Brazil is gearing up to launch legal betting, with the market due to open on 1 January 2025. Rush Street is keen to be part of the action as CEO Richard Schwartz said on its Q2 earnings call.
Brazil’s ministry of finance’s Secretariat of Prizes and Bets (SPA) has now published the final gambling regulations. However, RSI CEO Richard Schwartz insists the operator will not rush into the market.
“Brazil is a large and exciting market,” Schwartz said in the post-Q2 call. “There’s lots of moving parts there. It’s very important that we sort of remain disciplined and more thoughtful about how we approach the market."
“We are awaiting clarity on several items including the tax framework and how the grey market will be treated post-regulation. Again, our strategy has been to maintain certain levels of fiscal discipline in all markets, both new and existing. Brazil will be no different.”
Latin America success a highlight for RSI in Q2
Schwartz’s comments on Brazil come after a successful Q2, with growth in Latin America a particular highlight.
Group revenue for the three months to 30 June was US$220.4m, a rise of 33.5%. This includes US$218.8m from online casino and sports betting, US$1.1m social gaming and US$461,000 retail sports betting.
While the majority (US$188.5m) of revenue came from the US and Canada, up 28.6%, the LatAm contribution grew rapidly. Revenue from the region was up 72.4% to US$31.9m.
This level of growth was similar in terms of monthly active users (MAUs), which increased 20% in the US and Canada to 176,000. In Latin America, this growth was much steeper at 72% up to 224,000, from two markets.
“While the vast majority of this revenue growth comes from Colombia and Mexico we continue to see solid growth and remain ahead of where we were at the same point in time post launch to our start in Colombia,” Schwartz said.
RSI’s footprint in the region is starting to grow, with last week’s roll-out in Peru.
“Peru is a market we are excited about,” Schwartz said. “It is about two-thirds of the population of Colombia with slightly higher GDP per capita. We believe we are well-positioned for success there given the marketing adjacencies and overlap with Colombia, existing brand recognition and the established teams in Latin America we will leverage. I will add there are other markets in Latin America that we continue to evaluate.”
RSI narrows losses in H1
Looking at the first half as a whole, group revenue was up 33.7% to US$437.8m. This comprises US$434.5m from online casino and sports betting, social gaming US$2.2m and retail sports betting US$1.2m.
Revenue in the US and Canada climbed by 28.7% to $377.4m, while in Latin America and Mexico revenue increased 78.3% to US$60.8m.
RSI was able to post a US$5.7m operating profit, compared to last year’s US$36.4m loss, while adjusted EBITDA transformed from a US$7.4m loss to a positive of US$38.5m.
After taxes and financial times the operator whittled its net loss to just US$827,000, compared to a US$12.4m loss in the previous year.
RSI raises guidance after strong H1
After such a successful first half the operator increased full-year guidance for the second consecutive quarter.
In the 12 months to 31 December, Rush Street Interactive expects revenue to hit between US$860m and US$900m. This is up from revised guidance of US$810m to US$860m issued after Q1, with the midpoint of the latest guidance being 21.0% higher year-on-year.
Adjusted EBITDA is now expected to range from US$62m to US$72m, up from Q1’s figures of US$50m to US$60m. The midpoint of the new range – US$68 – would be up 729.3% from last year.
“We are very excited about the opportunity to continue to scale the business and drive growth on the back of our current momentum, which includes increasing our adjusted EBITDA guidance,” Schwartz said.
“Looking forward, we remain energised in our view that the team is primed to continue executing on our strategy and delivering value to shareholders.”
Source: iGB
