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What changed in Rush Street Interactive, Inc.'s 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of Rush Street Interactive, Inc.'s 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+378 added−372 removedSource: 10-K (2026-02-18) vs 10-K (2025-02-28)

Top changes in Rush Street Interactive, Inc.'s 2025 10-K

378 paragraphs added · 372 removed · 322 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

106 edited+14 added−6 removed138 unchanged
Biggest changeWe believe that more states either have and will consider authorizing online casino for the following reasons, among others: • We believe that macroeconomic factors such as inflation and/or an economic slowdown has resulted in increased expenses and/or reduced tax revenue in many states, increasing the need for new sources of tax revenue. • We believe that general consumer adoption of digital activity, including online gaming, increased since 2020. • Online casino generated more tax revenue compared to online sports betting in Connecticut, Michigan, New Jersey, Pennsylvania and West Virginia in 2024, meaning authorizing online sports betting alone may not optimize tax revenue. • We believe that the land-based casino industry, an important stakeholder in many states, generally has shown a wider acceptance of online casino.
Biggest changeWe believe that more states either have and will consider authorizing online casino for the following reasons, among others: • We believe that macroeconomic factors such as inflation, tariffs and/or an economic slowdown has resulted in increased expenses and/or reduced tax revenue in many states, increasing the need for new sources of tax revenue. 12 • We believe that general consumer adoption of digital activity, including online gaming, increased since 2020. • Online casino generated more tax revenue compared to online sports betting in Connecticut, Michigan, New Jersey, Pennsylvania and West Virginia in 2025, meaning authorizing online sports betting alone may not optimize tax revenue. • We believe that the land-based casino industry, an important stakeholder in many states, generally has shown a wider acceptance of online casino. • Certain states may receive less financial support from the federal government, which could lead to states exploring alternative revenue sources such as legalizing online casino. • With the growing prevalence of sports-based prediction markets (i.e., events contracts focused on sporting events), which are not currently subject to state gaming taxes, certain states may experience reduced gaming tax revenues from online sports betting.
Jurisdiction Online Casino Online Sports Betting Retail Sports Betting Domestic: Arizona ü Colorado ü Delaware ü ü Illinois ü ü Indiana ü ü Iowa ü Louisiana ü Maryland ü ü Michigan ü ü ü New Jersey ü ü New York ü ü Ohio ü Pennsylvania ü ü ü Virginia ü ü Washington ü West Virginia ü ü International: Colombia ü ü Ontario (Canada) ü ü Mexico ü ü Peru ü ü 3 Our real-money online casino and online sports betting offerings are generally provided under our BetRivers and PlaySugarHouse brands in the United States and Canada and under our RushBet brand in Latin America (which includes Mexico).
Jurisdiction Online Casino Online Sports Betting Retail Sports Betting Domestic: Arizona ü Colorado ü Delaware ü ü Illinois ü ü Indiana ü ü Iowa ü Louisiana ü Maryland ü ü Michigan ü ü ü New Jersey ü ü New York ü ü Ohio ü Pennsylvania ü ü ü Virginia ü ü Washington ü West Virginia ü ü International: Colombia ü ü Ontario (Canada) ü ü Mexico ü ü Peru ü ü Our real-money online casino and online sports betting offerings are generally provided under our BetRivers and PlaySugarHouse brands in the United States and Canada and under our RushBet brand in Latin America (which includes 3 Mexico).
We believe our TAM is larger than most North America-only operators because of our international real-money online gaming and betting operations in Colombia, Mexico and Peru as well as our flexible business model as described directly above. We believe this experience will help us enter other Latin American markets and beyond. Broad Demographic Appeal of our Brands & Products.
Because of our international real-money online gaming and betting operations in Colombia, Mexico and Peru as well as our flexible business model as described directly above, we believe our TAM is larger than most North America-only operators. We believe this experience will help us enter other Latin American markets and beyond. Broad Demographic Appeal of our Brands & Products.
We also provide social gaming (where permitted) where users can earn or purchase virtual credits to enjoy free-to-play games. Our revenue is predominantly generated from our U.S. and Canada operations, with the remaining revenue being generated from our Latin America (including Mexico) operations. See Note 3 to our consolidated financial statements, included elsewhere in this Annual Report.
We also provide social gaming where users can earn or purchase (where permitted) virtual credits to enjoy free-to-play games. Our revenue is predominantly generated from our U.S. and Canada operations, with the remaining revenue being generated from our Latin America (including Mexico) operations. See Note 3 to our consolidated financial statements, included elsewhere in this Annual Report.
Furthermore, our second amended and restated certificate of incorporation (our “Charter”) provides that any equity interests of RSI owned or controlled by an unsuitable 19 person or its affiliates will be subject to mandatory sale and transfer to either RSI or one or more third party transferees and in such number and class(es)/series of equity interests as determined by our Charter in good faith (following consultation with reputable outside and independent gaming regulatory counsel) pursuant to a resolution adopted by a majority of our Board of Directors (the “Board”).
Furthermore, our second amended and restated certificate of incorporation (our “Charter”) provides that any equity interests of RSI owned or controlled by an unsuitable person or its affiliates will be subject to mandatory sale and transfer 19 to either RSI or one or more third party transferees and in such number and class(es)/series of equity interests as determined by our Charter in good faith (following consultation with reputable outside and independent gaming regulatory counsel) pursuant to a resolution adopted by a majority of our Board of Directors (the “Board”).
These practices, resources and services include deposit limits, voluntary restrictions on access and use of certain offerings, temporary self-exclusion and cooling-off periods, voluntary permanent exclusion from our offerings and applications and data science technology, which helps us flag any suspicious, abnormal or problematic betting activity. We also generally 22 participate in self-exclusion registers where they are in operation.
These practices, resources and services include deposit limits, voluntary restrictions on access and use of certain offerings, temporary self-exclusion and cooling-off periods, voluntary permanent exclusion from our offerings and applications and data science technology, which helps us flag any suspicious, abnormal or problematic betting activity. We also generally participate in self-exclusion registers where they are in operation.
While many other large U.S. industries (i.e., banks, retail stores, movies, etc.) digitalized over a decade ago, the U.S. gaming industry has just started to do so more recently; and • Expanding support and acceptance from other industry stakeholders, including sports teams and leagues, Native American tribes, media companies and financial institutions.
While many other large U.S. industries (i.e., banks, retail stores, movies, etc.) digitalized over a decade ago, the U.S. gaming industry has started to do so more recently; and • Expanding support and acceptance from other industry stakeholders, including sports teams and leagues, Native American tribes, media companies and financial institutions.
Additionally, we were the first company to launch (or among the first to launch if multiple 11 operators launched on the same day) online or retail sports betting in many of the markets in which we operate, which we believe has allowed us to acquire customers at a lower cost than we could have if launching in a more mature market.
Additionally, we were the first company to launch (or among the first to launch if multiple operators launched on the same day) online or retail sports betting in many of the markets in which we operate, which we believe has allowed us to acquire customers at a lower cost than we could have if launching in a more mature market.
Specifically, in the North American and Latin American online casino and sports betting space (our primary market), our competitors come from two main groups – (i) established online-first companies and (ii) bricks-and-mortar casino and similar gaming establishments that have online operations. We compete on a number of factors across our B2C offerings.
Specifically, in the North American and Latin American online casino and sports betting space (our primary market), our competitors come from two main groups – (i) established online-first companies and (ii) bricks-and-mortar casino and similar gaming establishments that have online operations. 16 We compete on a number of factors across our B2C offerings.
We also offer our team members opportunities to get involved with various charitable and community organizations through volunteering and sponsorships. We have built a team of talented industry professionals, primarily focused on technology and operations, who are supported by a high caliber senior management team with significant experience in the gaming industry.
We also offer our team members opportunities to get involved with charitable and community organizations through volunteering and sponsorships. We have built a team of talented industry professionals, primarily focused on technology and operations, who are supported by a high caliber senior management team with significant experience in the gaming industry.
Based on research and customer feedback, we attempt to address customer concerns about the general lack of transparency in the industry around awarding, redeeming and tracking bonuses by enabling customers to easily track their loyalty and bonus progressions and giving customers control over when and how to redeem their rewards.
Based on research and customer feedback, we attempt to address customer concerns about the general lack of transparency in the industry around awarding, redeeming and tracking bonuses by enabling customers to easily track their loyalty and bonus progressions and giving them control over when and how to redeem their rewards.
For our poker game offerings, like land-based card rooms that are typically incorporated in land-based casinos, we are generally not exposed to the risks of game play or the outcome of the game as players are not playing against the house 8 but are instead playing against each other on a peer-to-peer basis.
For our poker game offerings, like land-based card rooms that are typically incorporated in land-based casinos, we are generally not exposed to the risks of game play or the outcome of the game as players are not playing against the house but are instead playing against each other on a peer-to-peer basis.
Product-Specific Licensing Online Casino North America We currently offer online casino in Delaware, Michigan, New Jersey, Ontario (Canada), Pennsylvania and West Virginia, pursuant to licenses granted by the Delaware State Lottery Office, Michigan Gaming Control Board, New Jersey Division of Gaming Enforcement, the Alcohol a Gaming Commission of Ontario (the “AGCO”), the Pennsylvania Gaming Control Board and the West Virginia Lottery, respectively.
Product-Specific Licensing Online Casino North America We currently offer online casino in Delaware, Michigan, New Jersey, Ontario (Canada), Pennsylvania and West Virginia, pursuant to licenses granted by the Delaware State Lottery Office, Michigan Gaming Control Board, New Jersey Division of Gaming Enforcement, the Alcohol and Gaming Commission of Ontario (the “AGCO”), the Pennsylvania Gaming Control Board and the West Virginia Lottery, respectively.
Every online gaming customer is automatically enrolled in our iRush Rewards Loyalty Program, where they earn tier points, loyalty points, and bonus store points with every completed bet. Our tiered system, including gold, platinum, and black levels, is designed to ensure that players receive consistent and valuable rewards.
Every online gaming customer is automatically enrolled in our iRush Rewards Loyalty 4 Program, where they earn tier points, loyalty points, and bonus store points with every completed bet. Our tiered system, including gold, platinum, and black levels, is designed to ensure that players receive consistent and valuable rewards.
Sports betting in the United States is subject to additional laws, rules and regulations at the state level. See “ Risk Factors — Risk Related to Government Regulation — Our business is subject to numerous U.S. and foreign laws and regulations, many of which are unsettled and still developing.
Sports betting in the United States is subject to additional laws, rules and regulations at the state level. See “ Risk Factors — Risks Related to Government Regulation — Our business is subject to numerous U.S. and foreign laws and regulations, many of which are unsettled and still developing.
We operate and/or support retail sports betting for our bricks-and-mortar partners primarily under their respective brands. Many of our social gaming offerings are marketed under our partners’ brands, although we also offer social gaming under our own brands as well.
We operate and/or support retail sports betting for our bricks-and-mortar partners primarily under their respective brands. Many of our social gaming offerings are marketed under our partners’ brands, although we offer social gaming under our own brands as well.
Our corporate culture focuses heavily on valuing employees and enabling them to grow, succeed and take on roles and projects that utilize their strengths. Recognizing our people’s accomplishments, both professionally and personally, is also crucial to our corporate culture.
Our corporate culture focuses heavily on valuing employees and enabling them to grow, succeed and take on roles and projects that utilize their 7 strengths. Recognizing our people’s accomplishments, both professionally and personally, is also crucial to our corporate culture.
We provide our customers with an array of leading gaming offerings such as real-money online casino, online sports betting and retail sports betting (i.e., sports betting services provided at bricks-and-mortar locations), as well as social gaming, which involves free-to-play games that use virtual credits that users can earn or purchase.
We provide our customers with an array of leading gaming offerings such as real-money online casino, online sports betting and retail sports betting (i.e., sports betting services provided at bricks-and-mortar locations), as well as social gaming, which involves free-to-play games that use virtual credits that users can earn or purchase (where permitted).
Only approximately 61% of the United States currently has access to online sports betting, per EKG. This fact is significant when one considers that according to the New Jersey Division of Gaming Enforcement, approximately 97% of the sports betting revenue in 2024 came via online betting. Populous states such as California and Texas have not yet legalized online sports betting.
Only approximately 61% of the United States currently has access to online sports betting, per EKG. This fact is significant when one considers that according to the New Jersey Division of Gaming Enforcement, approximately 97% of the sports betting revenue in 2025 came via online betting. Populous states such as California and Texas have not yet legalized online sports betting.
We also operate 23 retail shops or sports bar locations where customers can use provided terminals to place bets and make deposits and withdrawals. We operate pursuant to a concession contract with the Colombian gaming regulatory agency, COLJUEGOS. In Mexico, gaming (including sports betting) is regulated at the federal level through the SEGOB.
We also operate 22 retail shops or sports bar locations where customers can use provided terminals to place bets and make deposits and withdrawals. We operate pursuant to a concession contract with the Colombian gaming regulatory agency, COLJUEGOS. In Mexico, gaming (including sports betting) is regulated at the federal level through the SEGOB.
We strive to be the first online operator to launch in most new markets (or launch our online operations on the first day possible), and we have been successful in doing so in many markets such as Colorado, Delaware, Illinois, Indiana, New Jersey, Pennsylvania, Louisiana, Michigan, Maryland, New York, Ohio, Virginia, Peru (the first fully licensed operator to launch) and Ontario, Canada.
We strive to be the first online operator to launch in most new markets (or launch on the first day possible), and we have been successful in doing so in many markets such as Colorado, Delaware, Illinois, Indiana, New Jersey, Pennsylvania, Louisiana, Michigan, Maryland, New York, Ohio, Virginia, Peru (the first fully licensed operator to launch) and Ontario, Canada.
With Ontario being home to approximately 16.0 million people, representing approximately 39% of the total population of Canada, the other Canadian provinces present a large potential growth opportunity. We believe that our experience, contacts and success in Ontario positions us well to expand further in other Canadian markets when deemed appropriate.
With Ontario being home to approximately 16.2 million people, representing approximately 39% of the total population of Canada, the other Canadian provinces present a large potential growth opportunity. We believe that our experience, contacts and success in Ontario positions us well to expand further in other Canadian markets when deemed appropriate.
Similarly, if every U.S. state was to legalize online sports betting, based on state level projections from EKG, it is projected that the U.S. market would generate approximately $33 billion in revenue. Latin America Gaming Industry Latin America (including Mexico) is another area of focus for us.
Similarly, if every U.S. state was to legalize online sports betting, based on state level projections from EKG, it is projected that the U.S. market would generate approximately $34 billion in revenue. Latin America Gaming Industry Latin America (including Mexico) is another area of focus for us.
We believe the sports betting industry will grow significantly over the next several years as more states authorize sports betting and as existing markets mature. As of the fourth quarter of 2024, the three largest sports betting markets in the U.S. by handle were New York, New Jersey and Illinois.
We believe the sports betting industry will grow significantly over the next several years as more states authorize sports betting and as existing markets mature. As of the fourth quarter of 2025, the three largest sports betting markets in the U.S. by handle were New York, New Jersey and Illinois.
U.S. Online Gaming: Estimating the Total Addressable Industry Size If every U.S. state was to legalize online casino, based on state level projections from EKG, it is projected that the U.S. market would generate approximately $77 billion in revenue.
U.S. Online Gaming: Estimating the Total Addressable Industry Size If every U.S. state was to legalize online casino, based on state level projections from EKG, it is projected that the U.S. market would generate approximately $97 billion in revenue.
Such allegations may increase as our business grows. 17 Government Regulation We are subject to various U.S. and foreign laws and regulations that affect our ability to operate in the gaming and entertainment industry, in particular in the online gaming industry.
Such allegations may increase as our business grows and we expand our offerings. 17 Government Regulation We are subject to various U.S. and foreign laws and regulations that affect our ability to operate in the gaming and entertainment industry, in particular in the online gaming industry.
(“dMY”), incorporated as a Delaware corporation on September 27, 2019, formed for the purpose of effecting a merger, share exchange, asset acquisition, stock purchase, reorganization, recapitalization or other similar business combination with one or more businesses.
(“dMY”), a Delaware corporation, on September 27, 2019, formed for the purpose of effecting a merger, share exchange, asset acquisition, stock purchase, reorganization, recapitalization or other similar business combination with one or more businesses.
In March 2022, we became the first U.S.-based online casino and sports betting company to receive RG Check iGaming Accreditation from the Responsible Gambling Council for our BetRivers.com and PlaySugarHouse.com sites. RG Check is regarded as one of the world’s most comprehensive and rigorous responsible gaming accreditation program.
In March 2022, we became the first U.S.-based online casino and sports betting company to receive RG Check iGaming Accreditation from the Responsible Gambling Council for our BetRivers.com and PlaySugarHouse.com sites. RG Check is regarded as one of the world’s most comprehensive and rigorous responsible gaming accreditation program. We received reaccreditation in 2025.
We believe this experience will enable us to expand further in Latin America and other countries when the opportunities arise. Online gaming is also authorized in certain jurisdictions within Argentina, Brazil and Ecuador, which have populations of approximately 46 million, 212 million and nearly 18 million, respectively.
We believe this experience will enable us to 15 expand further in Latin America and other countries when the opportunities arise. Online gaming is also authorized in certain jurisdictions within Argentina, Brazil and Ecuador, which have populations of approximately 46 million, 214 million and nearly 18 million, respectively.
Less than three years after beginning operations in New Jersey, we were the #4 online casino brand in New Jersey based on revenue, out of 19 total operators in the market at that time, according to the Eilers & Krejcik Gaming (“EKG”) United States Online Casino Tracker for April 2019.
Less than three years after beginning operations in New Jersey, we were the fourth largest online casino brand in New Jersey based on revenue, out of 19 total operators in the market at that time, according to the Eilers & Krejcik Gaming (“EKG”) United States Online Casino Tracker for April 2019.
We have developed a set of competencies that we believe position us at the forefront of the evolving online casino and sports betting industry. We will continue iterating on our core user experiences while reinforcing the data-driven marketing and technological infrastructure that allows us to continue to scale our offerings.
Continue to invest in our offerings and our platform . We have developed a set of competencies that we believe position us at the forefront of the evolving online casino and sports betting industry. We will continue iterating on our core user experiences while reinforcing the data-driven marketing and technological infrastructure that allows us to continue to scale our offerings.
The industry has various operators and stakeholders in the private and public sectors, including traditional bricks-and-mortar casinos, state-run lotteries, Native American tribes, card rooms, legacy online gaming operators, non-traditional operators such as consumer goods or services brands that have entered or intend to enter the industry, racetracks/racinos/video lottery terminals, private equity or other investment funds, gaming content and data providers, gaming regulators, gaming technology companies, sports teams and leagues, and payment processors.
The industry has various operators and stakeholders in the private and public sectors, including traditional bricks-and-mortar casinos, state-run lotteries, Native American tribes, card rooms, legacy online gaming operators, non-traditional operators such as consumer goods or services brands that have entered or intend to enter the industry, racetracks/racinos/video lottery terminals, prediction market exchanges and platforms, private 11 equity or other investment funds, gaming content and data providers, gaming regulators, gaming technology companies, sports teams and leagues, and payment processors.
In addition, in July 2022, we became the first U.S.-based online casino and sports betting company to partner with Neccton to adopt its player protection software for our North American BetRivers and PlaySugarHouse sites. This real-time data analysis player protection software will help us offer an added layer of player safety and sustainable play.
In addition, in July 2022, we became the first U.S.-based online casino and sports betting company to partner with Neccton to adopt its player protection software for our North American BetRivers and PlaySugarHouse sites. This real-time data analysis player protection software has helped us offer an added layer of player safety and sustainable play.
Approximately 43% of our people are based in the United States with the remaining 57% being based elsewhere in the world, including Canada, Colombia, Estonia and Serbia. Our Products and Economic Model Our Revenue-Generating Product Offerings We currently offer real-money online casino, online sports betting and/or retail sports betting in 16 U.S. states, Colombia, Ontario, Canada, Mexico and Peru.
Approximately 44% of our people are based in the United States with the remaining 56% being based elsewhere in the world, including Canada, Colombia, Estonia and Serbia. Our Products and Economic Model Our Revenue-Generating Product Offerings We currently offer real-money online casino, online sports betting and/or retail sports betting in 16 U.S. states, Colombia, Ontario, Canada, Mexico and Peru.
Based on our performance to date, including in some of the most competitive U.S. markets in terms of the number of online gaming operators, we believe that we can achieve customer lifetime value levels that are among the highest in the industry. We measure lifetime value as total net revenue generated over a customer’s lifetime with us.
Based on our performance to date, including in some of the most competitive North American markets in terms of the number of online gaming operators, we believe that we can achieve customer lifetime value levels that are among the highest in the industry. We measure lifetime value as total net revenue generated over a customer’s lifetime with us.
We have been and plan to continue to grow our operational, technology and corporate services teams to broaden product development capabilities, innovation and efficiency, reduce reliance on third parties and scale platforms and digital user capabilities. Strategic Transactions .
Continue to invest in personnel . We have been and plan to continue to grow our operational, technology and corporate services teams to broaden product development capabilities, innovation and efficiency, reduce reliance on third parties and scale platforms and digital user capabilities. Strategic Transactions .
While the overall industry is still nascent, growth to date has been strong. Online sports betting revenue grew at a 95% CAGR from 2019 to 2024 according to EKG, driven mainly by an increasing number of states regulating and the immaturity of the market.
While the overall industry is still nascent, growth to date has been strong. Online sports betting revenue grew at a 81% CAGR from 2019 to 2025 according to EKG, driven mainly by an increasing number of states regulating and the immaturity of the market.
From 2019 to 2024, online casino revenue grew at a 76% CAGR based on data from EKG, largely driven by an increasing number of U.S. states regulating and immaturity of the market. EKG 12 expects continued growth in the U.S. online casino market as more states regulate and markets mature, with projected revenue to approach $13.6 billion by 2029.
From 2019 to 2025, online casino revenue grew at a 67% CAGR based on data from EKG, largely driven by an increasing number of U.S. states regulating and immaturity of the market. EKG expects continued growth in the U.S. online casino market as more states regulate and markets mature, with projected revenue to approach $13.6 billion by 2029.
EKG projects continued growth as more states regulate and markets mature, with forecasts for online sports betting revenue to exceed $23 billion by 2029. 14 U.S. Sports Betting Policy Landscape Source: EKG United States Sports Betting Policy Monitor – Released January 2025 We believe the U.S. sports betting market still has significant opportunity for growth.
EKG projects continued growth as more states regulate and markets mature, with forecasts for online sports betting revenue to exceed $21.0 billion by 2029. 14 U.S. Sports Betting Policy Landscape Source: EKG United States Sports Betting Policy Monitor – Released January 2026 We believe the U.S. sports betting market still has significant opportunity for growth.
Whether we enter a new jurisdiction as an online operator marketing directly to end users or on behalf of our land-based partner (B2C), as a platform provider to a third-party (B2B), or any permutation of the foregoing, our goal is to be ready to enter desirable jurisdictions when we believe conditions enable us to earn a strong return on our invested capital. 7 Continue to invest in our offerings and our platform .
Whether we enter a new jurisdiction as an online operator marketing directly to end users or on behalf of our land-based partner (B2C), as a platform provider to a third-party (B2B), or any permutation of the foregoing, our goal is to be ready to enter desirable jurisdictions when we believe conditions enable us to earn a strong return on our invested capital.
We have also developed and incorporated numerous proprietary bonusing features such as our slot tournaments, Rush Jackpot, and our proprietary squares game and PropPacks, a sports player card game, both of which appeal to casino and sports betting customers alike.
We have also developed and incorporated numerous proprietary bonusing features such as our slot tournaments, jackpot systems, collection games, and our proprietary squares game and PropPacks, a sports player card game, both of which appeal to casino and sports betting customers alike.
Our B2C operations contributed more than 98% of our total revenue for the years ended December 31, 2024 and 2023, and we expect that it will continue to be our primary operating model into the future.
Our B2C operations contributed more than 99% and 98% of our total revenue for the years ended December 31, 2025 and 2024, respectively, and we expect that it will continue to be our primary operating model into the future.
As demonstrated in the chart below, the average lifetime value of our North American customer cohorts shortly after inception (2017) generally trends higher as the cohorts mature, with our oldest player cohorts having an average lifetime value of approximately $4,600.
As demonstrated in the chart below, the average lifetime value of our North American customer cohorts shortly after inception (2017) generally trends higher as the cohorts mature, with our oldest player cohorts having an average lifetime value of approximately $5,100.
In recent years, online gaming has seen outsized growth and increased penetration. Based on data from EKG, online sports and casino revenue grew at a 87% compound annual growth rate (“CAGR”) from 2019 to 2024.
In recent years, online gaming has seen outsized growth and increased penetration. Based on data from EKG, online sports and casino revenue grew at a 74% compound annual growth rate (“CAGR”) from 2019 to 2025.
Through our primary operating model, B2C, we offer online casino, online sports betting and social gaming directly to the end customer through our websites or apps.
Through our primary operating model, B2C, we offer online casino, online sports betting and social gaming directly to end customers through our apps or websites.
Supreme Court’s decision, as of the date hereof, 39 states and the District of Columbia have authorized sports betting. Of those 40 jurisdictions, 32 states have authorized statewide online sports betting while 8 remain authorized for retail-only at casinos or retail locations. According to EKG, the United States generated approximately $14.0 billion in online sports betting revenue in 2024.
Supreme Court’s decision, as of the date hereof, 39 states and the District of Columbia have authorized sports betting. Of those 40 jurisdictions, 32 states have authorized statewide online sports betting while 8 remain authorized for retail-only at casinos or retail locations. According to EKG, the United States generated approximately $17.5 billion in online sports betting revenue in 2025.
In 2024, we partnered with the AGA by participating in its “Have a Game Plan®” public service campaign, which brought together organizations across the gaming and sports industries to advance responsible sports wagering.
In 2024, we partnered with the AGA by participating in its “Have a Game Plan®” public service campaign, which brought together organizations across the gaming and sports industries to advance responsible sports wagering, and we continued that partnership into 2025.
Our omni-channel platform provides a vast amount of functionality, such as: location-based decisioning; unified conditional bonusing; gamified award scenarios, 5 such as bingo, Rush Jackpot, squares, PropPacks and slot tournaments; customer dashboards (online and at retail); promotional games; real-time awards and promotion management; sophisticated reporting; responsible gaming features improved betting interfaces such as prop central; and same game parlay merchandising, among others.
Our omni-channel platform provides broad functionality, such as: location-based decisioning; unified conditional bonusing; gamified award scenarios, such as bingo, jackpot systems, collection games, squares, PropPacks and slot tournaments; customer dashboards (online and at retail); promotional games; real-time awards and promotion management; sophisticated reporting; responsible gaming features improved betting interfaces such as prop central; and same game parlay merchandising, among others.
General and administrative expenses consist primarily of administrative personnel costs, including salaries, bonuses and benefits, share-based compensation expense for dedicated personnel, professional fees related to legal, compliance, audit and consulting services, rent, insurance costs and foreign exchange gains or losses. Depreciation and Amortization.
General and administrative costs consist primarily of administrative personnel costs, (including salaries, bonuses and benefits and share-based compensation), professional fees related to legal, compliance, accounting, audit and consulting services, indirect technology costs, rent expense, insurance costs and foreign exchange gains or losses. Depreciation and Amortization.
We believe our corporate culture combined with our growth and success have created very high rates of employee retention. As of February 26, 2025, we had a global workforce of approximately 883 employees and contractors, with approximately 35% of our people working in technical roles.
We believe our corporate culture combined with our growth and success have created very high rates of employee retention. As of February 17, 2026, we had a global workforce of approximately 912 employees and contractors, with approximately 35% of our people working in technical roles.
Mexico, Argentina, Peru, Brazil and Ecuador still have relatively low internet penetration, with around 81%, 89%, 75%, 84% and 73%, respectively, of the population having internet access compared to approximately 97% in the United States, 94% in Canada and 95% in the UK.
Based on 2023 data from the World Population Review, Mexico, Argentina, Peru, Brazil and Ecuador still have relatively low internet penetration, with around 81%, 89%, 75%, 84% and 73%, respectively, of the population having internet access compared to approximately 97% in the United States, 94% in Canada and 95% in the UK.
By leveraging our dynamic proprietary online gaming platform and our operational expertise, we generally aim to be “first to market” where real-money online gaming has been newly legalized and where our management determines that it is desirable to enter such market. Our principal offerings are our real-money online casino and online sports betting products.
By leveraging our dynamic proprietary online gaming platform and our operational expertise, we generally aim to be “first to market” where real-money online gaming has been newly legalized and where our management determines that it is desirable to enter such market.
As noted above, in addition to us and our subsidiaries engaged in gaming operations, gaming authorities generally also have the right to investigate individuals or entities having a material relationship or material involvement with us or any of our subsidiaries, to determine whether such individual or entity is suitable as a business associate.
Gaming authorities generally also have the right to investigate individuals or entities having a material relationship or material involvement with us or any of our subsidiaries, to determine whether such individual or entity is suitable as a business associate.
Online Casino Currently, online casino is authorized in fewer states than sports betting. Online casino is authorized only in eight states: Connecticut, Delaware, Michigan, New Jersey, Pennsylvania, West Virginia, Rhode Island and Nevada (although regulators have not authorized online casino outside of physical casinos in Nevada).
Online Casino Currently, online casino is authorized in fewer states than sports betting. Online casino is authorized only in nine states: Connecticut, Delaware, Maine (although the market is not yet operating), Michigan, New Jersey, Pennsylvania, West Virginia, Rhode Island and Nevada (although regulators have not authorized online casino outside of physical casinos in Nevada).
Our Chief Executive Officer Richard Schwartz, Chief Information Officer Einar Roosileht, Chief Operating Officer Mattias Stetz, Chief Administrative Officer Rob Picard and Chief Marketing Officer Brian Sapp all had online gaming and/or social gaming experience prior to joining RSI, which we believe has been instrumental in helping capture U.S. market share.
Our Chief Executive Officer Richard Schwartz, Chief Operating Officer Mattias Stetz, Chief Strategy Officer Rob Picard, Chief Technology Officer Shubham Tyagi and Chief Marketing Officer Brian Sapp all had online gaming, social gaming and/or sports-related experience prior to joining RSI, which we believe has been instrumental in helping capture U.S. market share.
We plan to continue to invest in our customers and our offerings, such as our introduction of a new online poker offering, as we remain driven to keep customers engaged while expanding the capabilities of our platform that will enable us to rapidly reach new jurisdictions and attract new customers. Continue to invest in personnel .
We plan to continue to invest in our customers and our offerings, such as the introduction of our online poker offering, which we currently offer in four U.S. states, as we remain driven to keep customers engaged while expanding the capabilities of our platform that will enable us to rapidly reach new jurisdictions and attract new customers.
We believe there is great potential for revenue growth as new markets open in the United States. Per EKG, online casino revenue in the U.S. grew by 29% from $6.5 billion to $8.4 billion from 2023 to 2024.
We believe there is great potential for revenue growth as new markets open in the United States. Per EKG, online casino revenue in the U.S. grew by 27% from $8.4 billion to $10.7 billion from 2024 to 2025.
Market Access and Speed to Market. We currently operate online casino and/or online sports betting in 19 jurisdictions, including 15 states (Arizona, Colorado, Delaware, Illinois, Indiana, Iowa, Louisiana, Maryland, Michigan, New Jersey, New York, Ohio, Pennsylvania, Virginia and West Virginia) and four international markets (Colombia, Ontario, Canada, Mexico and Peru) with an aggregate population of over 350 million people.
We currently operate online casino and/or online or retail sports betting in 20 jurisdictions, including 16 states (Arizona, Colorado, Delaware, Illinois, Indiana, Iowa, Louisiana, Maryland, Michigan, New Jersey, New York, Ohio, Pennsylvania, Virginia, Washington and West Virginia) and four international markets (Colombia, Ontario, Canada, Mexico and Peru) with an aggregate population of over 360 million people.
Recently, Alberta has announced its intention to launch competitive regulated online gaming in that province, although no specific launch date has been announced as of the date hereof. Alberta’s population of approximately five million makes it Canada’s fourth largest province by population. It also enjoys Canada’s highest GDP per capita. Competition We operate in the global gaming and entertainment industry.
Recently, Alberta has announced its intention to launch competitive regulated online gaming in that province, although no specific launch date has been formally announced as of the date hereof. Alberta’s population of approximately five million makes it Canada’s fourth largest province by population. It also enjoys Canada’s highest GDP per capita amongst the Canadian provinces.
Continued growth is expected as more states regulate and markets mature, with EKG projecting revenue to grow by more than $14 billion from 2024 to 2029, or a CAGR of 10%.
Continued growth is expected as more states regulate and markets mature, with EKG projecting revenue to grow by more than $6.0 billion from 2025 to 2029, or a CAGR of 5%.
Since 2018, we have been operating online gaming in Colombia, which has a population of approximately 53 million, since the second quarter of 2022, we have been 15 operating in Mexico, which has a population of approximately 131 million, and since the third quarter of 2024, we have been operating in Peru, which has a population of approximately 34 million.
Since 2018, we have been operating online gaming in Colombia, which has a population of approximately 54 million, since the second quarter of 2022, we have been operating in Mexico, which has a population of approximately 133 million, and since the third quarter of 2024, we have been operating in Peru, which has a population of approximately 35 million.
We have numerous arrangements in place where legislation or regulations require us to enter the market through a relationship with a local partner or we have otherwise determined that having such an arrangement is desirable. We also have relationships with several land-based partners on a B2B basis.
We have numerous arrangements in place where legislation or regulations require us to enter the market through a relationship with a local partner or we have otherwise determined that having such an arrangement is desirable.
Our decision about what brand or brands to use is market- and partner-specific, and is based on brand awareness, market research, marketing efficiency and applicable gaming rules and regulations. Corporate History, Background and Business Combination We were initially a blank check company called dMY Technology Group, Inc.
Our decision about what brand or brands to use is market- and partner-specific, and is based on brand awareness, market research, marketing efficiency and applicable gaming rules and regulations. Corporate History We were initially incorporated as dMY Technology Group, Inc.
In most U.S. jurisdictions, applicable gaming regulations require online gaming operators that offer real-money offerings to operate under the gaming license of, or partner with, a bricks-and-mortar casino, lottery or other type of local partner such as a professional sports team.
In most U.S. jurisdictions, applicable gaming regulations require online gaming operators that offer real-money offerings to operate under the gaming license of, or partner with, a bricks-and-mortar casino, lottery or other type of local partner such as a professional sports team. Consequently, we leverage our relationships to find high-quality, reliable partners for online gaming collaboration.
With our experience in regulated gaming jurisdictions in the Americas, we are prepared to enter new online casino and/or sports betting markets once management has determined it is desirable to do so.
With our experience in regulated gaming jurisdictions in the Americas, we are prepared to enter new online casino and/or sports betting markets once management has determined it is desirable to do so. For example, we expect to enter the regulated online casino and sport betting market in Alberta, Canada once that market goes live.
Revenue share and market access fees consist primarily of variable amounts paid to local partners that hold the applicable gaming license, providing us the ability to offer our real-money online offerings in the respective jurisdictions.
These costs are primarily variable in nature and should, in large part, typically correlate with the change in revenue. Revenue share and market access fees consist primarily of variable amounts paid to local partners that hold the applicable gaming license, providing us the ability to offer our real-money online offerings in the respective jurisdictions.
We also believe that our brands, offerings and marketing strategies appeal to both female and male customers, as evidenced by an approximately 53-47 female/male split in our active North American online casino-only customers during calendar year 2024.
Our brands, offerings and marketing strategies appeal to both female and male customers, as evidenced by an approximately 51-49 female/male split in our active North American online casino-only customers during calendar year 2025.
Our Development Team Our development team is led by our Chief Information Officer and consists of a set of cross-functional product development teams comprised of talented individuals with expertise in system architecture, client and server-side product engineering, database architecture, product, engineering and project management, website and native app design and development, security and technical support.
We also have relationships with several land-based partners on a B2B basis. 10 Our Development Team Our development team is led by our Chief Technology Officer and consists of a set of cross-functional product development teams comprised of talented individuals with expertise in system architecture, client and server-side product engineering, database architecture, product, engineering and project management, website and native app design and development, security and technical support.
We incur payment processing costs on customer deposits and occasionally chargebacks (i.e., when a payment processor contractually disallows customer deposits in the normal course of business). Advertising and Promotions Costs. Advertising and promotions costs consist primarily of costs associated with marketing our offerings via different channels, promotional activities and related customer acquisition costs.
We incur payment processing costs on player deposits, withdrawals and occasionally chargebacks (i.e., when a payment processor contractually disallows customer deposits in the normal course of business). Sales and Marketing. Sales and marketing costs consist primarily of costs associated with marketing our products and services via different channels, promotional activities and the related costs incurred to acquire new customers.
Our social gaming business has three main goals: build online databases in key markets ahead of and post-legalization and regulation; generate revenues; and increase engagement and visitation to our bricks-and-mortar partner properties.
Virtual credits have no monetary value and can only be used within our social gaming platform. Our social gaming business has three main goals: build online databases in key markets ahead of and post-legalization and regulation; generate revenues; and increase engagement and visitation to our bricks-and-mortar partner properties.
Based on the results from Ontario to date, the Ontario market is off to a strong start, with online casino (excluding poker) and online sports betting revenue growing by approximately 33% in the second half of 2024 as compared to the same period in 2023.
Based on the results from Ontario to date, the Ontario market is off to a strong start, with online casino (excluding poker) and online sports betting revenue growing by approximately 36% year over year for 2025 compared to 2024, including an acceleration in the second half of 2025 specifically, where revenue increased 40% as compared to the same period in 2024.
Our Industry and Opportunity We currently operate within the online gaming and entertainment industry. The global gaming industry includes a wide array of products such as lotteries, bingo, slot machines, poker, casino games (including live dealer), sports betting, horse racing, e-sports and virtual sports, across land-based and online platforms.
The global gaming industry includes a wide array of products such as lotteries, bingo and bingo draw-based games (including Class II gaming), slot machines, poker, casino games (including live dealer), sports betting, horse racing, e-sports, virtual sports and more recently, prediction markets, across land-based and online platforms.
Strategic multi-year arrangements with partners such as bricks-and-mortar casinos, Native American tribes or professional sports teams enable us to make our offerings available to customers in certain jurisdictions on a B2C basis.
We have developed proprietary technology, product offerings and partnerships to create a sustainable advantage in the online casino and sports betting industry. Strategic multi-year arrangements with partners such as bricks-and-mortar casinos, Native American tribes or professional sports teams enable us to make our offerings available to customers in certain jurisdictions on a B2C basis.
U.S. Gaming Industry We see tremendous opportunity in the U.S. online gaming market. As U.S. jurisdictions become regulated and mature, online gaming penetration may approach that of other developed nations. For example, online casino and online sports betting revenues in the United States increased 32% from $17.0 billion in 2023 to $22.4 billion in 2024 per EKG.
As U.S. jurisdictions become regulated and mature, online gaming penetration may approach that of other developed nations. For example, online casino and online sports betting revenues in the United States increased 25% from $22.5 billion in 2024 to $28.2 billion in 2025 per EKG.
These projections imply a CAGR from 2024 to 2029 of 10%.
These projections imply a CAGR from 2025 to 2029 of 6%.
Consequently, we leverage our relationships with bricks-and-mortar casinos and others in the gaming industry to find high-quality, reliable partners for online gaming collaboration. Upon securing a partner for access to a specific market (if required or desirable) and before we launch operations in that market, we customize our online gaming platform to comply with the jurisdiction’s laws and regulations.
Upon securing a partner for access to a specific market (if required or desirable) and before we launch operations in that market, we customize our online gaming platform to comply with the jurisdiction’s laws and regulations.
These efforts are primarily concentrated within the specific jurisdictions where we operate or intend to operate. We believe there is significant benefit to having a flexible approach to advertising spending as we can quickly redirect our advertising spending based on dynamic testing of our advertising methods and channels. General and Administrative.
We believe there is significant benefit to having a flexible approach to advertising spending as we can quickly redirect our advertising spending based on dynamic testing of our advertising methods and channels. General and Administrative.
A description of the material terms of the Business Combination and ancillary agreements entered into in connection therewith is set forth in the Current Report on Form 8-K filed with the SEC on January 5, 2021, primarily in the Introductory Note thereto and Item 1.01 therein, and the Registration Statement on Form S-1, Registration No. 333-252810, filed with the SEC on February 5, 2021, and as amended from time to time, primarily in the section titled “Business Combination”, which are incorporated herein by reference.
On December 29, 2020, dMY completed a business combination pursuant to a business combination agreement dated as of July 27, 2020, as amended (the “Business Combination Agreement” and the transactions contemplated thereby, the “Business Combination”), and in connection therewith, among other things, dMY acquired Rush Street Interactive, LP (“RSILP”) and dMY changed its name to “Rush Street Interactive, Inc.” A description of the material terms of the Business Combination and ancillary agreements entered into in connection therewith is set forth in the Current Report on Form 8-K filed with the SEC on January 5, 2021, primarily in the Introductory Note thereto and Item 1.01 therein, and the Registration Statement on Form S-1, Registration No. 333-252810, filed with the SEC on February 5, 2021, and as amended from time to time, primarily in the section titled “Business Combination”, which are incorporated herein by reference.
Depreciation and amortization expense consists of depreciation on our property and equipment and amortization of intangible assets (including market access licenses, gaming jurisdictional licenses, internally developed software, trademarks, developed technology and other intangibles) and finance lease right-of-use assets over their useful lives.
Depreciation and amortization expense consists of depreciation on our property and equipment and amortization of intangible assets (including market access licenses, gaming jurisdictional licenses, internally developed software, trademarks, developed technology and other intangibles) and finance lease right-of-use assets over their useful lives. See Notes 2, 4, 5 and 13 to our consolidated financial statements, included elsewhere in this Annual Report.
Both Pennsylvania and New Jersey were experiencing online casino taxable revenue growth prior to 2020; however, that growth accelerated in March 2020 and continued in large part through 2024.
This, in turn, may result in states to look to offset this deficit in tax revenue through legalizing online casino. Both Pennsylvania and New Jersey were experiencing online casino taxable revenue growth prior to 2020; however, that growth accelerated in March 2020 and continued in large part through 2025.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeIn addition, the shortening, delay, relocation or cancellation of major sports seasons or events due to events beyond our control such as weather conditions or disasters like the dangerous temperatures in January 2024 that resulted in the NFL’s Buffalo Bills versus the Pittsburgh Steelers being rescheduled or the wild fires in Los Angeles, which resulted in the Los Angeles Rams versus the Minnesota Vikings being relocated to Arizona, may result in less money bet on sports and prevent us from garnering sufficient interest in our sports betting offerings, which could adversely impact our financial results. 26 Recruitment and retention of our employees, including certain key employees, is vital to growing our business and meeting our business plans.
Biggest changeIn addition, the shortening, delay, relocation or cancellation of major sports seasons or events due to events beyond our control such as weather conditions or disasters like the wild fires in Los Angeles, which resulted in the Los Angeles Rams versus the Minnesota Vikings being relocated to Arizona and several NBA and NHL games being rescheduled due to the wildfires to ensure fan and player safety, or the Minnesota Timberwolves versus the Golden State Warriors game being postponed due to local protests and safety concerns, may result in less money bet on sports and prevent us from garnering sufficient interest in our sports betting offerings, which could adversely impact our financial results. 26 Recruitment and retention of our employees, including certain key employees, is vital to growing our business and meeting our business plans.
Additional risks and uncertainties not currently known to us, or that we currently deem to be immaterial may also materially adversely affect our business, prospects, financial condition and results of operations.
Additional risks and uncertainties not currently known to us, or that we currently deem to be immaterial may also materially adversely affect our business, prospects, financial condition and results of operations.
However, there can be no guarantee that this practice of voiding bets practice will continue. If regulators were to disallow voiding of bets associated with clear errors, we could be forced to incur significant liabilities associated with such errors.
However, there can be no guarantee that this practice of voiding bets will continue. If regulators were to disallow voiding of bets associated with clear errors, we could be forced to incur significant liabilities associated with such errors.
We believe this practice is beneficial overall because if it were not possible, the betting options would be restricted globally and limits available to customers would be much lower to insulate overall risk due to the existence of a small segment of highly 27 sophisticated syndicates and algorithmic bettors, or bettors looking to take advantage of site errors and omissions.
We believe this practice is beneficial overall because if it were not possible, the betting options would be restricted globally and 27 limits available to customers would be much lower to insulate overall risk due to the existence of a small segment of highly sophisticated syndicates and algorithmic bettors, or bettors looking to take advantage of site errors and omissions.
Failure to discover such fraud or cheating in a timely manner could harm our operations. Negative publicity related to such fraud or cheating could adversely affect our reputation, potentially causing a material adverse effect on our business, financial condition, results of operations and prospects. Additionally, we may inadvertently send overly generous promotions that we could be forced to honor.
Failure to discover such fraud or cheating in a timely manner could harm our operations, and negative publicity related to such fraud or cheating could adversely affect our reputation, potentially causing a material adverse effect on our business, financial condition, results of operations and prospects. Additionally, we may inadvertently send overly generous promotions that we could be forced to honor.
Supreme Court's decision could significantly impact consumer protection, advertising, privacy, artificial intelligence, anti-corruption and anti-money laundering practices and other regulatory regimes with which we are required to comply. Future legislative and regulatory action, and court decisions or other governmental action, may have a material impact on our operations and financial results.
Supreme Court’s decision could significantly impact consumer protection, advertising, privacy, artificial intelligence, anti-corruption and anti-money laundering practices and other regulatory regimes with which we are required to comply. Future legislative and regulatory action, court decisions or other governmental action may have a material impact on our operations and financial results.
We have incorporated and will likely continue to incorporate artificial intelligence (“AI”) solutions into our business and , and applications of AI may become important in our operations over time.
We have incorporated and will likely continue to incorporate artificial intelligence (“AI”) solutions into our business, and applications of AI may become important in our operations over time.
Under these rules, a company of which more than 50% of the voting power for the election of directors is held by an individual, group or another company is a “controlled company” and may elect not to comply with certain corporate governance requirements, including: • having a majority of our Board consist of independent directors; • having a nominating and corporate governance committee that is composed entirely of independent directors with a written charter addressing the committee’s purpose and responsibilities; • having a compensation committee that is composed entirely of independent directors with a written charter addressing the committee’s purpose and responsibilities; and • conducting an annual performance evaluation of the nominating and corporate governance and compensation committees.
Under these rules, a company of which more than 50% of the voting power for the election of directors is held by an individual, group or another company is a “controlled company” and may elect to not comply with certain corporate governance requirements, including: • having a majority of our Board consist of independent directors; • having a nominating and corporate governance committee that is composed entirely of independent directors with a written charter addressing the committee’s purpose and responsibilities; • having a compensation committee that is composed entirely of independent directors with a written charter addressing the committee’s purpose and responsibilities; and • conducting an annual performance evaluation of the nominating and corporate governance and compensation committees.
In the event the Company is no longer a “controlled company” under the applicable NYSE rules, the Sponsor will have the right to nominate up to two directors and the Sellers’ Representative will have the right to nominate a number of directors equal to the greater of the number of directors permitted by NYSE or a 50 number equal to the total number of directors multiplied by the percentage of the Company’s issued and outstanding voting securities held by the Sellers and their permitted transferees at such time, in each case subject to certain independence and holdings requirements.
In the event the Company is no longer a “controlled company” under the applicable NYSE rules, the Sponsor will have the right to nominate up to two directors and the Sellers’ Representative will have the right to nominate a number of directors equal to the greater of the number of directors 50 permitted by NYSE or a number equal to the total number of directors multiplied by the percentage of the Company’s issued and outstanding voting securities held by the Sellers and their permitted transferees at such time, in each case subject to certain independence and holdings requirements.
Moreover, the TRA provides that, in the event that (i) the Special Limited Partner exercises its early termination rights thereunder, (ii) certain changes of control of us, the Special Limited Partner or RSILP occur (as described in the RSILP A&R LPA), (iii) the Special Limited Partner in certain circumstances, fails to make a payment required under the TRA by 54 its due date, which failure continues for 30 days following such date or (iv) we or the Special Limited Partner materially breach any of our material obligations under the TRA other than as described in the foregoing clause (iii), which breach continues without cure for 30 days following receipt of written notice thereof and written notice of acceleration is received by us and/or the Special Limited Partner thereafter (except if the TRA is rejected in a case commenced under bankruptcy laws, no acceleration notice is required), in the case of clauses (iii) and (iv), unless certain liquidity exceptions apply, the Special Limited Partner’s obligations under the TRA will accelerate and the Special Limited Partner will be required to make a lump-sum cash payment to the Sellers and/or other applicable parties to the TRA equal to the present value of all forecasted future payments that would have otherwise been made under the TRA, which payment would be based on certain assumptions, including those relating to our and our consolidated subsidiaries’ (including the Special Limited Partner’s) future taxable income.
Moreover, the TRA provides that, in the event that (i) the Special Limited Partner exercises its early termination rights thereunder, (ii) certain changes of control of us, the Special Limited Partner or RSILP occur (as described in the RSILP A&R LPA), (iii) the Special Limited Partner in certain circumstances, fails to make a payment required under the TRA by its due date, which failure continues for 30 days following such date or (iv) we or the Special Limited Partner materially breach any of our material obligations under the TRA other than as described in the foregoing clause (iii), which breach continues without cure for 30 days following receipt of written notice thereof and written notice of acceleration is received by us and/or the Special Limited Partner thereafter (except if the TRA is rejected in a case commenced under bankruptcy laws, no acceleration notice is required), in the case of clauses (iii) and (iv), unless certain liquidity exceptions apply, the Special Limited Partner’s obligations under the TRA will accelerate and the Special Limited Partner will be required to make a lump-sum cash payment to the Sellers and/or other applicable parties to the TRA equal to the present value of all forecasted future payments that would have otherwise been made under the TRA, which payment would be based on certain assumptions, including those relating to our and our consolidated subsidiaries’ (including the Special Limited Partner’s) future taxable income.
Summary of the Material Risks Associated with Our Business These risks include, but are not limited to, the following: • Competition in the online and retail sports betting and online gaming industry is intense and, as a result, we may fail to attract and retain customers, which may negatively impact our operations and growth prospects. • Our projections, including for revenues, market share, expenses and profitability, are subject to significant risks, assumptions, estimates and uncertainties and may therefore differ materially from our expectations. • Our operating results may vary, which may make future results difficult to predict with certainty. 23 • Recruitment and retention of our employees, including certain key employees, is vital to growing our business and meeting our business plans.
Summary of the Material Risks Associated with Our Business These risks include, but are not limited to, the following: • Competition in the online and retail sports betting and online gaming industry is intense and, as a result, we may fail to attract and retain customers, which may negatively impact our operations and growth prospects. • Our projections, including for revenues, market share, expenses and profitability, are subject to significant risks, assumptions, estimates and uncertainties and may therefore differ materially from our expectations. • Our operating results may vary, which may make future results difficult to predict with certainty. • Recruitment and retention of our employees, including certain key employees, is vital to growing our business and meeting our business plans.
Breaches of 41 our security measures or those of our third-party providers, or cybersecurity incidents could result in: unauthorized access to our sites, apps, networks and systems; unauthorized access to and misappropriation of customer or personnel data, including personally identifiable information, or our or third parties’ other confidential or proprietary information; viruses, worms, spyware or other malware being served from our sites, apps, networks or systems; deletion or modification of content or the display of unauthorized content on our sites or apps; interruption, disruption or malfunction of operations; costs relating to breach remediation, deployment of additional personnel and protection technologies, response to governmental investigations and media inquiries and coverage; engagement of third-party experts and consultants; or litigation, regulatory action and other potential liabilities.
Breaches of our security measures or those of our third-party providers, or cybersecurity incidents could result in: unauthorized access to our sites, apps, networks and systems; unauthorized access to and misappropriation of customer or personnel data, including personally identifiable information, or our or third parties’ other confidential or proprietary information; viruses, worms, spyware or other malware being served from our sites, apps, networks or systems; deletion or modification of content or the display of unauthorized content on our sites or apps; interruption, disruption or malfunction of operations; costs relating to breach remediation, deployment of additional personnel and protection technologies, response to governmental investigations and media inquiries and coverage; engagement of third-party experts and consultants; or litigation, regulatory action and other potential liabilities.
If the NYSE delists our Class A Common Stock from trading on its exchange for failure to meet the listing standards, we and our stockholders could face significant material adverse consequences including: (i) a limited availability of market quotations for our securities; (ii) a determination that our Class A Common Stock is a “penny stock,” which will require brokers trading in our Class A Common Stock to adhere to more stringent rules, possibly resulting in a reduced level of trading activity in the secondary trading market for our Class A Common Stock; (iii) a limited amount of analyst coverage; and (iv) a decreased ability to issue additional securities or obtain additional financing in the future.
If the NYSE delists our Class A Common Stock from trading on its exchange for failure to meet the listing standards, we and our stockholders could face significant material adverse consequences including: (i) a limited availability of market quotations for our securities; (ii) a determination that our Class A Common Stock is a “penny stock,” which will require brokers trading in our Class A Common Stock to adhere to more stringent rules, possibly resulting in a reduced level of trading activity in the secondary trading market for our Class A Common Stock; (iii) a limited amount of analyst coverage, if any; and (iv) a decreased ability to issue additional securities or obtain additional financing in the future.
Factors affecting the trading price of our securities may include: • success of our competitors, and actual or anticipated fluctuations in our financial results or those of companies perceived to be similar to us; • changes in the market’s expectations about our operating results, changes in securities analysts’ financial estimates and recommendations concerning us or the industries in which we operate in general, or our operating results failing to meet the expectation of securities analysts or investors in a particular period; • lack of adjacent competitors; • operating and stock price performance of other companies that investors deem comparable to us; • our ability to market new and enhanced products on a timely basis; • changes in laws and regulations affecting our business; • commencement of, or involvement in, litigation involving us; • changes in our capital structure, such as future issuances of securities or the incurrence of debt; • the volume of shares of our Class A Common Stock available for public sale; • any major change in our Board or management; • the timing, amount or duration of the Company’s stock repurchase program; 55 • sales of substantial amounts of Class A Common Stock by our directors, executive officers or significant stockholders or the perception that such sales could occur; and • general economic and political conditions such as recessions, inflation, changes in tariffs, interest rates, actual or perceived instability in the global banking sector, currency fluctuations, pandemics and acts of war or terrorism.
Factors affecting the trading price of our securities may include: • success of our competitors, and actual or anticipated fluctuations in our financial results or those of companies perceived to be similar to us; • changes in the market’s expectations about our operating results, changes in securities analysts’ financial estimates and recommendations concerning us or the industries in which we operate in general, or our operating results failing to meet the expectation of securities analysts or investors in a particular period; • lack of adjacent competitors; • operating and stock price performance of other companies that investors deem comparable to us; • our ability to market new and enhanced products on a timely basis; • changes in laws and regulations affecting our business; • commencement of, or involvement in, litigation involving us; • changes in our capital structure, such as future issuances of securities or the incurrence of third-party debt; • the volume of shares of our Class A Common Stock available for public sale; 55 • any major change in our Board or management; • the timing, amount or duration of the Company’s stock repurchase program; • sales of substantial amounts of Class A Common Stock by our directors, executive officers or significant stockholders or the perception that such sales could occur; and • general economic and political conditions such as recessions, inflation, changes in tariffs, interest rates, actual or perceived instability in the global banking sector, currency fluctuations, pandemics and acts of war or terrorism.
Unfavorable changes in general economic conditions, including recessions, declines in consumer confidence in the economy, economic slowdowns, sustained high levels of unemployment or inflation, increased interest rates, and rising prices, in particular of food and energy, fears of war and acts of terrorism or perceived weak or weakening economic conditions, may reduce our customers’ disposable income or result in fewer individuals engaging in entertainment and leisure activities, such as online casino and sports betting.
Unfavorable changes in general economic conditions, including recessions, declines in consumer confidence in the economy, economic slowdowns, sustained high levels of unemployment or inflation, tariffs, increased interest rates, and rising prices, in particular of food and energy, fears of war and acts of terrorism or perceived weak or weakening economic conditions, may reduce our customers’ disposable income or result in fewer individuals engaging in entertainment and leisure activities, such as online casino and sports betting.
Furthermore, we may be more susceptible to these risk as we enter and continue to target growth in emerging countries and regions, including Latin America, which may be subject to a relatively higher risk of political instability, economic volatility, crime, corruption and social and ethnic unrest, all of which are exacerbated in many cases by a lack of an independent and 35 experienced judiciary and uncertainties in how local law is applied and enforced.
Furthermore, we may be more susceptible to these risk as we enter and continue to target growth in emerging countries and regions, including Latin America, which may be subject to a relatively higher risk of political instability, economic volatility, crime, corruption and social and ethnic unrest, all of which are exacerbated in many cases by a lack of an independent and experienced judiciary and uncertainties in how local law is applied and enforced.
Any of these measures may adversely impact our ability to: maintain our operations infrastructure; offer the full scope of our offerings, in particular if sporting events or seasons are disrupted; effectively scale and grow our technical infrastructure to accommodate increased demands, especially in light of supply chain issues and increased network and Internet usage; effectively manage our international operations through changes in trade practices and policies; and sustain our operational effectiveness and productivity.
Any of these measures may adversely impact our ability to: maintain our operations infrastructure; offer the full scope of our offerings, in particular if sporting events or seasons are disrupted; effectively scale and grow our technical 58 infrastructure to accommodate increased demands, especially in light of supply chain issues and increased network and Internet usage; effectively manage our international operations through changes in trade practices and policies; and sustain our operational effectiveness and productivity.
Any changes, bugs, technical or regulatory issues in such systems, or any changes in our relationships with mobile manufacturers and carriers, or in their terms of service or policies that negatively affect our offerings’ functionality, or that reduce or eliminate 30 our ability to distribute our offerings, provide preferential treatment to competitive products, limit our ability to deliver our offerings, or impose fees or other charges related to delivering our offerings, could adversely affect the use and monetization of our offerings on mobile devices.
Any changes, bugs, technical or regulatory issues in such systems, or any changes in our relationships with mobile manufacturers and carriers, or in their terms of service or policies that negatively affect our offerings’ functionality, or that reduce or eliminate our ability to distribute our offerings, provide preferential treatment to competitive products, limit our ability to deliver our offerings, or impose fees or other charges related to delivering our offerings, could adversely affect the use and monetization of our offerings on mobile devices.
For instance, although we were unaffected, in late 2022, some of our competitors disclosed that their systems were subject to successful attempts by one or more individuals who ultimately gained unauthorized access to customer accounts and withdrew funds from the customers’ accounts, and in 2023 several land-based casinos experienced ransomware attacks, some of which significantly impacted their ability to operate effectively.
For instance, although we were unaffected, in late 2022, some of our competitors disclosed that their systems 41 were subject to successful attempts by one or more individuals who ultimately gained unauthorized access to customer accounts and withdrew funds from the customers’ accounts, and in 2023 several land-based casinos experienced ransomware attacks, some of which significantly impacted their ability to operate effectively.
Because our platform and offerings are complex and incorporate a variety of hardware and proprietary and third-party software, they may contain errors, bugs, flaws or corrupted data, which may become apparent only after their launch and 42 could result in unanticipated downtime or vulnerabilities that could compromise our systems’ security, including inadvertently permitting access to protected customer, vendor or personnel data or disabling access to such data.
Because our platform and offerings are complex and incorporate a variety of hardware and proprietary and third-party software, they may contain errors, bugs, flaws or corrupted data, which may become apparent only after their launch and could result in unanticipated downtime or vulnerabilities that could compromise our systems’ security, including inadvertently permitting access to protected customer, vendor or personnel data or disabling access to such data.
Further, governmental authorities or courts could determine that our free-to-play, social gaming offerings constitute unauthorized gambling or that legislation is enacted in jurisdictions in which we operate such social gaming offerings that makes them unauthorized gambling, which could negatively impact our operations and business results and expose us and certain of our third-party providers, including the app stores that 37 distribute our apps, to potential litigation.
Further, governmental authorities or courts could determine that our free-to-play social gaming offerings constitute unauthorized gambling or that legislation is enacted in jurisdictions in which we operate such social gaming offerings that makes them unauthorized gambling, which could negatively impact our operations and business results and expose us and certain of our third-party providers, including the app stores that distribute our apps, to potential litigation.
As most state product taxes apply to various measures of modified gross profit, tax rates, whether federal- or state-based, that are higher than we expect will make it more costly and less desirable for us to launch in a given jurisdiction, while tax increases in any of our existing jurisdictions may adversely impact our profitability.
As most product taxes apply to various measures of modified gross profit, tax rates, whether federal-, provincial- or state-based, that are higher than we expect will make it more costly and less desirable for us to launch in a given jurisdiction, while tax increases in any of our existing jurisdictions may adversely impact our profitability.
While BEPS 2.0 Pillar Two legislation has not had an impact on the Company, it could significantly increase our future tax liabilities. We will continue to monitor regulatory developments to assess potential impacts to us. The gaming industry represents a significant source of tax revenue to the jurisdictions in which we are licensed.
While BEPS 2.0 Pillar Two legislation has not had an impact on the Company, it could significantly increase our future tax liabilities. We will continue to monitor regulatory developments to assess potential impacts to us. 33 The gaming industry represents a significant source of tax revenue to the jurisdictions in which we are licensed.
Our data security measures are reviewed and evaluated regularly; however, they might not protect us against increasingly sophisticated and aggressive threats including, without limitation, computer malware, viruses, hacking and phishing attacks. Use of artificial intelligence in our products or services may result in operational challenges, legal liability, reputational concerns and competitive risks.
Our data security measures are reviewed and evaluated regularly; however, they might not protect us against increasingly sophisticated and aggressive threats including, without limitation, computer malware, viruses, hacking and phishing attacks. 44 Use of artificial intelligence in our products or services may result in operational challenges, legal liability, reputational concerns and competitive risks.
There is risk that the use of social media by us, our employees, executives, or board members to communicate about our business or other matters may give rise to liability, damage our brand, or result in public exposure of personal data of our employees or customers, each of which could affect our revenue, business, results of operations and financial condition.
There is risk that the use of social media by us, brand ambassadors, employees, executives, or board members to communicate about our business or other matters may give rise to liability, damage our brand, or result in public exposure of personal data of our employees or customers, each of which could affect our revenue, business, results of operations and financial condition.
In addition, non-compliance with applicable privacy laws and regulations by us (or in some 44 instances, non-compliance by third parties engaged by us), including accidental loss, inadvertent disclosure, unapproved dissemination or a breach of security on systems storing our data, may result in damage to our reputation and subject us to fines, damages, lawsuits or restrictions on our use or transfer of data.
In addition, non-compliance with applicable privacy laws and regulations by us (or in some instances, non-compliance by third parties engaged by us), including accidental loss, inadvertent disclosure, unapproved dissemination or a breach of security on systems storing our data, may result in damage to our reputation and subject us to fines, damages, lawsuits or restrictions on our use or transfer of data.
Further, it is possible that future orders issued by, or inquiries or enforcement actions initiated by, government or regulatory authorities could cause us to incur substantial costs, expose us to unanticipated liability or penalties, or require us to change our business practices in a manner materially adverse to our business, financial condition, results of operations and prospects.
Further, it is possible that future orders issued by, or inquiries or enforcement actions initiated by, government or regulatory authorities could cause us to incur substantial costs, expose us 57 to unanticipated liability or penalties, or require us to change our business practices in a manner materially adverse to our business, financial condition, results of operations and prospects.
In addition, RSILP is generally prohibited under Delaware law from making distributions to partners to the extent that, at the time of the distribution, after giving effect to the distribution, RSILP’s liabilities (with certain exceptions) exceed the fair value of its assets. RSILP’s subsidiaries are generally subject to similar legal limitations on their ability to make distributions to RSILP.
In addition, RSILP is generally prohibited under Delaware law from making distributions to partners to the extent that, at the time of 53 the distribution, after giving effect to the distribution, RSILP’s liabilities (with certain exceptions) exceed the fair value of its assets. RSILP’s subsidiaries are generally subject to similar legal limitations on their ability to make distributions to RSILP.
Further, programming errors, defects and data corruption could disrupt our operations, adversely affect our customers’ experience, harm our reputation, cause our customers to stop using our platform or offerings, divert our resources or delay market acceptance of our offerings, any of which could result in legal liability to us or harm our business, financial condition, results of operations and prospects.
Further, programming errors, defects and data corruption could disrupt our operations, adversely affect our customers’ experience, harm our reputation, cause 42 our customers to stop using our platform or offerings, divert our resources or delay market acceptance of our offerings, any of which could result in legal liability to us or harm our business, financial condition, results of operations and prospects.
These laws and regulations are dynamic and subject to potentially differing interpretations, and various legislative and regulatory bodies may expand current laws or regulations or enact new ones regarding these matters, in particular with respect to marketing, advertising, promotional activities and responsible gaming. We strive to comply with all applicable laws and regulations relating to our business.
These laws and regulations are dynamic and subject to potentially differing interpretations, and various legislative and regulatory bodies may expand current laws or regulations or enact new ones regarding these matters, in particular with respect to marketing, advertising, promotional activities and responsible gaming. We strive to comply with 39 all applicable laws and regulations relating to our business.
You will not have the same protections as those afforded to stockholders of companies that are subject to such governance requirements. • The Tax Receivable Agreement (the “Tax Receivable Agreement” or “TRA”), requires the Special Limited Partner to pay to the Sellers and/or the exchanging holders of RSILP Units, as applicable, 85% of the net income tax savings that we and our consolidated subsidiaries (including the Special Limited Partner) realize as a result of increases in tax basis in RSILP’s assets related to the transactions contemplated under the Business Combination Agreement and the future exchange of the Retained RSILP Units (for shares of Class A Common Stock (or cash) pursuant to the RSILP A&R LPA and tax benefits related to entering into the TRA, including tax benefits attributable to payments under the TRA, and those payments may be substantial.
You will not have the same protections as those afforded to stockholders of companies that are subject to such governance requirements. • The Tax Receivable Agreement (the “Tax Receivable Agreement” or “TRA”), requires the Special Limited Partner to pay to the Sellers (as defined below) and/or the exchanging holders of RSILP Units (as defined below), as applicable, 85% of the net income tax savings that we and our consolidated subsidiaries (including the Special Limited Partner) realize as a result of increases in tax basis in RSILP’s assets related to the transactions contemplated under the Business Combination Agreement and the future exchange of the Retained RSILP Units (as defined below) (for shares of Class A Common Stock (as defined below) (or cash) pursuant to the RSILP A&R LPA and tax benefits related to entering into the TRA, including tax benefits attributable to payments under the TRA, and those payments may be substantial.
Losing any of our executives or other key employees could harm our business. • Clear errors in posting sports betting odds or event information have occurred occasionally, resulting in large liabilities. To date, general industry practice has been to void bets associated with such clear errors or to correct the odds.
Losing any of our executives or other key employees could harm our business. 23 • Clear errors in posting sports betting odds or event information have occurred occasionally, resulting in large liabilities. To date, general industry practice has been to void bets associated with such clear errors or to correct the odds.
Litigation and other claims and regulatory proceedings against us could result in unexpected 57 disciplinary actions, expenses and liabilities, which could have a material adverse effect on our business, financial condition, results of operations and prospects. We could be subject to future governmental investigations and inquiries, legal proceedings and enforcement actions.
Litigation and other claims and regulatory proceedings against us could result in unexpected disciplinary actions, expenses and liabilities, which could have a material adverse effect on our business, financial condition, results of operations and prospects. We could be subject to future governmental investigations and inquiries, legal proceedings and enforcement actions.
Customer engagement in our offerings may vary due to numerous factors, including customers satisfaction with our platform, the number, timing and type of sporting events, the length of sports seasons, our offerings and those of our competitors, other forms of entertainment available to our customers, our marketing efforts, weather conditions, public sentiment or macroeconomic conditions.
Customer engagement in our offerings may vary due to numerous factors, including customers satisfaction with our platform, the number, timing and type of sporting events, the length of sports seasons, our offerings and those of our competitors, other forms of entertainment available to our customers, our marketing efforts, weather conditions, public sentiment and macroeconomic conditions.
Certain states, including Delaware, Michigan, Nevada, New Jersey, and West Virginia, have joined the Multi-State Internet Gaming Agreement (the “MSIGA”) and enacted related legislation and regulations to permit interstate online poker operations, and it is likely that additional states will join the MSIGA in the future.
Certain states, including Delaware, Michigan, Nevada, New Jersey, Pennsylvania, and West Virginia, have joined the Multi-State Internet Gaming Agreement (the “MSIGA”) and enacted related legislation and regulations to permit interstate online poker operations, and it is likely that additional states will join the MSIGA in the future.
In particular, we can be held accountable by regulatory authorities for actions by such third parties in contravention of our license in a given jurisdiction, which in turn may lead to fines, license suspension, loss of license or other censure, which may in turn harm our business, our prospects and/or our financial performance.
In particular, we can be held accountable by regulatory authorities for actions by such third parties in contravention of our license in a given jurisdiction, which in turn may lead to fines, license suspension, loss of license or other censure, which may in turn harm our business, 29 our prospects and/or our financial performance.
These laws and regulations vary among jurisdictions and future legislative and regulatory action, court decisions or other governmental action, which may be affected by, among other things, political pressures, attitudes and climates, as well as personal biases, may have a material impact on our operations and financial results.
Additionally, these laws and regulations vary among jurisdictions and future legislative and regulatory action, court decisions or other governmental action, which may be affected by, among other things, political pressures, attitudes and climates, as well as personal biases, may have a material impact on our operations and financial results.
The extent to which global pandemics or similar health emergencies may impact our business going forward will depend on factors such as the duration and scope of the pandemic or emergency; 58 governmental, business and individuals’ responses to the pandemic or emergency; and the impact on economic activity including the possibility of recession or financial market instability.
The extent to which global pandemics or similar health emergencies may impact our business going forward will depend on factors such as the duration and scope of the pandemic or emergency; governmental, business and individuals’ responses to the pandemic or emergency; and the impact on economic activity including the possibility of recession or financial market instability.
While we intend to continue investing in our research and development efforts, if new or enhanced offerings fail to engage our customers or partners, we may fail to attract or retain customers or to generate sufficient revenue, margin or other value to justify our investments, any of which may seriously harm our business.
While we intend to continue investing in our research and development efforts, if new or enhanced offerings fail to engage our customers or partners, we may fail to attract or retain customers or to generate sufficient revenue, margin or other value to justify our investments, any of which may seriously 31 harm our business.
Legislation could be proposed and passed in jurisdictions relevant or potentially relevant to our business to prohibit, legislate or regulate various aspects of the online and retail gaming industries (or that existing laws in those jurisdictions could be subject to challenge, be interpreted or enforced negatively or could be invalidated or otherwise deemed to be unconstitutional).
Legislation could be proposed and passed in jurisdictions relevant or potentially relevant to our business to prohibit, legislate or regulate various aspects of the online and retail gaming industries (or that existing laws in those jurisdictions could be subject to challenge, be interpreted or enforced negatively or could be invalidated or otherwise deemed to be 37 unconstitutional).
As a result, in certain circumstances the Special Limited Partner could make payments under the TRA in excess of our and our consolidated subsidiaries’ (including the Special Limited Partner’s) actual income or franchise tax savings, which could materially impair our and our consolidated subsidiaries’ (including the Special Limited Partner’s) financial condition.
As a result, in certain circumstances the Special Limited Partner could make payments under the TRA in excess of our and our consolidated subsidiaries’ (including the Special Limited Partner’s) actual income or franchise tax 54 savings, which could materially impair our and our consolidated subsidiaries’ (including the Special Limited Partner’s) financial condition.
We expect our operating expenses to increase in the future as we expand our operations in existing and new markets. Furthermore, as a public 36 company we have incurred and expect to continue to incur additional legal, accounting and other expenses that we did not incur as a private company.
We expect our operating expenses to increase in the future as we expand our operations in existing and new markets. Furthermore, as a public company we have incurred and expect to continue to incur additional legal, accounting and other expenses that we did not incur as a private company.
A significant reduction of this player liquidity, or any legislative or regulatory measures taken that may reduce that liquidity, could have a material adverse impact on the attractiveness of those products as well as eroding their competitive strengths.
A significant reduction of this player 35 liquidity, or any legislative or regulatory measures taken that may reduce that liquidity, could have a material adverse impact on the attractiveness of those products as well as eroding their competitive strengths.
Various national and local privacy laws also regulate tracking individuals who visit our websites and the use of tracking technologies, including web beacons and cookies. We are obligated to permit individuals to choose how we use and store their information.
Various national and local privacy laws also regulate tracking individuals who visit our websites and the use of tracking technologies, including pixels, web beacons and cookies. We are obligated to permit individuals to choose how we use and store their information.
States also impose substantial taxes on online sports betting and online gaming revenue, in addition to sales taxes in certain jurisdictions and a U.S. federal excise tax of 25 basis points on the amount of each wager.
Jurisdictions also impose substantial taxes on online sports betting and online gaming revenue, in addition to sales taxes in certain jurisdictions and a U.S. federal excise tax of 25 basis points on the amount of each wager.
Any of these events could seriously harm our business, financial condition, results of operations and prospects. 43 We license certain trademarks and domain names to RSG and its affiliates, and RSG’s and its affiliates’ use of such trademarks and domain names may harm our business.
Any of these events could seriously harm our business, financial condition, results of operations and prospects. We license certain trademarks and domain names to RSG and its affiliates, and RSG’s and its affiliates’ use of such trademarks and domain names may harm our business.
Adverse developments affecting economies throughout the world, including those noted above as well as a general tightening of credit availability, decreased liquidity in certain financial markets, foreign exchange fluctuations, transportation or supply chain disruptions, natural disasters or significant declines in stock markets, as well as concerns regarding pandemics or other health emergencies, could lead to reductions in discretionary spending on leisure activities such as online casino and sports betting.
Adverse developments affecting economies throughout the world, including those noted above as well as a general tightening of credit availability, decreased liquidity in certain financial markets, foreign exchange fluctuations, transportation or supply chain disruptions, natural disasters or significant declines in stock markets, as well as concerns regarding pandemics or other health emergencies, could lead to reduced discretionary spending on leisure activities such as online casino and sports betting.
Even if our new offerings attain market acceptance, those new offerings could cannibalize the market share of our existing offerings or share of our customers’ wallets in a manner that could negatively impact their 31 ecosystem.
Even if our new offerings attain market acceptance, those new offerings could cannibalize the market share of our existing offerings or share of our customers’ wallets in a manner that could negatively impact their ecosystem.
On June 4, 2021, the European Commission published new SCCs for this purpose, and we may have to adapt our existing contractual arrangements to meet these new requirements.
On June 4, 2021, the European Commission published new SCCs for this purpose, and we may have to adapt 38 our existing contractual arrangements to meet these new requirements.
This license may be either exclusive or non-exclusive based on the field of use and the particular trademark or domain name. This license precludes our use of certain trademarks and domain names in the exclusive fields of use.
This license may be either exclusive or non-exclusive based on the field of use and the particular trademark or domain name. This license precludes our use of certain 43 trademarks and domain names in the exclusive fields of use.
Notwithstanding that in some jurisdictions for license purposes we are deemed to control these “affiliates” marketers, their actions in the marketing of our brands are not directly within our control and hence actions, errors, omissions or intentional malfeasance on their part may cause damage to our brands, our business, our prospects and our financial results before we are able to detect such actions, errors, omissions or intentional malfeasance and/or do anything to mitigate the effects thereof.
Despite that, in some jurisdictions for license purposes we are deemed to control these “affiliates” marketers, their actions in the marketing of our brands are not directly within our control and hence actions, errors, omissions or intentional malfeasance on their part may cause damage to our brands, our business, our prospects and our financial results before we are able to detect such actions, errors, omissions or intentional malfeasance and/or do anything to mitigate the effects thereof.
For more information, See “ Due to the nature of our business, we are subject to taxation in numerous jurisdictions, and changes in or new interpretation of tax laws, tax rulings or their application by tax authorities could result in additional tax liabilities and could materially affect our business, financial condition, results of operations and prospects .” As a result of our international operations, we are subject to a variety of risks and challenges in managing an organization operating in various countries, including those related to: • differing labor and employment laws, rules, regulations and practices, including different employee/employer relationships, existence of works councils and labor unions, and other challenges caused by distance, language, cultural and time zone differences; • general economic conditions in the foreign jurisdictions where we have operations (and any other jurisdictions where we pursue non-U.S. opportunities); • political unrest, government instability, global trade wars and disputes, tariffs, terrorism and the potential for other hostilities such as the evolving conflict in the Middle East, where some of our suppliers are located or have operations and personnel; • public health risks, particularly in areas in which we have significant operations; • constantly evolving geopolitical environment, international and domestic political, regulatory and economic landscapes, including trends like populism, nationalism and negative sentiment toward multinational companies; • capital controls, difficulties in transferring funds from certain countries, managing foreign exchange rate fluctuations and risks, trade actions, tariffs, export controls and sanctions; • overlapping or changes in tax regimes; • laws and regulations such as the U.S.
For more information, see “ Due to the nature of our business, we are subject to taxation in numerous jurisdictions, and changes in or new interpretation of tax laws, tax rulings or their application by tax authorities could result in additional tax liabilities 34 and could materially affect our business, financial condition, results of operations and prospects .” As a result of our international operations, we are subject to a variety of risks and challenges in managing an organization operating in various countries, including those related to: • differing labor and employment laws, rules, regulations and practices, including different employee/employer relationships, existence of works councils and labor unions, and other challenges caused by distance, language, cultural and time zone differences; • general economic conditions in the foreign jurisdictions where we have operations (and any other jurisdictions where we pursue non-U.S. opportunities); • political unrest, government instability, global trade wars and disputes, tariffs, terrorism and the potential for other hostilities such as the uncertainty and fragile cease fire in the Middle East, where some of our suppliers are located or have operations and personnel; • public health risks, particularly in areas in which we have significant operations; • constantly evolving geopolitical environment, international and domestic political, regulatory and economic landscapes, including trends like populism, nationalism and negative sentiment toward multinational companies; • capital controls, difficulties in transferring funds from certain countries, managing foreign exchange rate fluctuations and risks, trade actions, tariffs, export controls and sanctions; • overlapping or changes in tax regimes; • laws and regulations such as the U.S.
California has enacted the California Consumer Privacy Act as amended by the California Privacy Rights Acts, a comprehensive privacy law, which provides some of the strongest U.S. privacy requirements to date.
California enacted the California Consumer Privacy Act as amended by the California Privacy Rights Acts, a comprehensive privacy law, which provides some of the strongest U.S. privacy requirements to date.
We are subject to the reporting requirements of the Securities Exchange Act of 1934 (the “Exchange Act”) and must comply with the applicable requirements of the Sarbanes-Oxley Act and the Dodd-Frank Wall Street Reform and Consumer Protection Act, the rules and regulations implemented by the SEC and the listing standards of the New York Stock Exchange (the “NYSE”), including applicable corporate governance and disclosure and financial controls requirements.
Additionally, we are subject to the reporting requirements of the Securities Exchange Act of 1934 (the “Exchange Act”) and must comply with the applicable requirements of the Sarbanes- 36 Oxley Act and the Dodd-Frank Wall Street Reform and Consumer Protection Act, the rules and regulations implemented by the SEC and the listing standards of the New York Stock Exchange (the “NYSE”), including applicable corporate governance and disclosure and financial controls requirements.
Such errors have in certain instances resulted in large liabilities as well as potential regulatory fines and reputational damage. When such errors occur, it is currently commonly accepted in nearly all jurisdictions for operators to void bets associated with such clear errors. In mature jurisdictions, bets based upon clear error can be voided without prior regulatory approval.
Such errors have in certain instances resulted in large liabilities, potential regulatory fines and reputational damage. When such errors occur, it is currently commonly accepted in nearly all jurisdictions for operators to void bets associated with such clear errors. In mature jurisdictions, bets based upon clear error can be voided without prior regulatory approval.
Among others, we are, or may become, subject to the following laws and regulations: • The General Data Protection Regulation, which may apply to our activities to the extent conducted from an establishment in the European Union (the “EU”) or related to products and services that we offer to EU users or customers, or the monitoring of their behavior in the EU.
Among others, we are, or may become, subject to the following laws and regulations: • The General Data Protection Regulation, which may apply to our activities to the extent conducted from an establishment in the European Union (the “EU”) or related to products and services that we offer to EU users or customers (if any), or the monitoring of their behavior in the EU.
Emerging ethical issues surround the use of AI or generative AI, and if our use of AI or generative AI becomes controversial, we may be subject to reputational risk.
Emerging ethical issues surround the use of AI or generative AI. If our use of AI or generative AI becomes controversial, we may be subject to reputational risk.
We compete against other providers of online or retail sports betting and online or bricks-and-mortar casino, which includes operators of sweepstakes casinos/sportsbooks, charitable gaming, video gaming terminals, crypto casinos, illegal gambling operations, skill games and fantasy sports, as well as against providers of online and mobile entertainment and leisure products more generally.
We compete against other providers of online or retail sports betting and online or bricks-and-mortar casino, which includes operators of sweepstakes casinos/sportsbooks, charitable gaming, video gaming terminals, crypto casinos, prediction markets, illegal gambling operations, skill games and fantasy sports, as well as against providers of online and mobile entertainment and leisure products more generally.
Internet service providers and other technology-based service providers may in the future roll out upgraded or new mobile or other telecommunications services, such as 6G services, which may not be successful and thus may impact our customers’ ability to access our platform or offerings in a reasonable fashion or at all.
Internet service providers and other technology-based service providers may in the future roll out upgraded or new mobile or other telecommunications services, such as 6G services, which may not be successful and thus may impact our customers’ ability to access our platform or offerings in a reasonable manner or at all.
Successful promotion of our brand will depend on a number of factors, including the effectiveness of our marketing efforts, our thought leadership, our ability to provide a high-quality, reliable and cost-effective platform, the actions of our employees, executives, and board members, the perceived value of our platform and products, and our ability to provide quality customer success and support experience.
Successful promotion of our brand will depend on a number of factors, including the effectiveness of our marketing efforts, our thought leadership, our ability to provide a high-quality and reliable platform, the actions of our employees, executives, and board members, the perceived value of our platform and products, and our ability to provide quality customer success and support experience.
Our customers primarily access our online sports betting and online casino offerings through our app on their mobile devices, and we believe that this will continue going forward. To enable our customers to use our offerings through our app on their mobile devices, our app must be compatible with the major mobile operating systems such as iOS and Android.
Our customers primarily access our online sports betting and online casino offerings through our app on their mobile devices, and we expect that this will continue going forward. To enable our customers to use our offerings through our app on their mobile devices, our app must be compatible with the major mobile operating systems such as iOS and Android.
Our agreements with such marketers are sometimes such that we are obliged to pay them an ongoing share of revenues derived from customers that they introduce to us, or sometimes such that we are required to pay them a “cost per acquisition” capitation fee for each customer introduced, or sometimes a 29 combination of both.
Our agreements with such marketers are sometimes such that we are obliged to pay them an ongoing share of revenues derived from customers that they introduce to us, or sometimes such that we are required to pay them a “cost per acquisition” fee for each customer introduced, or sometimes a combination of both.
The element of chance may affect win rates (hold percentages); these win rates, particularly for sports betting, may also be affected in the short term by factors largely beyond our control, such as unanticipated event outcomes, a customer’s skill, experience and behavior, the mix of games played or bets placed, customer financial resources, the volume of bets placed and the amount of time spent gambling.
The element of chance may affect win rates (hold percentages); these win rates, particularly for sports betting, may also be affected in the short term by factors largely beyond our control like unanticipated event outcomes, a customer’s skill, experience and behavior, the mix of games played or bets placed, customer financial resources, the volume of bets placed and the amount of time spent gambling.
The use of AI (and, in particular, generative AI) can lead to unintended consequences, including the generation of outputs that appear correct but are factually inaccurate, misleading, or are otherwise flawed, which could harm our reputation and business.
Using AI (and, in particular, generative AI) can lead to unintended consequences, including the generation of outputs that appear correct but are factually inaccurate, misleading or are otherwise flawed, which could harm our reputation and business.
The Company entered into an Investor Rights Agreement (the “Investor Rights Agreement”), pursuant to which, as long as the Company is a “controlled company” under applicable NYSE rules, Rush Street Interactive GP, LLC, in its capacity as the Sellers’ Representative of the Controlling Holders and the other Sellers under the Business Combination Agreement (in such capacity, the “Sellers’ Representative”) and dMY Sponsor, LLC (the “Sponsor”) will have the right to nominate up to nine (or the maximum number that may be nominated by the Sellers’ Representative without violating the NYSE’s controlled company requirements) and up to two directors, respectively, to the Board, subject to certain independence and holdings requirements.
The Company entered into an Investor Rights Agreement (the “Investor Rights Agreement”), pursuant to which, as long as the Company is a “controlled company” under applicable NYSE rules, Rush Street Interactive GP, LLC, in its capacity as the Sellers’ Representative of the Controlling Holders and the other holders of equity interests of RSILP (the “Sellers”) under the Business Combination Agreement (in such capacity, the “Sellers’ Representative”) and dMY Sponsor, LLC (the “Sponsor”) have the right to nominate up to nine (or the maximum number that may be nominated by the Sellers’ Representative without violating the NYSE’s controlled company requirements) and up to two directors, respectively, to the Board, subject to certain independence and holdings requirements.
Fines of up to 2% of annual worldwide revenues can be levied for other specified violations; and 38 • Various state privacy laws, many of which give new data privacy rights to their respective residents (including, in California, a private right of action in the event of a data breach resulting from our failure to implement and maintain reasonable security procedures and practices) and impose significant obligations on controllers and processors of consumer data.
Fines of up to 2% of annual worldwide revenues can be levied for other specified violations; and • Various state, country and province privacy laws, many of which give new data privacy rights to their respective residents (including, for example, in California, a private right of action in the event of a data breach resulting from our failure to implement and maintain reasonable security procedures and practices) and impose significant obligations on controllers and processors of consumer data.
In the United States, certain types of cookies may be deemed sales of personal information within the CCPA and other state laws, such that certain disclosure requirements and limitations apply to the use of such cookies.
For example, in the United States, certain types of cookies may be deemed sales of personal information within the CCPA and other state laws, such that certain disclosure requirements and limitations apply to the use of such cookies.
For example, certain jurisdictions require us to have a relationship with a local partner for online sportsbook or online gaming access, which tends to increase our costs of revenue. States with state-run monopolies may limit opportunities for private sector participants like us.
For example, certain jurisdictions require us to have a relationship with a local partner for online sportsbook or online gaming access, which tends to increase our costs of revenue. Jurisdictions with government-run monopolies may limit opportunities for private sector participants like us.
The validity of data transfer mechanisms remains subject to legal, regulatory and political developments in both Europe and the United States, such as recent recommendations from the European Data Protection Board, decisions from supervisory authorities, recent proposals for reform of the data transfer mechanisms for transfers of personal data outside the United Kingdom, and potential invalidation of other data transfer mechanisms, which, together with increased enforcement action from supervisory authorities in relation to cross-border transfers of personal data, could have a significant adverse effect on our ability to process and transfer personal data outside of the European Economic Area and/or the United Kingdom.
The validity of data transfer mechanisms remains subject to legal, regulatory and political developments in Europe, Latin America, Canada, and the United States, such as recent recommendations from the European Data Protection Board, decisions from supervisory authorities, recent proposals for reform of the data transfer mechanisms for transfers of personal data outside the United Kingdom, and potential invalidation of other data transfer mechanisms, which, together with increased enforcement action from supervisory authorities in relation to cross-border transfers of personal data, could have a significant adverse effect on our ability to process and transfer personal data outside of the European Economic Area, the United Kingdom, Canada, and/or Latin American regions.
Gaming companies are subject to significant taxes such as gaming taxes, and fees in addition to corporate income taxes, and such taxes and fees are subject to increase at any time.
Gaming companies are subject to significant taxes such as gaming taxes, and fees in addition to corporate income taxes, and such taxes and fees are subject to increase or modification at any time.
We cannot provide assure that we will be able to attract and maintain sufficient player liquidity in our online poker products.
We cannot provide assurance that we will be able to attract and maintain sufficient player liquidity in our online poker products.
As a growing company with expanding operations, we may from time to time increasingly face the risk of claims, lawsuits and other proceedings involving intellectual property, privacy and data protection, consumer protection, accessibility claims, securities, tax, labor and employment, regulatory and compliance, competition and antitrust, commercial disputes, services and other matters.
As a growing company with expanding operations, from time to time we increasingly face claims, lawsuits and other proceedings involving intellectual property, privacy and data protection, consumer protection, accessibility claims, securities, tax, labor and employment, regulatory and compliance, competition and antitrust, commercial disputes, services and other matters.
Our online poker offerings are a peer-to-peer offering, meaning players play against each other instead of against the house. Consequently, the success of our online poker offerings is largely dependent on high levels of player liquidity (i.e., high levels of players available to play in the online poker offerings at any given time).
Our online poker offerings are a peer-to-peer offering, meaning players play against each other instead of against the house. Consequently, the success of our online poker offerings largely depend on high levels of player liquidity (i.e., high levels of players available to play our online poker offerings at any given time).
RSILP is a partnership for U.S. federal income tax purposes and, as such, generally will not be subject to any entity-level U.S. federal income tax. Instead, taxable income will be allocated for U.S. federal income tax purposes to the holders of RSILP Units, including RSI ASLP, Inc.
RSILP is a partnership for U.S. federal income tax purposes and, as such, generally will not be subject to any entity-level U.S. federal income tax. Instead, taxable income will be allocated for U.S. federal income tax purposes to the holders of RSILP Class A common units (the “RSILP Units”), including RSI ASLP, Inc.
Losing any of our executives or other key employees could harm our business. We depend on certain key personnel to manage and operate our business, including both our Executive Chairman and our CEO.
Losing any of our executives or other key employees could harm our business. We depend on certain key personnel to manage and operate our business, including our Executive Chairman, CEO and President and CFO.
The number and amount of betting losses and jackpot payouts we experience also impact our financial results. Although our losses are limited per wager to a maximum payout, when viewed over a period of time, these losses can be significant. We offer progressive jackpot games in our online casino offerings.
The number and amount of betting losses and jackpot payouts we experience also impact our financial results. Although our losses are limited per wager to a maximum payout, when viewed over a period of time, these losses can be significant. Additionally, we offer progressive jackpot games.
These developments could require us to make changes to how we collect information on, and track the actions of, our users and impact our marketing activities.
These developments could require us to change how we collect information on, and track the actions of, our users and impact our marketing activities.
For example, as competition increases, we may need to lower our margins in order to attract or retain customers. Further, as we expand to become a more national brand, we may need to increase our marketing spending to compete more effectively.
Competitive pressures may also adversely affect our margins. For example, as competition increases, we may need to lower our margins in order to attract or retain customers. Further, as we expand to become a more national brand, we may need to increase our marketing spending to compete more effectively.
Emerging technologies, such as blockchain and cryptocurrency, may disrupt traditional gaming models and create new competitive threats for us. The gaming industry is constantly evolving, and emerging technologies have the potential to disrupt traditional business models and create new competitive landscapes.
Emerging technologies and products, such as sports-based prediction markets, blockchain and cryptocurrency, may disrupt traditional gaming models and create new competitive threats for us. The gaming industry is constantly evolving, and emerging technologies have the potential to disrupt traditional business models and create new competitive landscapes.
If our revenue does not grow at a greater rate than our expenses, we may be unable to remain profitable. We may incur significant losses in the future for many reasons, including those described in the other risks and uncertainties described in this Annual Report.
If our revenue does not grow at a greater rate than our expenses, we may be unable to maintain or increase our level of profitability. We may incur significant losses in the future for many reasons, including those described in the other risks and uncertainties described in this Annual Report.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeOur Chief Information Officer, who has information technology, engineering, product and security knowledge, experience and skills gained over a decade of experience leading product and engineering organizations, our Chief Information Security Officer, who also has over two decades of cybersecurity experience in both public and private organizations, and certain members of their teams as well as outside advisors who have cybersecurity experience are responsible for implementing and maintaining cybersecurity and data protection practices at the Company and reporting on cybersecurity matters to the relevant members of management.
Biggest changeOur Chief Technology Officer, who has engineering, operations, product, information technology and security knowledge, experience and skills gained over two decades of experience leading complex, large-scale global technology organizations across media, entertainment, sports and retail, our Chief Information Security Officer, who also has over two decades of cybersecurity experience in both public and private organizations, and certain members of their teams as well as 59 outside advisors who have cybersecurity experience are responsible for implementing and maintaining cybersecurity and data protection practices at the Company and reporting on cybersecurity matters to the relevant members of management.
We also generally require third parties to, among other things, maintain security controls to protect confidential information and data, and generally notify us of any data breaches that may impact our data through obligations that are documented in data processing or other agreements. In addition, we carry insurance that provides certain, limited protection against losses arising from a cybersecurity incident.
We also generally require third parties to, among other things, maintain security controls to protect confidential information and data and notify us of data breaches that may impact our data through obligations that are documented in data processing or other agreements. In addition, we carry insurance that provides certain, limited protection against losses arising from a cybersecurity incident.
Through its regular meetings with management, including the accounting and finance, legal, internal audit, regulatory compliance and information technology and security functions, the Audit Committee reviews and discusses our cybersecurity risk management 59 practices and policies and periodically updates the Board or relevant members or committees thereof, about any material risks and the appropriate mitigating factors.
Through its regular meetings with management, including the accounting and finance, legal, internal audit, regulatory compliance and information technology and security functions, the Audit Committee reviews and discusses our cybersecurity risk management practices and policies and periodically updates the Board or relevant members or committees thereof, about any material risks and the appropriate mitigating factors.
These trainings are mandatory for all employees and take place throughout the year, and it is supplemented by testing initiatives, including periodic phishing tests. We also provide access to specialized training for certain employee roles, such as application developers. Finally, our privacy and data protection program requires all employees to take periodic awareness training on data privacy.
These trainings are mandatory for all employees and take place throughout the year, and are supplemented by testing initiatives, including periodic phishing tests. We also provide access to specialized training for certain employee roles, such as application developers. Finally, our privacy and data protection program requires employees to take periodic awareness training on data privacy.
For instance, we periodically perform simulations and tabletop exercises for our technical teams and senior leaders to prepare for a possible cyber crisis and incorporate external resources and advisors as needed. We also engage third-party consultants and service providers to assist with penetration testing, security audits and vulnerability assessments in certain jurisdictions.
For instance, we have performed simulations and tabletop exercises for our technical teams and senior leaders to prepare for a possible cyber crisis and incorporate external resources and advisors as needed. We also engage third-party consultants and service providers to assist with penetration testing, security audits and vulnerability assessments in certain jurisdictions.
We generally gather information, usually through questionnaires, from certain third parties who contract with the Company and receive sensitive data from us or have access to or integrate with our systems, in order to help us assess potential risks associated with their security processes.
We generally gather information, either through independent research or through questionnaires, regarding certain third parties who contract with the Company and receive sensitive data from us or have access to or integrate with our systems, in order to help us assess potential risks associated with their security processes.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeThis lease is set to expire on April 30, 2025, subject to our option to extend the term for two successive years. We also lease office space in the United States (New Jersey and North Dakota), Colombia (Bogota and Medellin), Estonia (Tartu and Tallinn), Canada (Toronto) and Serbia (Belgrade).
Biggest changeThis lease is set to expire on April 30, 2027, subject to our option to extend the term for two successive years. We also lease office space in the United States (New Jersey and North Dakota), Colombia (Bogota and Medellín), Estonia (Tartu and Tallinn), Canada (Toronto) and Serbia (Belgrade).

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeIn our opinion, the amount of ultimate liability with respect to any of these actions is unlikely to materially affect our financial condition, results of operations or liquidity, though the outcomes could be material to our operating results for any particular period, depending, in part, upon the operating results for such period. ITEM 4.
Biggest changeIn our opinion, the amount of ultimate liability with respect to any of these actions is unlikely to materially affect our financial condition, results of operations or liquidity, though the outcomes could be material to our operating results for any particular period, depending, in part, upon the operating results for such period. ITEM 4. MINE SAFETY DISCLOSURES Not applicable.
Removed
MINE SAFETY DISCLOSURES Not applicable. 60 PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeFebruary 2020 December 2020 December 2021 December 2022 December 2023 December 2024 Rush Street Interactive, Inc. $100 $210 $160 $35 $44 $133 S&P 500 Consumer Discretionary Index $100 $134 $166 $104 $146 $189 NYSE Composite $100 $111 $131 $116 $128 $145 Recent Sales of Unregistered Securities None.
Biggest changeDecember 2020 December 2021 December 2022 December 2023 December 2024 December 2025 Rush Street Interactive, Inc. $100 $76 $17 $21 $63 $90 S&P 500 Consumer Discretionary Index $100 $124 $77 $109 $141 $148 NYSE Composite $100 $118 $105 $116 $131 $151 Recent Sales of Unregistered Securities None.
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Market Information & Stockholders Our Class A Common Stock is quoted on the NYSE under the symbol “RSI”. There is no public market for our Class V Voting Stock.
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Market Information & Stockholders Our Class A Common Stock is quoted on the NYSE under the symbol “RSI”.
The graph assumes an initial investment of $100 in our Class A Common Stock at the market close on February 21, 2020, which was our initial trading day. Data for the S&P 500 Consumer Discretionary Index and the NYSE Composite Index assume reinvestment of dividends. Total return equals stock price appreciation plus reinvestment of dividends.
The graph assumes an initial investment of $100 in our Class A Common Stock at the market close on December 31, 2020 through December 31, 2025. Data for the S&P 500 Consumer Discretionary Index and the NYSE Composite Index assume reinvestment of dividends. Total return equals stock price appreciation plus reinvestment of dividends.
As of February 27, 2025, there were 34 holders of record of our Class A Common Stock and 16 holders of record of our Class V Voting Stock.
There is no public market for our Class V Voting Stock. 60 As of February 17, 2026, there were 26 holders of record of our Class A Common Stock and 17 holders of record of our Class V Voting Stock.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeThis key metric represents our ability to drive usage and monetization of our online offerings. 66 The chart below presents our ARPMAU in the United States and Canada for the years ended December 31, 2024, 2023 and 2022: The year-over-year increase in ARPMAU in the United States and Canada for 2024 compared to 2023, as well as for 2023 compared to 2022, was mainly due to MAU growth in online casino markets, including Delaware, outpacing that of sportsbetting only markets, the impact of our strategic advertising and marketing efforts and our focus on retaining quality players.
Biggest changeThe year-over-year increase for 2024 compared to 2023 was mainly due to MAU growth in online casino markets, including Delaware, outpacing that of sports betting only markets, the impact of our strategic advertising and marketing efforts and our focus on retaining quality players. 66 The chart below presents our ARPMAU in Latin America (including Mexico) for the years ended December 31, 2025, 2024 and 2023: The year-over-year decrease in ARPMAU in Latin America for 2025 compared to 2024 was mainly driven by the negative impact of our additional player bonusing as a result of the value-added tax imposed on customer deposits in Colombia, which became effective during the year ended December 31, 2025.
In this scenario, revenue is generated based on total customer bets less amounts paid to customers for winning bets, less other incentives awarded to customers, plus or minus the change in unsettled retail sports bets. Social Gaming We provide social gaming (where permitted) where users can earn or purchase virtual credits to enjoy free-to-play games.
In this scenario, revenue is generated based on total customer bets less amounts paid to customers for winning bets, less other incentives awarded to customers, plus or minus the change in unsettled retail sports bets. Social Gaming We provide social gaming where users can earn or purchase (where permitted) virtual credits to enjoy free-to-play games.
Our marketing spend is based on a return-on-investment model that considers a variety of factors, including the product offerings in the jurisdiction, local advertising rules, the performance of different marketing channels, predicted lifetime value, marginal costs and expenses and behavior of customers across various product offerings.
Our marketing spend is based on a return-on-investment model that considers a variety of factors, including the product offerings in the jurisdiction, local advertising rules, the performance of different marketing channels, predicted lifetime value, marginal costs and expenses and behavior of customers across various product offerings.
We generate revenue through rake, or a small commission taken from the total wagers placed on the hand, which is generally subject to a cap, and through tournament entry fees. Like bricks-and-mortar casinos, there is volatility with online casino, but as the number of bets placed increases, the 70 revenue retained from bets placed becomes easier to predict.
We generate revenue through rake, or a small commission taken from the total wagers placed on the hand, which is generally subject to a cap, and through tournament entry fees. Like bricks-and-mortar casinos, there is volatility with online casino, but as the number of bets placed increases, the revenue retained from bets placed becomes easier to predict.
We are also subject to a U.S. federal excise tax of 0.25% on the amount of each sports bet placed in the United States. We believe the jurisdictions that will create the most compelling levels of profitability for us are jurisdictions with both online casino and sports betting at favorable tax rates.
We are also subject to a U.S. federal excise tax of 0.25% on the amount of each sports bet placed in the United 68 States. We believe the jurisdictions that will create the most compelling levels of profitability for us are jurisdictions with both online casino and sports betting at favorable tax rates.
We evaluate the realizability of the deferred tax assets resulting from the exchange of RSILP Units for Class A Common Stock. If the deferred tax assets are determined to be realizable, we then assess whether payment of amounts under the TRA have become probable. If so, we record a TRA liability equal to 85% of such deferred tax assets.
We evaluate the realizability of the deferred tax assets resulting from the exchange of RSILP Units for Class A Common Stock. If the deferred tax assets are determined to be realizable, we then assess whether payment of amounts under the TRA have become probable. If so, we record a TRA liability, generally equal to 85% of such deferred tax assets.
As we prepare to enter new jurisdictions, we expect to face significant competition from other existing industry players, some of which may have more experience in online casino, and online and/or retail sports betting or in one or more of the markets in which we operate or intend to operate, and have 68 access to more resources.
As we prepare to enter new jurisdictions, we expect to face significant competition from other existing industry players, some of which may have more experience in online casino, and online and/or retail sports betting or in one or more of the markets in which we operate or intend to operate, and have access to more resources.
We use a variety of earned media and paid marketing channels, in combination with compelling offers, brand ambassadors, proprietary content and unique game and site features, to attract and engage customers. Further, we continuously optimize our marketing spend using data collected from our operations.
We use a variety of earned media and paid marketing channels, in combination with compelling offers, brand ambassadors, proprietary content and unique game and site features, to attract and engage customers. Further, we continuously optimize our marketing spend using data collected 71 from our operations.
The global gaming and entertainment industry has seen significant consolidation, regulatory change and technological development over the last few years, and we expect this trend to continue into the foreseeable 74 future, which may create opportunities for us but may also create competitive and margin pressures.
The global gaming and entertainment industry has seen significant consolidation, regulatory change and technological development over the last few years, and we expect this trend to continue into the foreseeable future, which may create opportunities for us but may also create competitive and margin pressures.
In assessing the need for a valuation allowance, we make estimates and assumptions regarding projected future taxable income, our ability to carry back operating losses to prior periods, the 77 reversal of deferred tax liabilities and the implementation of tax planning strategies.
In assessing the need for a valuation allowance, we make estimates and assumptions regarding projected future taxable income, our ability to carry back operating losses to prior periods, the reversal of deferred tax liabilities and the implementation of tax planning strategies.
In addition to traditional fixed-odds betting, we also offer other fixed-odd sports betting products including in-game betting and multi-sport and same-game parlay betting. We have also incorporated live streaming of certain sporting events into our online sports betting offering.
In addition to traditional fixed-odds betting, we also offer other fixed-odd sports betting products including in- 70 game betting and multi-sport and same-game parlay betting. We have also incorporated live streaming of certain sporting events into our online sports betting offering.
This information should be read in conjunction with our consolidated financial statements and related notes 72 included elsewhere in this Annual Report. The results of historical periods are not necessarily indicative of the results of operations for any future period.
This information should be read in conjunction with our consolidated financial statements and related notes included elsewhere in this Annual Report. The results of historical periods are not necessarily indicative of the results of operations for any future period.
We expect the number of MAUs to grow as we attract, retain and re-engage users in new and existing jurisdictions and expand our offerings to appeal to a wider audience. 64 The chart below presents our average MAUs in the United States and Canada for the years ended December 31, 2024, 2023 and 2022: The year-over-year increase in MAUs in the United States and Canada for 2024 compared to 2023, as well as for 2023 compared to 2022, was mainly due to our continued growth and strong customer retention rates in existing markets, and our continued achievement of positive response from our strategic advertising and marketing efforts.
We expect the number of MAUs to grow as we attract, retain and re-engage users in new and existing jurisdictions and expand our offerings to appeal to a wider audience. 64 The chart below presents our average MAUs in the United States and Canada for the years ended December 31, 2025, 2024 and 2023: The year-over-year increase in MAUs in the United States and Canada for 2025 compared to 2024, as well as for 2024 compared to 2023, was mainly due to our continued growth and strong customer retention rates in existing markets, and our continued achievement of positive response from our strategic advertising and marketing efforts.
We provide our customers with an array of leading gaming offerings such as real-money online casino, online sports betting and retail sports betting (i.e., sports betting services provided at bricks-and-mortar locations), as well as social gaming, which involves free-to-play games using virtual credits that users can earn or purchase.
We provide our customers with an array of leading gaming offerings such as real-money online casino, online sports betting and retail sports betting (i.e., sports betting services provided at bricks-and-mortar locations), as well as social gaming, which involves free-to-play games using virtual credits that users can earn or purchase (where permitted).
See Note 14 of our consolidated financial statements, included elsewhere in this Annual Report for a summary of our commitments as of December 31, 2024. We also expect certain costs such as marketing, market access and license fees to increase to the extent we pursue expansion opportunities in new and existing jurisdictions.
See Note 14 of our consolidated financial statements, included elsewhere in this Annual Report for a summary of our commitments as of December 31, 2025. We also expect certain costs such as marketing, market access and license fees to increase to the extent we pursue expansion opportunities in new and existing jurisdictions.
Trends in Key Metrics Monthly Active Users MAUs is the number of unique users per month who have placed at least one real-money bet across one or more of our online casino or online sports betting offerings. For periods longer than one month, we average the MAUs for the months in the relevant period.
Trends in Key Metrics Monthly Active Users MAUs is the number of unique users per month who have placed at least one real-money bet across one or more of our online casino (including online poker) or online sports betting offerings. For periods longer than one month, we average the MAUs for the months in the relevant period.
These efforts are concentrated within the specific jurisdictions where we operate or intend to operate. We believe there is significant benefit to having a flexible approach to advertising spending as we can quickly redirect our advertising spending based on dynamic testing of which advertising methods and channels are working and which ones are not.
These efforts are concentrated within the specific jurisdictions where we operate or intend to operate to the extent possible. We believe there is significant benefit to having a flexible approach to advertising spending as we can quickly redirect our advertising spending based on dynamic testing of which advertising methods and channels are working and which ones are not.
Customer engagement in our online offerings may vary due to, among other things, customer satisfaction with our platform, the number, timing and type of sporting events, the length of professional sports seasons, our offerings and marketing efforts and those of our competitors (including those not just in the online gaming industry but also in the entertainment industry broadly), other forms of entertainment available to our customers, weather conditions, public sentiment, an economic downturn or other economic factors such as inflation, economic uncertainty or macroeconomic conditions.
Customer engagement in our online offerings may vary due to, among other things, customer satisfaction with our platform, the number, timing and type of sporting events, the length of professional sports seasons, our offerings and marketing efforts and those of our competitors (including those not just in the online gaming industry but also in prediction markets or in the 73 entertainment industry broadly), other forms of entertainment available to our customers, weather conditions, public sentiment, an economic downturn or other economic factors such as inflation, economic uncertainty or macroeconomic conditions.
In addition, sports betting activity is impacted by the occurrence of periodic events (e.g., Copa América, UEFA, Olympics). From a legislative perspective, we continue to see strong momentum to legalize and regulate online sports betting in new jurisdictions in the Americas.
In addition, sports betting activity is impacted by the occurrence of periodic events (e.g., World Cup, Copa América, UEFA, Olympics). From a legislative perspective, we continue to see strong momentum to legalize and regulate online sports betting in new jurisdictions in the Americas.
Stock Repurchase Program On October 24, 2024, our Board authorized the repurchase of an aggregate of up to $50 million of our Class A Common Stock through open market purchases, privately negotiated transactions or other transactions in accordance with applicable securities laws.
Stock Repurchase Program On October 24, 2024, our Board authorized the repurchase of an aggregate of up to $50 million of our Class A Common Stock through open market purchases, privately negotiated transactions or other transactions in accordance with applicable securities laws (the “Stock Repurchase Program”).
In Latin America, several countries, including Argentina, Ecuador, Brazil and Peru, are either exploring legalizing, expanding or regulating online casino and/or online sports betting, or have recently legalized these activities. The process of securing the necessary licenses or partnerships to operate in a given jurisdiction may take longer than we anticipate.
In Latin America, several countries, including Argentina, Ecuador, Brazil and Peru, are either exploring legalizing, expanding or regulating online casino and/or online sports betting, or have recently legalized these activities. The process of securing the necessary licenses or partnerships to operate in a given jurisdiction may take longer or be more difficult than we anticipate.
A discussion of changes in cash flows in 2023 compared to 2022 has been omitted from this Form 10-K, but it may be found in “Item 7.
A discussion of changes in cash flows in 2024 compared to 2023 has been omitted from this Form 10-K, but it may be found in “Item 7.
Our B2C operations contributed more than 98% of our total revenue for the years ended December 31, 2024 and 2023, and we expect that it will continue to be our primary operating model into the future.
Our B2C operations contributed more than 99% and 98% of our total revenue for the years ended December 31, 2025 and 2024, respectively and we expect that it will continue to be our primary operating model into the future.
Management’s Discussion and Analysis of Financial Condition and Results of Operations” of our Form 10-K for the fiscal year ended December 31, 2023, filed with the SEC on March 7, 2024, which is available free of charge on the SEC's website at www.sec.gov and at www.RushStreetInteractive.com. Operating activities.
Management’s Discussion and Analysis of Financial Condition and Results of Operations” of our Form 10-K for the fiscal year ended December 31, 2024, filed with the SEC on February 28, 2025, which is available free of charge on the SEC's website at www.sec.gov and at www.RushStreetInteractive.com. Operating activities.
Management’s Discussion and Analysis of Financial Condition and Results of Operations” of our Form 10-K for the fiscal year ended December 31, 2023, filed with the SEC on March 7, 2024, which is available free of charge on the SEC's website at www.sec.gov and at www.RushStreetInteractive.com.
Management’s Discussion and Analysis of Financial Condition and Results of Operations” of our Form 10-K for the fiscal year ended December 31, 2024, filed with the SEC on February 28, 2025, which is available free of charge on the SEC's website at www.sec.gov and at www.RushStreetInteractive.com.
The net effect of exchange rate changes on cash, cash equivalents and restricted cash, when expressed in U.S. Dollar terms, was a decrease of $8.7 million for the year ended December 31, 2024 as compared to an increase of $5.1 million in 2023.
Effect of exchange rate changes on cash, cash equivalents and restricted cash. The net effect of exchange rate changes on cash, cash equivalents and restricted cash, when expressed in U.S. Dollar terms, was an increase of $17.1 million for the year ended December 31, 2025 as compared to a decrease of $8.7 million for the same period in 2024.
Our strategy is to enter new jurisdictions that we believe are financially prudent for us to enter. Online casino is currently authorized only in eight U.S. states: Connecticut, Delaware, Michigan, New Jersey, Pennsylvania, West Virginia, Rhode Island and Nevada (although regulators have not authorized online casino outside of physical casinos in Nevada).
Our strategy is to enter new jurisdictions that we believe are financially prudent for us to enter. Online casino is currently authorized only in nine U.S. states: Connecticut, Delaware, Maine (although the market is not yet operating), Michigan, New Jersey, Pennsylvania, West Virginia, Rhode Island and Nevada (although regulators have not authorized online casino outside of physical casinos in Nevada).
Letters of Credit As of December 31, 2024 and 2023, we had no outstanding debt. As of December 31, 2024 and 2023, we had an outstanding letter of credit for $4.3 million and $3.1 million, respectively, in connection with our operations in Colombia for which no amounts had been drawn.
Debt and Letters of Credit As of December 31, 2025 and 2024, we had no outstanding debt. As of December 31, 2025 and 2024, we had an outstanding letter of credit for $6.2 million and $4.3 million, respectively, in connection with our operations in Colombia for which no amounts had been drawn.
We also experienced an uplift in MAUs in 2024 driven by the Copa América soccer tournament in mid-2024 and our launch in Peru during the third quarter of 2024. Additionally, the full year of operations in Mexico in 2023 significantly contributed to the year-over-year increase in MAUs for 2023 compared to 2022.
In 2024, we also experienced an uplift in MAUs driven by 65 the Copa América soccer tournament in mid-2024 and our launch in Peru during the third quarter of 2024. Additionally, the full year of operations in Peru in 2025 contributed to the year-over-year increase in MAUs for 2025 compared to 2024.
With respect to paid marketing, we use a broad array of advertising channels, including television, radio, social media platforms, sponsorships, affiliates and paid search, and other digital channels. We also use other forms of marketing and outreach, such as our social media channels, first-party websites, media interviews and other media spots and organic searches.
With respect to paid marketing, we use a broad array of advertising channels, including television, radio, out-of-home (i.e., billboards, stadium signage), social media platforms, sponsorships, affiliates and paid search, and other digital channels. We also use other forms of marketing and outreach, such as our social media channels, first-party websites, media interviews and other media spots and organic searches.
With respect to paid marketing, we use a broad array of advertising channels, including television, radio, social media platforms, sponsorships, affiliates and paid search, and other digital channels. We also use other forms of marketing and outreach, such as our social media channels, first-party websites, media interviews and other media spots and organic searches.
With respect to paid marketing, we use a broad array of advertising channels, including television, radio, out-of-home (i.e., billboards, stadium signage), social media platforms, sponsorships, affiliates and paid search, and other digital channels. We also use other forms of marketing and outreach, such as our social media channels, first-party websites, media interviews and other media spots and organic searches.
We had been issued $6.1 million and $4.6 million in surety bonds as of December 31, 2024 and 2023, respectively, to satisfy regulatory requirements necessary to operate in certain jurisdictions. There have been no claims against any of our surety bonds and the likelihood of future claims is remote.
In addition, we had also been issued $6.4 million and $6.1 million in surety bonds as of December 31, 2025 and 2024, respectively, to satisfy regulatory requirements necessary to operate in certain jurisdictions. 75 There have been no claims against any of our surety bonds and the likelihood of future claims is expected to be remote.
Additionally, the full year of operations in Delaware in 2024 significantly contributed to the year-over-year increase in MAUs for 2024 compared to 2023. 65 The chart below presents our average MAUs in Latin America (including Mexico) for the years ended December 31, 2024, 2023 and 2022: The year-over-year increase in MAUs in Latin America for 2024 compared to 2023, as well as for 2023 compared to 2022, was mainly due to our continued growth, strong customer retention rates, and our continued achievement of positive response from our strategic advertising and marketing efforts.
The chart below presents our average MAUs in Latin America (including Mexico) for the years ended December 31, 2025, 2024 and 2023: The year-over-year increase in MAUs in Latin America for 2025 compared to 2024, as well as for 2024 compared to 2023, was mainly due to our continued growth, strong customer retention rates, and our continued achievement of positive response from our strategic advertising and marketing efforts.
General and administrative expenses consist primarily of administrative personnel costs, including salaries, bonuses and benefits, share-based compensation expense for dedicated personnel, professional fees related to legal, compliance, audit and consulting services, rent, insurance costs, technology and foreign exchange gains or losses. Depreciation and Amortization.
General and administrative costs consist primarily of administrative personnel costs (including salaries, bonuses, benefits and share-based compensation), professional fees related to legal, compliance, accounting and consulting, indirect technology costs, rent expense, insurance costs and foreign exchange gains or losses. Depreciation and Amortization.
Interest income, net, increased by $4.7 million, or 171%, to $7.5 million in 2024 as compared to $2.8 million in 2023. The increase in interest income was mainly attributed to higher amounts of cash held in interest-bearing accounts and money market funds as compared to the same period in 2023. Income tax expense .
Interest income, net, increased by $1.8 million, or 24%, to $9.3 million in 2025 as compared to $7.5 million in 2024. The increase in interest income was mainly attributed to higher amounts of cash held in interest-bearing accounts and money market funds as compared to the same period in 2024. Income tax (benefit) expense .
Revenue share and market access fees consist primarily of variable amounts paid to local partners that hold the applicable gaming license, providing us the ability to offer our real-money online offerings in the respective jurisdictions.
These costs are primarily variable in nature and should, in large part, correlate with the change in revenue. Revenue share and market access fees consist primarily of variable amounts paid to local partners that hold the applicable gaming license, providing us the ability to offer our real-money online offerings in the respective jurisdictions.
Income tax expense as a percentage of revenue increased to 3% in 2024 and as compared to 2% in 2023. 73 Comparison of the Years Ended December 31, 2023 and 2022 A discussion of changes in our results of operations in 2023 compared to 2022 has been omitted from this Form 10-K, but it may be found in “Item 7.
Comparison of the Years Ended December 31, 2024 and 2023 A discussion of changes in our results of operations in 2024 compared to 2023 has been omitted from this Form 10-K, but it may be found in “Item 7.
We define Adjusted EBITDA as net income (loss) before interest expense, income taxes, depreciation and amortization, share-based compensation, adjustments for certain one-time or non-recurring items and other adjustments.
We define Adjusted EBITDA as net income (loss) before interest, income taxes, depreciation and amortization, share-based compensation, adjustments for certain one-time or non-recurring items and other adjustments that are detailed in the reconciliation table below.
We are starting to see some other online gaming operators rationalize their marketing spend in North American jurisdictions, although their marketing spend may vary by quarter depending on, among other things, sports calendars, new market launches and prior commitments.
We are starting to see some other online gaming operators rationalize their marketing spend in North American jurisdictions, although their marketing spend may vary by quarter depending on, among other things, sports calendars, new market launches and prior commitments. Liquidity and Capital Resources Our principal sources of liquidity are cash on hand and cash flows from operations.
Cash Flows The following table shows our cash flows from operating activities, investing activities and financing activities for the stated periods: Years Ended December 31, ($ in thousands) 2024 2023 2022 Net cash provided by (used in) operating activities $ 106,449 $ (5,932) $ (60,321) Net cash used in investing activities (33,363) (33,780) (28,990) Net cash used in financing activities (2,652) (518) (1,216) Effect of exchange rate changes on cash, cash equivalents and restricted cash (8,655) 5,126 (3,721) Net change in cash, cash equivalents and restricted cash $ 61,779 $ (35,104) $ (94,248) A discussion of changes in cash flows in 2024 compared to 2023 is included below.
Cash Flows The following table shows our cash flows from operating activities, investing activities and financing activities for the stated periods: Years Ended December 31, ($ in thousands) 2025 2024 2023 Net cash provided by (used in) operating activities $ 165,004 $ 106,449 $ (5,932) Net cash used in investing activities (37,016) (33,363) (33,780) Net cash used in financing activities (37,364) (2,652) (518) Effect of exchange rate changes on cash, cash equivalents and restricted cash 17,124 (8,655) 5,126 Net change in cash, cash equivalents and restricted cash $ 107,748 $ 61,779 $ (35,104) A discussion of changes in cash flows in 2025 compared to 2024 is included below.
We incur payment processing costs on customer deposits and occasionally chargebacks (i.e., when a payment processor contractually disallows customer deposits in the normal course of business). Advertising and Promotions Costs. Advertising and promotion costs consist primarily of costs associated with marketing our offerings via different channels, promotional activities and related customer acquisition costs.
We incur payment processing costs on player deposits, withdrawals and occasionally chargebacks (i.e., when a payment processor contractually disallows customer deposits in the normal course of business). Sales and Marketing. Sales and marketing costs consist primarily of costs associated with marketing our products and services via different channels, promotional activities and the related costs incurred to acquire new customers.
Market access costs, gaming taxes, operating expenses, and payment processing costs contributed $58.5 million, $44.8 million, $20.9 million and $10.5 million, respectively, to the year-over-year increase in costs of revenue, with personnel costs contributing to the remaining $2.3 million of the year-over-year increase.
Gaming taxes, market access costs, payment processing costs, and operating expenses contributed $56.4 million, $46.3 million, $23.5 million and $13.2 million, respectively, to the year-over-year increase in costs of revenue, with personnel costs contributing to the remaining $0.2 million of the year-over-year increase.
Virtual credits have no monetary value and can only be used within our social gaming platform. 71 Our social gaming business has three main goals: build online databases in key markets ahead of and post-legalization and regulation; generate revenues; and increase engagement and visitation to our bricks-and-mortar partner properties.
Our social gaming business has three main goals: build online databases in key markets ahead of and post-legalization and regulation; generate revenues; and increase engagement and visitation to our bricks-and-mortar partner properties.
We expect our existing cash and cash equivalent and cash flows from operations to be sufficient to fund our operating activities and capital expenditure requirements for at least the next 12 months and thereafter for the foreseeable future.
To date, no material tax distribution payments have been made, and no material payments thereunder are expected in the next 12 months. We expect our existing cash and cash equivalent and cash flows from operations to be sufficient to fund our operating activities and capital expenditure requirements for at least the next 12 months and thereafter for the foreseeable future.
Costs of revenue consist primarily of (i) revenue share and market access fees, (ii) third-party platform and content fees, (iii) gaming taxes, (iv) payment processing fees and chargebacks and (v) salaries, bonuses, benefits and share-based compensation for dedicated personnel. These costs are primarily variable in nature and should typically correlate with the change in revenue.
Costs of revenue consist primarily of (i) revenue share and market access fees, which is reduced by any consideration from the vendor, (ii) third-party platform and content fees, (iii) gaming taxes, (iv) payment processing fees and chargebacks and (v) salaries, bonuses, benefits and share-based compensation for dedicated personnel.
The increase was mainly due to additional costs to acquire internally developed software and other definite-lived intangible assets. Depreciation and amortization expense as a percentage of revenue decreased to 3% in 2024 as compared to 4% in 2023. Interest Income, Net.
Depreciation and amortization expense increased by $7.8 million, or 24%, to $40.0 million in 2025 as compared to $32.2 million in 2024. The increase was mainly due to additional costs to acquire internally developed software and other definite-lived intangible assets. Depreciation and amortization expense as a percentage of revenue increased to 4% in 2025 as compared to 3% in 2024.
The table below presents our Adjusted EBITDA reconciled from our Net income (loss), the most directly comparable GAAP measure, for the periods indicated: Years Ended December 31, ($ in thousands) 2024 2023 2022 Net income (loss) $ 7,236 $ (60,055) $ (134,332) Interest (income) expense, net (7,493) (2,765) 573 Income tax expense 24,566 11,209 8,961 Depreciation and amortization 32,203 29,759 14,325 Share-based compensation 35,288 30,020 18,691 Change in TRA liability 739 — — Adjusted EBITDA $ 92,539 $ 8,168 $ (91,782) Key Factors Affecting Our Results Our financial position and results of operations depend, to a significant extent on the following factors: Industry Opportunity and Competitive Landscape We operate within the global gaming and entertainment industry, which is comprised of diverse products and offerings that compete for consumers’ time and disposable income.
Management also believes that Adjusted EBITDA is useful in evaluating our operating performance compared to that of other companies in our industry, as this metric generally eliminates the effects of certain items that may vary from company to company for reasons unrelated to overall operating performance. 67 The table below presents our Adjusted EBITDA reconciled from our Net income (loss), the most directly comparable GAAP measure, for the periods indicated: Years Ended December 31, ($ in thousands) 2025 2024 2023 Net income (loss) $ 74,029 $ 7,236 $ (60,055) Interest income, net (9,273) (7,493) (2,765) Income tax (benefit) expense (85,108) 24,566 11,209 Depreciation and amortization 39,970 32,203 29,759 Share-based compensation 26,261 35,288 30,020 Change in tax receivable agreement liability 107,776 739 — Adjusted EBITDA $ 153,655 $ 92,539 $ 8,168 Key Factors Affecting Our Results Our financial position and results of operations depend, to a significant extent, on the following factors: Industry Opportunity and Competitive Landscape We operate within the global gaming and entertainment industry, which is comprised of diverse products and offerings that compete for consumers’ time and disposable income.
Our revenue is predominantly generated from our U.S. and Canada operations, with the remaining revenue being generated from our Latin America (including Mexico) operations. See Note 3 to our consolidated financial statements, included elsewhere in this Annual Report.
We also provide social gaming, where users can earn or purchase (where permitted) virtual credits to enjoy free-to-play games. Our revenue is predominantly generated from our U.S. and Canada operations, with the remaining revenue being generated from our Latin America (including Mexico) operations. See Note 3 to our consolidated financial statements, included elsewhere in this Annual Report.
In particular, we are party to several non-cancelable contracts with vendors and licensors for marketing and other strategic partnerships, pursuant to which we are obligated to make future minimum payments under the non-cancelable terms of these contracts.
In particular, we are party to several non-cancelable contracts with vendors and licensors for marketing and other strategic partnerships, pursuant to which we are obligated to make future minimum payments under the non-cancelable terms of these contracts. Additionally, our continued profitability will trigger future quarterly tax distribution obligations payable to the limited partners of RSILP under the A&R Partnership Agreement.
Mix of Revenue From Our Different Operating Models Because we operate using two different operating models, each with its own unique range of profitability, the relative proportion of revenue that is derived from each operating model in a given time period could impact our overall level of profitability.
Mix of Revenue From Our Different Operating Models Because we operate using two different operating models, each with its own unique range of profitability, the relative proportion of revenue that is derived from each operating model in a given time period could impact our overall level of profitability. 69 Player Liquidity and Volume for Online Poker The success, and ultimately the profitability, of online poker offering is generally dependent on high levels of player liquidity and volume of game play or tournament participation.
Revenue increased by $232.9 million, or 34%, to $924.1 million in 2024 as compared to $691.2 million in 2023. The increase was mainly due to and directly correlated with our continued growth across existing markets and expansion into new markets that launched during 2023 and 2024.
Revenue increased by $210.3 million, or 23%, to $1,134.4 million in 2025 as compared to $924.1 million in 2024. The increase was mainly due to and directly correlated with our continued growth across existing markets and expansion into new markets such as Peru, which launched in late July 2024.
See Note 1 to our consolidated financial statements, included elsewhere in this Annual Report. We expect our material cash requirements during the upcoming 12-month period to include $5.8 million of non-cancellable purchase obligations with marketing vendors, $3.6 million of license and market access fees and $2.4 million of lease payments.
We expect our material cash requirements during the upcoming 12-month period to include $18.3 million of non-cancellable purchase obligations with marketing vendors, $4.1 million of minimum license and market access fees, and $2.8 million of lease payments. We also have $55.6 million of additional non-cancellable purchase obligations that will be due subsequent to the upcoming 12-month period.
Our current working capital needs relate mainly to supporting our existing businesses, the growth of these businesses in their existing markets and their expansion into other geographic regions, as well as our employees’ compensation and benefits.
We intend to continue to finance our operations without third-party debt and entirely from operating cash flows and cash on our balance sheet. Our current working capital needs relate mainly to supporting our existing businesses, the growth of these businesses in their existing markets and their expansion into other geographic regions, as well as our personnel’s compensation and benefits.
We include Adjusted EBITDA because management uses it to evaluate our core operating performance and trends and to make strategic decisions regarding the distribution of capital and new investments.
Adjusted EBITDA excludes certain expenses that are required in accordance with GAAP because certain expenses are either non-cash or are not related to our underlying business performance. We include Adjusted EBITDA because management uses it to evaluate our core operating performance and trends and to make strategic decisions regarding the distribution of capital and new investments.
The chart below presents our ARPMAU in Latin America (including Mexico) for the years ended December 31, 2024, 2023 and 2022: We generally maintained ARPMAU in Latin America at a roughly consistent level for 2024 compared to 2023, while significantly increasing MAUs in the same period.
The chart below presents our ARPMAU in the United States and Canada for the years ended December 31, 2025, 2024 and 2023: ARPMAU remained generally flat in the United States and Canada for 2025 compared to 2024 while significantly increasing MAUs in the same period.
Users who exhaust their credits can either purchase additional virtual credits from the virtual cashier or wait until their virtual credits are replenished for free.
Users who exhaust their credits can either purchase additional virtual credits from the virtual cashier, if permitted, or wait until their virtual credits are replenished for free. Virtual credits have no monetary value and can only be used within our social gaming platform.
This was partly offset by the positive impact of our continued strategic advertising and marketing efforts and our focus on retaining quality players. Non-GAAP Information This MD&A includes Adjusted EBITDA, which is a non-GAAP performance measure that we use to supplement our results presented in accordance with GAAP.
Non-GAAP Information This MD&A includes Adjusted EBITDA, which is a non-GAAP performance measure that we use to supplement our results presented in accordance with GAAP.
The increase reflects higher period-over-period online casino and sports betting revenue of $243.0 million and social gaming revenue of $0.4 million, which was partially offset by a decrease of retail sports betting revenue of $10.5 million due to our exit from the Connecticut market in 2023. Costs of Revenue.
The increase reflects higher period-over-period online casino and sports betting revenue of $210.4 million and social gaming revenue of $0.3 million, which was partially offset by a decrease of retail sports betting revenue of $0.4 million. Costs of Revenue. Costs of revenue increased by $139.6 million, or 23%, to $741.6 million in 2025 as compared to $602.0 million in 2024.
The Company experienced a significant increase in sports betting-only 67 customers, during the Copa América soccer tournament, who generally generate less revenue per customer than customers who use online casino. The year-over-year decrease in ARPMAU in Latin America for 2023 compared to 2022 was mainly due to negative impact of foreign exchange rate changes.
We generally maintained ARPMAU in Latin America at a roughly consistent level for 2024 compared to 2023, while significantly increasing MAUs in the same period. The Company experienced a significant increase in sports betting-only customers, during the 2024 Copa América soccer tournament, who generally generate less revenue per customer than customers who use online casino.
The increase in non-cash expenses was driven primarily by additional share-based compensation expense totaling $5.3 million, depreciation and amortization expense of $2.4 million, non-cash lease expense of $0.2 million and deferred income taxes of $0.1 million, which was partially offset by fewer write-offs of long-lived assets of $0.7 million. Investing activities .
The decrease in non-cash expenses was driven primarily by the deferred income tax benefit of $112.1 million and a decrease in share-based compensation expense totaling $9.0 million, which was partially offset by change in tax receivable agreement liability, additional depreciation and amortization expense and non-cash lease expense of $107.0 million, $7.8 million and $0.1 million, respectively. Investing activities .
Our third-party platform and content fees are primarily driven by costs associated with third-party casino content, sports betting trading services and certain elements of our platform technology, such as geolocation and know-your-customer. Gaming taxes primarily relate to state taxes and are determined on a jurisdiction-by-jurisdiction basis.
Our third-party platform and content fees are primarily driven by costs associated with third-party casino content, data and streaming, sports betting trading services, geolocation, know-your-customer and platform hosting. Gaming taxes include jurisdictional taxes that are determined based on a percentage of revenue (or similar metrics) or excise taxes that are determined based on a percentage of bets placed.
Net cash used in investing activities during 2024 decreased by $0.4 million to $33.4 million, as compared to $33.8 million during 2023. The decrease reflects lower period-over-period cash paid for gaming licenses of $3.2 million, short-term investments of $1.2 million, investment in equity securities of $0.5 million, and property and equipment purchases of $0.4 million.
This was partially offset by lower period-over-period short-term investments, acquisition of gaming licenses and purchases of property and equipment of $0.8 million, $0.3 million and $0.2 million, respectively. Financing activities. Net cash used in financing activities during 2025 increased by $34.7 million to $37.4 million, as compared to $2.7 million during 2024.
This was partially offset by higher cash paid for internally developed software totaling $1.9 million, other intangible assets of $1.3 million and the proceeds from the maturity of long-term deposits of $1.7 million in 2023. 76 Financing activities. Net cash used in financing activities during 2024 increased by $2.1 million to $2.6 million, as compared to $0.5 million during 2023.
Net cash used in investing activities during 2025 increased by $3.6 million to $37.0 million, as compared to $33.4 million during 2024. The increase reflects higher cash paid for internally developed software totaling $4.2 million and additional acquisitions of other intangible assets and developed technology totaling $0.5 million and $0.2 million, respectively.
Average Revenue Per Monthly Active User ARPMAU for an applicable period is monthly revenue divided by average MAUs.
Average Revenue Per Monthly Active User ARPMAU for an applicable period is monthly revenue divided by average MAUs. This key metric represents our ability to drive usage and monetization of our online offerings.
Costs of revenue increased by $137.0 million, or 29%, to $602.0 million in 2024 as compared to $465.0 million in 2023. The increase was mainly due to and directly correlated with, our expansion and continued growth as noted above.
The increase was mainly due to and directly correlated with, our expansion and continued growth as noted above.
The increased provision of cash reflects a higher period-over-period net income totaling $67.3 million, increased non-cash expenses of $7.3 million, and an increase of $37.8 million due to the change in operating assets and liabilities.
The increase was primarily due to higher period-over-period net income totaling $66.8 million, which was partially offset by a decrease in non-cash expenses of $6.2 million and changes in operating assets and liabilities of $2.0 million.
General and administrative expense as a percentage of revenue decreased to 12% in 2024 as compared to 13% in 2023. Depreciation and Amortization. Depreciation and amortization expense increased by $2.4 million, or 8%, to $32.2 million in 2024 as compared to $29.8 million in 2023.
Sales and marketing expense as a percentage of revenue decreased to 15% in 2025 as compared to 17% in 2024. General and Administrative. General and administrative expense decreased by $5.5 million, or 5%, to $100.7 million in 2025 as compared to $106.2 million in 2024.
Although the actual timing and amount of any payments made under the TRA will vary, such payments may be significant.
These obligations under the TRA, while mainly non-current in nature, reduce future operating cash flows as the associated tax benefits are realized. Although the actual timing and amount of any payments made under the TRA will vary, such payments may be significant.
General and administrative expense increased by $19.6 million, or 22%, to $106.9 million in 2024 as compared to $87.3 million in 2023. The year-over-year increase was due to higher personnel and other administrative costs, which is consistent with the ongoing growth of our business.
The year-over-year decrease was primarily due to lower share-based compensation expense, which was partially offset by higher personnel and other administrative costs, consistent with the growth of our business. General and administrative expense as a percentage of revenue decreased to 9% in 2025 as compared to 11% in 2024. Depreciation and Amortization.
Costs of revenue as a percentage of revenue decreased to 65% in 2024 as compared to 67% in 2023. Advertising and Promotions. Advertising and promotions expense decreased by $2.1 million, or 1%, to $158.6 million in 2024 as compared to $160.7 million in 2023.
Costs of revenue as a percentage of revenue remained flat at 65% for the years ended December 31, 2025 and 2024. Sales and Marketing. Sales and marketing expense increased by $6.1 million, or 4%, to $164.7 million in 2025 as compared to $158.6 million in 2024.
The increase reflects both higher payments of employee taxes related to shares withheld and finance liabilities totaling $1.2 million and $1.0 million, respectively, which was slightly offset by proceeds from exercise of stock options of $0.1 million in 2024. Effect of exchange rate changes on cash, cash equivalents and restricted cash.
The increase reflects higher payments of employee taxes related to net share 76 settlement of equity awards, repurchases of Class A Common Stock, payments of finance liabilities and payments for tax distributions to non-controlling interests totaling $25.3 million, $7.6 million, $1.2 million, $0.7 million, respectively, which was slightly offset by lower proceeds from exercise of stock options of $0.1 million.
These investments and personalized promotions are intended to increase consumer awareness and drive engagement.
These investments and personalized promotions are intended to increase consumer awareness and drive engagement. Managing Wagering Risk The online casino and retail and online sports betting businesses are characterized by an element of chance.
Net cash provided by operating activities was $106.4 million for the year ended December 31, 2024 as compared to $5.9 million used in operating activities for the year ended December 31, 2023.
Net cash provided by operating activities during 2025 increased by $58.6 million to $165.0 million, as compared to $106.4 million during the same period in 2024.
Management believes our current cash holdings and, if necessary or desirable, various avenues available to pursue funding in the capital markets will suffice to fund these obligations. 75 Surety Bonds We had been issued $31.1 million and $28.0 million in surety bonds as of December 31, 2024 and 2023, respectively, that are used to satisfy regulatory requirements related to securing cash held for the behalf of customers.
See Note 1 to our consolidated financial statements, included elsewhere in this Annual Report. Surety Bonds We had been issued $31.3 million and $31.1 million in surety bonds as of December 31, 2025 and 2024, respectively, that are used to satisfy regulatory requirements related to securing cash held on behalf of customers.
Key Components of Revenue and Expenses We currently offer real-money online casino, online sports betting and/or retail sports betting in 16 U.S. states, Colombia, Ontario, Canada, Mexico and Peru. We also provide social gaming (where permitted), where users can earn or purchase virtual credits to enjoy free-to-play games.
In most cases, our profitability levels from our online poker offering will increase as more players participate and the aggregate amount of wagers increases. Key Components of Revenue and Expenses We currently offer real-money online casino, online sports betting and/or retail sports betting in 16 U.S. states, Colombia, Ontario, Canada, Mexico and Peru.
Based on our cumulative earnings history and forecasted future sources of taxable income, we have determined we are not more-likely-than-not to realize existing deferred tax assets and thus have recorded a valuation allowance.
Based on historical pre-tax earnings 77 trends and assumptions about future performance, we expect to generate taxable income in future periods. Accordingly, we have determined that it is more-likely-than-not that certain deferred tax assets are realizable.
In addition, we will continue to pursue expansion into new markets, which is expected to require significant capital investments. We have $39.1 million of additional non-cancellable purchase obligations including obligations for license and market access fees, arrangements with marketing vendors and lease payments subsequent to the upcoming 12-month period.
In addition, we will continue to pursue expansion into new markets, which is expected to require significant capital investments. We are required to make payments equal to 85% of the tax benefits we realize in connection with the TRA.
Removed
Adjusted EBITDA excludes certain expenses that are required in accordance with GAAP because certain expenses are either non-cash (i.e., depreciation and amortization, and share-based compensation) or are not related to our underlying business performance (i.e., interest income or expense and change in TRA liability).
Added
Additionally, the full year of operations in Delaware in 2024 significantly contributed to the year-over-year increase in MAUs for 2024 compared to 2023.
Removed
Management also believes that Adjusted EBITDA is useful in evaluating our operating performance compared to that of other companies in our industry, as this metric generally eliminates the effects of certain items that may vary from company to company for reasons unrelated to overall operating performance.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeOur foreign currency exposure is primarily with respect to the Colombian Peso, the Canadian Dollar and the Mexican Peso. Markets with a functional currency other than the U.S. Dollar accounted for less than 20% and 15% of our revenue for the fiscal years ended December 31, 2024 and 2023, respectively.
Biggest changeOur foreign currency exposure is primarily with respect to the Colombian Peso, the Canadian Dollar, Mexican Peso and the Peruvian Soles. Markets with a functional currency other than the U.S. Dollar accounted for less than 20% of our revenue for each of the fiscal years ended December 31, 2025 and 2024.
Inflation Risk We do not believe that inflation has had a material effect on our business, financial condition or results of operations as of and for the fiscal year ended December 31, 2024. However, if our costs become subject to significant inflationary pressures, we may not be able to fully offset such higher costs through price increases.
Inflation Risk We do not believe that inflation has had a material effect on our business, financial condition or results of operations as of and for the fiscal year ended December 31, 2025. However, if our costs become subject to significant inflationary pressures, we may not be able to fully offset such higher costs through price increases.
A 10% increase or decrease in the value of these currencies compared to the U.S. Dollar would not have a material effect on our consolidated financial statements for the year ended December 31, 2024.
A 10% increase or decrease in the value of these currencies compared to the U.S. Dollar would not have a material effect on our consolidated financial statements for the year ended December 31, 2025.
A 10% increase or decrease in the interest rates of these interest-earning instruments would not have a material effect on our consolidated financial statements for the year ended December 31, 2024. Foreign Currency Exchange Rate Risk We have been exposed to foreign currency exchange risk related to our transactions in currencies other than the U.S.
A 10% increase or decrease in the interest rates of these interest-earning instruments would not have a material effect on our consolidated financial statements for the year ended December 31, 2025. 78 Foreign Currency Exchange Rate Risk We have been exposed to foreign currency exchange risk related to our transactions in currencies other than the U.S.
Currently, these risks are not material to our financial condition or results of operations, but they may be in the future. Interest Rate Risk As of December 31, 2024, we had cash, cash equivalents and restricted cash of $232.8 million, which consisted primarily of bank deposits, certificates of deposits and money market funds.
Currently, these risks are not material to our financial condition or results of operations, but they may be in the future. Interest Rate Risk As of December 31, 2025, we had cash, cash equivalents and restricted cash of $340.5 million, which consisted primarily of bank deposits, certificates of deposits and money market funds.

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