Why Rush Street Interactive's (RSI) Q3 Outperformance Makes It a Strong Buy for 2025

The online gaming sector is entering a transformative phase, driven by regulatory tailwinds, technological innovation, and shifting consumer preferences. Amid this backdrop, Rush Street Interactive (RSI) has emerged as a standout performer, leveraging its strategic focus on high-margin verticals, disciplined marketing, and market expansion to deliver exceptional Q3 results in both 2024 and 2025. With revenue growth, user acquisition, and EBITDA expansion outpacing industry benchmarks, RSI's trajectory underscores its potential as a long-term growth engine for investors seeking exposure to the digital entertainment boom.

Q3 2024: A Foundation for Sustained Momentum

RSI's Q3 2024 earnings report laid the groundwork for its 2025 outperformance. The company reported revenue of $232 million, a 37% year-over-year increase, driven by a 28% rise in U.S. and Canadian Monthly Active Users (MAUs) and a 122% surge in Latin American MAUs. Adjusted EBITDA surged over fivefold to $23 million, reflecting operational efficiency and margin expansion. These results prompted RSI to raise its full-year 2024 revenue guidance to $900–$920 million and EBITDA guidance to $82–$86 million, signaling confidence in its ability to capitalize on market dynamics.

The company's strategic pivot toward online casino gaming-where margins are significantly higher than in sports betting-has been a key differentiator. As noted in RSI's earnings call, this focus has enabled the firm to achieve consistent outperformance, even as competitors grapple with regulatory uncertainties and lower-margin offerings.

2025 Acceleration: Strategic Initiatives Fuel Growth

By Q3 2025, RSI's momentum had intensified. Revenue reached $278 million, a 20% year-over-year increase, with U.S. and Canadian MAUs in online casino markets growing 46%. The company raised its 2025 full-year revenue guidance to $1.10–$1.12 billion, projecting a 20% year-over-year growth at the midpoint of the range, and Adjusted EBITDA guidance to $147–$153 million, reflecting 62% growth.

This acceleration is underpinned by three strategic pillars:
1. Product Differentiation: RSI's emphasis on online casino gaming has allowed it to capture a larger share of high-margin revenue. For instance, first-time depositors in Q3 2025 exceeded previous records by over 10% without increasing marketing spend, highlighting the effectiveness of its customer acquisition model.
2. Market Expansion: Regulatory developments, such as the anticipated launch of iGaming in Alberta and legislative progress in the U.S., are unlocking new revenue streams. Management has also prioritized Latin America, where Colombia's tax challenges are expected to ease in 2026, further boosting growth.
3. Operational Excellence: RSI's disciplined approach to marketing and cost management has amplified profitability. By optimizing customer acquisition costs and enhancing user retention, the company has maintained strong EBITDA margins despite competitive pressures.

Industry Tailwinds: A Booming Sector for Long-Term Gains

RSI's performance aligns with broader industry trends. The global online gaming market is projected to grow at a compound annual growth rate (CAGR) of 9.46% through 2032, reaching $424.14 billion. North America and Europe, in particular, are benefiting from regulatory liberalization, with the U.S. legalizing online gambling in key states and the EU streamlining cross-border licensing. These developments create a favorable environment for RSI, which operates in both regions and is well-positioned to scale as markets mature.

Technological advancements, such as cloud gaming and generative AI in game development, are further enhancing user engagement and monetization. RSI's ability to integrate these innovations-while maintaining a focus on high-quality customer experiences-provides a durable competitive edge.

Why RSI Is a Strong Buy for 2025

RSI's combination of revenue growth, margin expansion, and strategic agility makes it a compelling investment. The company's Q3 2025 results, coupled with its raised guidance, demonstrate its capacity to outperform in a rapidly evolving sector. Additionally, RSI's Q3 2024 results and guidance announcement in 2024, including its $50 million share repurchase authorization, reinforce its commitment to shareholder value.

For investors, the case for RSI is further strengthened by its alignment with macroeconomic trends. As online gaming adoption accelerates and regulatory barriers fall, RSI's focus on high-margin verticals and operational efficiency positions it to capture a disproportionate share of the market's growth. With a projected 20% revenue increase in 2025 and a robust EBITDA outlook, the company offers both near-term visibility and long-term scalability.

Conclusion

Rush Street Interactive's Q3 outperformance is not an anomaly but a reflection of its strategic foresight and execution excellence. By capitalizing on industry tailwinds, expanding into high-growth markets, and prioritizing profitability, RSI has established itself as a leader in the online gaming sector. For investors seeking a high-conviction play on the digital entertainment revolution, RSI's combination of earnings momentum and sustainable growth makes it a strong buy heading into 2025.