RSI Surges on Casino Growth, Navigates Regulatory Crosswinds

Rush Street Interactive Inc (RSI) delivered a strong third-quarter performance in 2025, with revenue surging 20% year-over-year to $277.9 million, surpassing analyst estimates by 4.3% in its Q3 earnings highlights. The company attributed this growth to robust expansion in its online casino segment, which saw a 34% year-over-year revenue increase, according to a Seeking Alpha report. Adjusted EBITDA rose 54% to $36 million, reflecting improved operating leverage, as noted in the Q3 earnings highlights. RSI raised its full-year 2025 revenue guidance to a range of $1.1 billion to $1.12 billion, up $35 million at the midpoint, signaling confidence in sustained momentum despite regulatory challenges.

North American operations drove much of RSI's success, with monthly active users (MAUs) jumping 34% to 225,000, according to the Q3 earnings highlights. Online casino markets in the region accounted for 46% year-over-year MAU growth, fueled by record first-time depositor numbers, as highlighted in the Seeking Alpha report. CEO Richard Schwartz highlighted the "resilience of our business model" during the earnings call, noting that the company's proprietary technology platform enhanced customer acquisition and retention.

Conversely, Latin America faced headwinds. Revenue in the region fell 11% year-over-year, primarily due to Colombia's temporary VAT tax, which depressed net revenue by 27%, per the Q3 earnings highlights. Mexico's market, however, showed promise, with revenue growing over 100%, as noted in the Seeking Alpha report. Management expressed cautious optimism about resolving tax uncertainties in both regions, with Schwartz stating that congressional support for proposed tax reforms appeared insufficient in the earnings call transcript.

RSI's strategic focus on product innovation and regulatory advocacy is central to its growth strategy. The company elevated Kyle Sauers to President and CFO, emphasizing marketing efficiency and operational discipline, according to the Seeking Alpha report. Sauers noted that marketing expenses grew only 1% year-over-year to $38.1 million while acquiring new players at "attractive rates," as mentioned in the Q3 earnings highlights. Analysts have taken note: Jefferies recently raised its price target to $27 per share, maintaining a "Buy" rating, while Zacks upgraded RSI to "Strong Buy."

The stock has gained 36.3% year-to-date, outpacing the S&P 500's 17.2% return, according to the Zacks note. This optimism is tempered by risks, including potential gaming tax increases in Mexico and competition from unregulated sweepstakes operators, noted in a TradingView analysis. Schwartz acknowledged these challenges during the earnings call, advocating for states to "legalize and regulate online casino gaming to protect consumers and increase tax revenue" in his Schwartz's remarks.

RSI's full-year adjusted EBITDA guidance now stands at $147 million to $153 million, a 62% increase at the midpoint, as reported in the Q3 earnings highlights. The company is preparing for expansion into Alberta, Canada, and remains optimistic about U.S. online casino legalization trends, according to the Seeking Alpha report. While regulatory uncertainties persist, RSI's financial position—$273 million in unrestricted cash and no debt, per the Q3 earnings highlights—provides flexibility to navigate short-term challenges.

For now, the focus remains on capitalizing on its North American success while mitigating Latin America's regulatory risks. As one of the industry's leading operators, RSI's ability to balance innovation with compliance will be critical to sustaining its upward trajectory.