During the first quarter, Rush Street Interactive achieved record monthly active users or MAUs in LatAm. However, the new VAT or value-added tax in Colombia hit NGR.
Recently, Rush Street Interactive released its Q1 results. It revealed a 21% year-on-year increase in revenue to $262.4 million. Meanwhile, the business swung from a $2.2 million loss in Q1 2024. It posted a net profit of $11.2 million in Q1 this year.
First quarter monthly active users or MAUs hit 354,000 which is a quarterly record for Latin America as whole. Rush Street Interactive also posted a record number of MAUs in Colombia. This came despite the February introduction of a 19% VAT on online gambling operators in the country.
Richard Schwartz, CEO of Rush Street Interactive, explained this on the post-results analyst call. He said the company chose to absorb the tax impact through bonusing. It did this instead of passing the cost onto players.
As a result, he said Rush Street Interactive retained its market share in Colombia. The company also kept GGR levels near all-time highs. GGR was up 55% in local currency.
Yet, Kyle Sauers, CFO, explained other financial metrics like NGR were falling short of base expectations in Colombia. Meanwhile, average revenue per MAU across Latin America fell to $36. This was down from $44 in the first quarter of the previous year.
Sauers said that in each of March and April, their net revenue growth was significantly impacted. So, in March, their net revenue in US dollars was actually down slightly year-over-year. And in April, it’s been about flat year-over-year.
He added that they have a market that might have otherwise been growing at 50%. Instead, it’s now relatively flat year-over-year because of this temporary VAT tax.
The Colombian government implemented the VAT in February. It temporarily eliminated the exemption for online gambling operators. The government claimed it needed the extra funds to cover costs of responding to civil unrest in the Catatumbo region.
