couple years ago, it took some time to kind of localize and customize the experience. And we’re now at the top seven in that market out of it’s probably I forgot how many we listed as competitors. Yeah.

Kyle Sauers, CFO, Rush Street Interactive: It it approaches 50 operators brand or brands. Yeah.

Richard Schwartz, CEO, Rush Street Interactive: Yeah. So nobody else gonna say 48, 50. So we’re right there near the merging of the top and hope to get the top five, some point soon. And, then we have Peru, which is a market that is the newest for us, and we’re in the process like we were in Mexico for a while. Just localizing, adding the right the right methods, pay for payments, right user flows, all the little things that aren’t that exciting to talk about but are critical for success.

And so we’d have that. We know what we need to do. We’ve done it before, and we’re in the process of doing it again.

Chad, Oppenheimer Analyst, Oppenheimer: And we’re coming up to, you know, last couple of minutes here. Just just on the the guidance, Kyle, I mean, I you know, you’ve you’ve been a very good beat and raise story for for a while now. Sort of implies I think the guys apply somewhat of a little bit of a back half deceleration. Is that more conservatism, or is that something, you know, there’s something going on we we should be looking at? Or can you just, you know, talk about the back half guidance on what you said on your two call q q call?

Kyle Sauers, CFO, Rush Street Interactive: Sure. So I’ll I’ll I’ll start by agreeing with you that we’ve I think we’ve been fortunate to be able to beat and raise pretty pretty consistently. And so, obviously, we’re always always hoping to be able to achieve that in the next quarter and following quarters. I think when you think about the back half versus the first half in terms of growth, we did you know, we we lapped Delaware at the beginning of this year, so it’s logical that that growth rate should should slow over time. We can’t we’re not gonna grow any 80% in perpetuity.

I think when you look at Columbia, we had a a real strong back half in Columbia last year, so there’s a, the comp is a little tougher. We’ve still got the VAT in place, as you know, so that that provides a little bit of extra variability. Sequentially, you know, q two, we had a little bit of help from from favorable sports outcomes, probably helped us by 5,000,000 in in The US, something like that. And then I think to your point about conservatism, you know, we’re and back to the the beginning of the call, we’re operating in all these markets, right, casino that are growing so fast and continue to outpace everybody’s expectations, probably including our own for the for the industry growth. So if we continue to see growth like that, like we did in the first half of the year, and we get our fair share, which we would expect to do, then I think there’s probably there’s probably upside in there because we’re just not building in, you know, 25, 30% plus growth in those markets for for, the remainder of the year.

Chad, Oppenheimer Analyst, Oppenheimer: Got it. And so just the final question. You know, do you think there’s anything in the Rush Street story that you investors are misinterpretating or anything important we we didn’t cover on this on this discussion?

Richard Schwartz, CEO, Rush Street Interactive: I think the quality of our user experience is just hard to understand as an investor on the casino side because very few investors live in the States where we operate. And even if you live in a state we operate, you have to play decent amounts to really appreciate all the things that we do. Many things that we do on the product, we don’t do for a new customer. We kind of wait for the the moment to deliver an experience to a customer that we think is likely to be a more valuable customer for us in the future. So I think it’s just the concept that a lot of, companies or investors don’t understand how if so many casino games are just plugging casinos just plug in games from third parties, like I said earlier, that seems pretty mundane, very basic.

So how what are we doing that’s so different and creating that loyalty that we’re experiencing for our customers? And don’t forget, with the sports, you’re looking on the field of the play and the court to see the results. There’s a trust there. You’re already you don’t have to worry about, do I trust the results? You see them with your own eyes.

You know what the results are. And casino is a trust issue. Players think that your the operator is out to get them. Right? So how do we do little things to like, a one time play through requirement?

So when players get a bonus from us, once they bet at once, it’s theirs to take. Whereas a lot of our peers will make a player recycle that same bet 10 times before they can withdraw it. You can imagine how consumer feels when they’re having to go through multiple times. So I think there’s a wide range of tools that we have built over many years that are delivering this experience that truly makes an impact on the customer. We earn their trust, and then we earn their loyalty from engagement of tools that we build that others don’t offer.

And I think that’s underappreciated because I think a lot of investors aren’t that close to the product and don’t understand really why someone could build a differentiated experience when so much of the IP that is being used is from the same suppliers. But like I said at the beginning, we have unique differentiated IP that we have built over many years. Every couple months, we’re building new one new features, new tools, things that are just far beyond what you see in other sites. I think that’s the secret of our success, and I think that’s under underappreciated often by investors. But I think it’s starting to change, and I think the more focus that has been on iCasino and the growth here is that they got more investors looking more closely at the iCasino category.

Maybe those that are looking closer are starting to appreciate those nuances that we do that really make a difference for the player first mindset that we have. I don’t if there’s anything on the financial side, Kyle, you would add or anything else.

Kyle Sauers, CFO, Rush Street Interactive: No. I think I I think that’s a great summary. I think, people investors trust our story and understand the consistency of the iCasino business and the continued leverage that we’re gonna be able to get kinda throughout the entire, financial statement.

Chad, Oppenheimer Analyst, Oppenheimer: Well, we’ll we’ll leave it that. We’ll leave it there. Richard, Kyle, thanks for joining us. And, you know, very interesting story and pretty impressive what you’ve built and and looking forward to seeing what’s next. So thanks everyone for joining us today.

Richard Schwartz, CEO, Rush Street Interactive: Thanks, John. You too.

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