10q10k10q10k.net

What changed in Rush Street Interactive, Inc.'s 10-K — 2023 vs 2024

vs

Paragraph-level year-over-year comparison of Rush Street Interactive, Inc.'s 2023 and 2024 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 2024 report.

+453 added−421 removedSource: 10-K (2025-02-28) vs 10-K (2024-03-07)

Top changes in Rush Street Interactive, Inc.'s 2024 10-K

453 paragraphs added · 421 removed · 349 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

102 edited+18 added−15 removed130 unchanged
Biggest changeRegulations in jurisdictions in which we operate, such as the Virginia Consumer Data Protection Act, the Colorado Privacy Act, the Delaware Personal Data Privacy Act, the Freedom of Information and Protection of Privacy Act (Ontario), the Mexican Federal Law on the Protection of Personal Data held by Private Parties and Colombian Statutory Laws 1266 of 2008 and 1581 of 2012, as amended, and regulations in other jurisdictions where we do not operate but that could otherwise impact our operations, such as the California Consumer Privacy Act (the “CCPA”) (as amended by the California Privacy Rights Act together with the CCPA Regulations), may be new or are relatively untested laws (some of which may not yet be effective) that could affect our business, and the potential impact is unknown.
Biggest changeRegulations in jurisdictions in which we operate, such as the Virginia Consumer Data Protection Act, the Colorado Privacy Act, the Delaware Personal Data Privacy Act, the Maryland Online Data Privacy Act, the Iowa Consumer Data Protection Act, the Biometric Information Privacy Act, the Personal Information Protection Act and the Right to Privacy in the Workplace Act of Illinois, the Indiana Consumer Data Protection Act and Fair Information Practices Act, the Louisiana Consumer Privacy Act, the New Jersey Data Privacy Act, the Maryland Online Data Privacy Act, the Michigan Personal Data Privacy Act (not in effect yet), the New York State Personal Privacy Protection Law and the New York Privacy Act, the Ohio Personal Privacy Act, the Pennsylvania Consumer Data Privacy Act, the Canadian Personal Information and Electronic Documents Act, the Freedom of Information and Protection of Privacy Act (Ontario), Law No. 29733 on the Protection of Personal Data ( Ley No. 29733 de Protección de Datos Personales ), its Regulation approved by Supreme Decree No. 003-2013-JUS ( Decreto Supremo No. 003-2013-JUS ) (Peru), the Mexican Federal Law on the Protection of Personal Data held by Private Parties and Colombian Statutory Laws 1266 of 2008 and 1581 of 2012, as amended, and regulations in other jurisdictions where we do not have real-money gaming operations but that could otherwise impact our operations or personnel, such as the California Consumer Privacy Act (the “CCPA”) (as amended by the California Privacy Rights Act together with the CCPA Regulations), may be new or are relatively untested laws (some of which may not yet be effective) that could affect our business, and the potential impact is unknown.
On December 29, 2020, dMY completed the transactions contemplated by the business combination agreement dated as of July 27, 2020, as amended and amended and restated (the “Business Combination Agreement” and the transactions contemplated thereby, the “Business Combination”), and in connection therewith: (i) dMY acquired Rush Street Interactive, LP (“RSILP”) in an umbrella partnership–C corporation (“Up-C”) structure, in which substantially all of the Company’s assets are held by RSILP, and the Company’s only material assets are its equity interests in RSILP; (ii) the holders of equity interests of RSILP (the “Sellers”) retained certain of their Class A common units of RSILP (the “RSILP Units”) and received an equal number of the Company’s Class V common stock, par value $0.0001 per share (the “Class V Voting Stock”); (iii) the Company issued and sold to subscribers in a private placement an aggregate of 16,043,002 shares of Class A common stock, $0.0001 par value per share (“Class A Common Stock”); and (iv) dMY changed its name to “Rush Street Interactive, Inc.” The Sellers have the right to exchange the RSILP Units retained by them (the “Retained RSILP Units”) for either one share of Class A Common Stock or, upon certain conditions, the cash equivalent of the market value of one share of Class A Common Stock.
On December 29, 2020, dMY completed the transactions contemplated by the business combination agreement dated as of July 27, 2020, as amended and amended and restated (the “Business Combination Agreement” and the transactions contemplated thereby, the “Business Combination”), and in connection therewith: (i) dMY acquired Rush Street Interactive, LP (“RSILP”) in an umbrella partnership–C corporation (“Up-C”) structure, in which substantially all of the Company’s assets are held by RSILP, and the Company’s only material assets are its equity interests in RSILP; (ii) the holders of equity interests of RSILP (the “Sellers”) retained certain of their RSILP Class A common units (the “RSILP Units”) and received an equal number of the Company’s Class V common stock, par value $0.0001 per share (the “Class V Voting Stock”); (iii) the Company issued and sold to subscribers in a private placement an aggregate of 16,043,002 shares of Class A common stock, $0.0001 par value per share (“Class A Common Stock”); and (iv) dMY changed its name to “Rush Street Interactive, Inc.” The Sellers have the right to exchange the RSILP Units retained by them (the “Retained RSILP Units”) for either one share of Class A Common Stock or, upon certain conditions, the cash equivalent of the market value of one share of Class A Common Stock.
Our 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.
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.
Among other things, gaming authorities in the various jurisdictions in which we conduct our business: • adopt rules and regulations under the implementing statutes; • interpret and enforce gaming laws and regulations; • impose fines and penalties for violations; • review the character and fitness of participants in gaming operations and make determinations regarding their suitability or qualification for licensure; • grant licenses for participation in gaming operations; • collect and review reports and information submitted by participants in gaming operations; • review and approve certain transactions, which may include acquisitions or change-of-control transactions of gaming industry participants and securities offerings and debt transactions engaged in by such participants; and • establish and collect fees and taxes in jurisdictions where applicable.
Among other things, gaming authorities in the various jurisdictions in which we conduct our business: • adopt rules and regulations under the implementing statutes; • interpret and enforce gaming laws and regulations; • impose fines and penalties for violations; • review the character and fitness of participants in gaming operations and make determinations regarding their suitability or qualification for licensure; • grant licenses for participation in gaming operations; • collect and review reports and information submitted by participants in gaming operations; • review and approve certain transactions, which may include acquisitions or change-of-control transactions of gaming industry participants and securities offerings and debt transactions engaged in by such participants; and 18 • establish and collect fees and taxes in jurisdictions where applicable.
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 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 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, we may be subject to disciplinary action or our licenses may be in peril if, after we receive notice that a person is unsuitable 19 to be a stockholder or to have any other relationship with us or any of our subsidiaries, we: (i) pay that person any dividend or interest upon our voting securities; (ii) allow that person to exercise, directly or indirectly, any voting right conferred through securities held by that person; (iii) pay remuneration in any form to that person for services rendered or otherwise; or (iv) fail to pursue all lawful efforts to require such unsuitable person to relinquish his or her voting securities.
Furthermore, we may be subject to disciplinary action or our licenses may be in peril if, after we receive notice that a person is unsuitable to be a stockholder or to have any other relationship with us or any of our subsidiaries, we: (i) pay that person any dividend or interest upon our voting securities; (ii) allow that person to exercise, directly or indirectly, any voting right conferred through securities held by that person; (iii) pay remuneration in any form to that person for services rendered or otherwise; or (iv) fail to pursue all lawful efforts to require such unsuitable person to relinquish his or her voting securities.
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.
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.
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 and Mexico 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.
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.
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.
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.
This intellectual property consists of, for example, software code, proprietary technology, trademarks, domain names, copyrights, patents, customer lists and databases and trade secrets that we use to develop and provide our offerings and 16 related services, as well as online betting and gaming content (both proprietary and licensed) and proprietary data acquired from our customers’ use of our offerings and related services.
This intellectual property consists of, for example, software code, proprietary technology, trademarks, domain names, copyrights, patents, customer lists and databases and trade secrets that we use to develop and provide our offerings and related services, as well as online betting and gaming content (both proprietary and licensed) and proprietary data acquired from our customers’ use of our offerings and related services.
Further internet penetration in these Latin American countries would allow us to grow our revenues from online gaming there to the extent we make our offerings available in those countries. The highest populated country in Latin America, Brazil, recently approved a bill to legalize sports betting and online casino in December 2023.
Further internet penetration in these Latin American countries would allow us to grow our revenues from online gaming there to the extent we make our offerings available in those countries. The highest populated country in Latin America, Brazil, approved a bill to legalize sports betting and online casino in December 2023.
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 4 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.
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, social media platforms, sponsorships, affiliates and paid search, as well as 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 also collect, use, store, receive, transmit, share or disclose, and otherwise process certain 21 personal information of job applicants and personnel in Estonia or the European Union (the “EU”), thus we are also subject to the European Union’s General Data Protection Regulation (the “GDPR”) for such data.
We also collect, use, store, receive, transmit, share or disclose, and otherwise process certain personal information of job applicants and personnel in Estonia or the European Union (the “EU”), thus we are also subject to the European Union’s General Data Protection Regulation (the “GDPR”) for such data.
(“dMY”), incorporated as a corporation in Delaware 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”), 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.
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. Virtual credits have no monetary value and can only be used within our social gaming platform.
Users who exhaust their credits can either purchase additional virtual credits from the virtual cashier or wait until 9 their virtual credits are replenished for free. Virtual credits have no monetary value and can only be used within our social gaming platform.
We operate and/or support retail sports betting for our bricks-and-mortar partners primarily under their respective 3 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 also offer social gaming under our own brands as well.
Revenue share and market access fees consist primarily of 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.
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 laws, rules and regulations generally concern the responsibility, financial stability, integrity, honesty and character of the owners, managers and persons with material financial interests in the gaming operations along with the integrity and 17 security of the online casino and sports betting offerings.
These laws, rules and regulations generally concern the responsibility, financial stability, integrity, honesty and character of the owners, managers and persons with material financial interests in the gaming operations along with the integrity and security of the online casino and sports betting offerings.
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 digital user capabilities. Strategic Transactions .
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 .
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, 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, private equity or other investment funds, gaming content and data providers, gaming regulators, gaming technology companies, sports teams and leagues, and payment processors.
In addition, as we continue to grow and expand into new jurisdictions, we also expect to continue to leverage our scale to obtain preferred pricing from various vendors. 6 Average Lifetime Value for All U.S. and Ontario Cohorts Since Inception Source: RSI management estimates based on the average long-term value of all cohorts since inception presented in monthly increments, as measured from the month of first deposit.
In addition, as we continue to grow and expand into new jurisdictions, we also expect to continue to leverage our scale to obtain preferred pricing from various vendors. 6 Average Lifetime Value for All U.S. and Ontario Cohorts Since 2017 Source: RSI management estimates based on the average long-term value of all cohorts since 2017 presented in monthly increments, as measured from the month of first deposit.
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 $29 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 $33 billion in revenue. Latin America Gaming Industry Latin America (including Mexico) is another area of focus for us.
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 $58 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 $77 billion in revenue.
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 West Virginia ü ü International: Colombia ü ü Ontario (Canada) ü ü Mexico 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 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 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).
Our B2C operations contributed more than 98% of our total revenue for the years ended December 31, 2023 and 2022, and we expect that it will continue to be our primary operating model into the future.
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.
As such, we focus heavily on our people programs, starting with the recruiting process to ensure we are hiring the right people who have a desirable skill set while enhancing our corporate culture. Once hired, we strive to onboard them effectively so that they can quickly become integrated into the business and start contributing.
As such, we focus heavily on our people programs, starting with the talent acquisition process to ensure we are hiring the right people who have a desirable skill set while enhancing our corporate culture. Once hired, we strive to onboard them effectively so that they can quickly become integrated into the business and start contributing.
In 2023, 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.
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, 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 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.
We generally pay much lower fees on revenue generated through our proprietary casino games such as our multi-bet blackjack (with side bets: 21+3, Lucky Ladies, Lucky Lucky) and single-deck blackjack, which primarily relate to hosting/remote gaming server fees and certain intellectual property license fees.
We generally pay much lower fees on revenue generated through our proprietary online poker platform and proprietary casino games such as our multi-bet blackjack (with side bets: 21+3, Lucky Ladies, Lucky Lucky) and single-deck blackjack, which primarily relate to hosting/remote gaming server fees and certain intellectual property license fees.
Costs of revenue consist primarily of (i) revenue share and market access fees, (ii) platform and content fees, (iii) gaming taxes, (iv) payment processing fees and chargebacks and (v) salaries, bonuses, benefits and share- 9 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, (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.
Our omni-channel platform provides a vast amount of functionality such as location-based decisioning, unified conditional bonusing, gamified award scenarios such as bingo, squares and slot tournaments, customer dashboards (online and at retail), promotional games, real-time awards and promotion management, sophisticated reporting and responsible gaming features, improved betting interfaces such as prop central and same game parlay merchandising. among others.
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 Development Team Our development team is led by our Chief Information Officer, Einar Roosileht, 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 10 app design and development, security and technical support.
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.
Our experience has been that online casino revenue is less volatile than sports betting revenue. 8 Our online casino offering consists of a combination of licensed content from leading industry suppliers, customized third-party games and a small number of proprietary games that were developed exclusively for us.
Our experience has been that online casino revenue is less volatile than sports betting revenue. Our online casino offering consists of a combination of licensed content from leading industry suppliers, customized third-party games, our proprietary online poker platform and a small number of proprietary games that were developed exclusively for us.
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, sports betting, horse racing, e-sports and virtual sports, across land-based and online platforms.
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.
Occasionally, we and/or our vendors have received, and expect to receive in the future, third-party allegations or cease-and-desist letters, including from our competitors and non-practicing entities, that we have infringed such parties’ intellectual property rights, such as their trademarks, copyrights and patents. Such allegations may increase as our business grows.
Occasionally, we and/or our vendors have received, and expect to receive in the future, third-party allegations or cease-and-desist letters, including from our competitors and non-practicing entities, that we have infringed such parties’ intellectual property rights, such as their trademarks, copyrights and patents.
While the overall industry is still nascent, growth to date has been strong. Online sports betting revenue grew at a 115% CAGR from 2019 to 2023 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 95% CAGR from 2019 to 2024 according to EKG, driven mainly by an increasing number of states regulating and the immaturity of the market.
Based on the population of Ontario and the growth to date in that market, we expect that market to continue to grow in the future. The success to date in Ontario is also promising as it may cause other Canadian provinces to consider whether they should regulate online gaming and betting.
Based on the population of Ontario and the growth to date in that market, we expect that market to continue to grow in the future. The success to date in Ontario is also promising as it may cause other Canadian provinces to consider whether they should launch competitive regulated online gaming and betting.
We launched our first social gaming website in 2015 and began accepting real-money bets in the United States in 2016. Currently, we offer real-money online casino, online sports betting and/or retail sports betting in 15 U.S. states and the three international markets as outlined in the table below.
We launched our first social gaming website in 2015 and began accepting real-money bets in the United States in 2016. Currently, we offer real-money online casino, online sports betting and/or retail sports betting in 16 U.S. states and four international markets, as outlined in the table below.
In addition, we have currently secured potential market access to Missouri and if certain conditions are met, Texas, in each case subject to certain legislative and/or regulatory developments or approvals, which have an aggregate population of approximately 36 million people. We have a proven ability to quickly enter markets as they are regulated.
In addition, we have currently secured potential market access to Missouri and if certain conditions are met, Texas, in each case subject to certain legislative and/or regulatory developments or approvals, which have an aggregate population of approximately 37 million people. We have a proven ability to quickly enter markets as they are regulated. Flexible Business Model.
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.
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 .
Our Chief Executive Officer Richard Schwartz, Chief Information Officer Einar Roosileht, Chief Operating Officer Mattias Stetz and Chief Administrative Officer Rob Picard all had online 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 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.
Online Casino Currently, online casino is authorized in fewer states than sports betting. Online casino is authorized only in seven states: Connecticut, Delaware, Michigan, New Jersey, Pennsylvania, West Virginia 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 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).
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 103% compound annual growth rate (“CAGR”) from 2019 to 2023.
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.
EKG projects continued growth as more states regulate and markets mature, with forecasts for online sports betting revenue to exceed $21 billion by 2028. 14 U.S. Sports Betting Policy Landscape Source: EKG United States Sports Betting Policy Monitor – Released January 2024 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 $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.
Canadian Gaming Industry In April 2022, we were among the first group of operators to launch online gaming in Ontario, Canada, where we offer both online casino and online sports betting. Ontario has the highest population and gross domestic product of all the Canadian provinces.
Canadian Gaming Industry In April 2022, we were among the first group of operators to launch in Ontario, Canada’s competitive regulated online gaming market, where we offer both online casino and online sports betting. Ontario has the highest population and gross domestic product of all the Canadian provinces.
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 and insurance costs. Depreciation and Amortization.
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.
In addition, we train our frontline personnel to identify signs of problematic gaming, ensuring that we are not only utilizing data and technology but also our human resources. In May 2019, we joined the National Council on Problem Gambling (“NCPG”) as a Platinum Member.
In addition, we train our frontline personnel to identify signs of problematic gaming, ensuring that we are not only utilizing data and technology but also our human resources. We have been a member of the National Council on Problem Gambling (“NCPG”) since May 2019.
Online casino revenue is generated based on total customer bets less amounts paid to customers for winning bets, less incentives awarded to customers, plus or minus the change in the progressive jackpot reserve.
Online casino revenue (other than from online poker games) is generated based on total customer bets less amounts paid to customers for winning bets, less incentives awarded to customers, plus or minus the change in the progressive jackpot reserve.
Based on the results from Ontario to date, the Ontario market is off to a strong start, with online casino and online sports betting revenue growing by approximately 65% in the second half of 2023 as compared to the same period in 2022.
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.
From 2019 to 2023, online casino revenue grew at a 90% 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 $12 billion by 2028.
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.
We also believe that our brands, offerings and marketing strategies appeal to both female and male customers, as evidenced by an approximately 54-46 female/male split in our active North American online casino-only customers during calendar year 2023.
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.
We plan to continue to invest in our customers and our offerings 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 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 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 COVID-19 caused increased general consumer adoption of digital activity, including online gaming. 12 • Online casino generated more tax revenue compared to online sports betting in Connecticut, Michigan, New Jersey, Pennsylvania and West Virginia in 2023, meaning authorizing online sports betting alone may not optimize tax revenue. • Land-based casino revenue grew as online casino revenue grew in New Jersey from 2022 to 2023, demonstrating that land-based casino revenue can grow with online casino revenue. • We believe that the land-based casino industry, an important stakeholder in many states, generally has shown a wider acceptance of online casino.
We 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.
To attract, engage, retain and/or reactivate customers, we offer a loyalty program that rewards customers in exciting, fair and transparent ways. We recognize and reward customer loyalty by, among other things, ensuring that there are exciting benefits at every customer loyalty level we offer. Each of our online gaming customers is a member of our customer loyalty program.
To attract, engage, retain and/or reactivate customers, we offer a loyalty program that rewards customers in exciting, fair and transparent ways. We recognize and reward customer loyalty by, among other things, ensuring that there are exciting benefits at every level.
Market Access and Speed to Market. We currently operate online casino and/or online sports betting in 18 jurisdictions, including 15 states (Arizona, Colorado, Delaware, Illinois, Indiana, Iowa, Louisiana, Maryland, Michigan, New Jersey, New York, Ohio, Pennsylvania, Virginia and West Virginia) and three international markets (Colombia, 5 Ontario, Canada and Mexico) with an aggregate population of approximately 315 million people.
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 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 23% from $5.3 billion to $6.5 billion from 2022 to 2023.
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.
Supreme Court’s decision, as of the date hereof, 39 states and the District of Columbia have authorized sports betting. Of those 40 jurisdictions, 31 states have authorized statewide online sports betting while 9 remain authorized for retail-only at casinos or retail locations. According to EKG, the United States generated approximately $10.4 billion in online sports betting revenue in 2023.
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.
We also operate retail sportsbooks in Illinois, Indiana, Maryland, Michigan (see “ Native American Gaming Regulation ”), New York, Pennsylvania and Virginia pursuant to applicable state and tribal licensing regimes. On May 14, 2018, the U.S. Supreme Court issued an opinion determining that PASPA was unconstitutional. PASPA prohibited a state from “authorizing by law” any form of sports betting.
We also operate retail sportsbooks in Illinois, Indiana, Maryland, Michigan (see “ Native American Gaming Regulation ”), New York, Pennsylvania, Virginia and Washington (see “ Native American Gaming Regulation ”) pursuant to applicable state and tribal licensing regimes. On May 14, 2018, the U.S. Supreme Court issued an opinion determining that PASPA was unconstitutional.
With Ontario being home to approximately 14.2 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 and success in Ontario positions us well to expand further in other Canadian markets when deemed appropriate. Competition We operate in the global gaming and entertainment industry.
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.
Sports Betting North America In North America we currently operate our online sports betting offering under the PlaySugarHouse brand in Pennsylvania and the BetRivers brand in Arizona, Colorado, Delaware (co-branded with land-based operators), Illinois, Indiana, Iowa, Louisiana, Maryland, Michigan, New Jersey, New York, Ohio, Pennsylvania, Virginia and West Virginia, as well as Ontario, Canada pursuant to our licenses granted by the gaming commission of such jurisdictions, specifically, the Pennsylvania Gaming Control Board, the Arizona Department of Gaming, the Colorado Division of Gaming, the Delaware State Lottery Office, the Illinois Gaming Board, the Indiana Gaming Commission, the Iowa Racing and Gaming 20 Commission, the Louisiana Gaming Control Board, the Maryland State Lottery and Gaming Control Agency, the Michigan Gaming Control Board, the New Jersey Division of Gaming Enforcement, the New York State Gaming Commission, the Ohio Casino Control Commission, the Virginia Lottery Board, the West Virginia Lottery and the Alcohol and Gaming Commission of Ontario.
In Peru, we operate pursuant to authorizations to operate remote gaming and remote sports betting, each issued by the Ministry of Foreign Trade and Tourism (MINCETUR), the national administrative authority in charge of regulating, implementing and overseeing all aspects of online gaming and sports betting in Peru. 20 Sports Betting North America In North America we currently operate our online sports betting offering under the PlaySugarHouse brand in Pennsylvania and the BetRivers brand in Arizona, Colorado, Delaware (co-branded with land-based operators), Illinois, Indiana, Iowa, Louisiana, Maryland, Michigan, New Jersey, New York, Ohio, Pennsylvania, Virginia and West Virginia, as well as Ontario, Canada pursuant to our licenses granted by the gaming commission of such jurisdictions, specifically, the Pennsylvania Gaming Control Board, the Arizona Department of Gaming, the Colorado Division of Gaming, the Delaware State Lottery Office, the Illinois Gaming Board, the Indiana Gaming Commission, the Iowa Racing and Gaming Commission, the Louisiana Gaming Control Board, the Maryland State Lottery and Gaming Control Agency, the Michigan Gaming Control Board, the New Jersey Division of Gaming Enforcement, the New York State Gaming Commission, the Ohio Casino Control Commission, the Virginia Lottery Board, the West Virginia Lottery and the Alcohol and Gaming Commission of Ontario.
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 such in many markets such as Louisiana, Michigan, Maryland, New York, Ohio, Virginia and Ontario, Canada.
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.
As an official partner to the Chicago Bears, we leveraged our relationship to create a combined in-stadium message to raise awareness of our partnership with the AGA and show our support for the Have a Game Plan responsible gaming tools. 22 Available Information Our Internet address is www.RushStreetInteractive.com.
As an official partner to the New Orleans Pelicans, Detroit Pistons, Pittsburgh Penguins, and Philadelphia Flyers, we leveraged our relationship to create a combined in-stadium message to raise awareness of our partnership with the AGA and show our support for the Have a Game Plan responsible gaming tools. Available Information Our Internet address is www.RushStreetInteractive.com.
While we believe that we comply in all material respects with applicable sports betting and online casino laws, licenses and regulatory requirements, we cannot provide assurance that our activities or the activities of our customers, partners or suppliers will not become the subject of any regulatory or law enforcement investigation, proceeding or other governmental action or that any such proceeding or action, as the case may be, would not have a material adverse impact on us or our business, financial condition or results of operations. 18 Licensing and Suitability Determinations To operate in certain jurisdictions we must first obtain either a temporary or permanent license or determination of suitability from the responsible authorities.
While we believe that we comply in all material respects with applicable sports betting and online casino laws, licenses and regulatory requirements, we cannot provide assurance that our activities or the activities of our customers, partners or suppliers will not become the subject of any regulatory or law enforcement investigation, proceeding or other governmental action or that any such proceeding or action, as the case may be, would not have a material adverse impact on us or our business, financial condition or results of operations.
We have also developed and incorporated numerous proprietary bonusing features such as our slot tournaments and proprietary squares game, which appeal to casino and sports betting customers alike.
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.
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. 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.
Both Pennsylvania and New Jersey were experiencing online casino taxable revenue growth prior to COVID-19; however, that growth accelerated in March 2020 and continued in large part through the fourth quarter of 2022.
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.
Through a relationship with a local Mexican partner that holds a gaming permit, we, as a service provider for our partner, make our online sports betting offerings available under the RushBet brand in Mexico.
Through a relationship with a local Mexican partner that holds a gaming permit, we, as a service provider for our partner, make our online sports betting offerings available under the RushBet brand in Mexico. 21 In Peru, remote gaming and sports betting is regulated at the federal level through the MINCETUR.
As demonstrated in the chart below, the average lifetime value of our North American customer cohorts since inception (late 2016) generally trends higher as the cohorts mature, with our oldest player cohorts having an average lifetime value of approximately $6,000.
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.
These include, without limitation, our front-end online gaming platform, our back-end infrastructure, our ability to retain and monetize existing customers, re-engage prior customers and attract new customers, and our regulatory access, compliance and customer service experience. In the B2B space, primarily in the retail sportsbook market, our competitors include, without limitation, International Gaming Technology (IGT), Kambi, Playtech and OpenBet.
These include, without limitation, our front-end online gaming platform, our back-end infrastructure, our ability to retain and monetize existing customers, re-engage prior customers and attract new customers, and our regulatory access, compliance and customer service experience. 16 In the B2B space, primarily in the retail sportsbook market, our competitors include, without limitation, providers of gaming technology such as player account management and online betting and/or gaming platforms.
We generate revenue primarily through the following offerings: Online Casino Online casino offerings typically include the full suite of games available in bricks-and-mortar casinos, such as table games (i.e., blackjack and roulette) and slot machines. For these offerings, similar to bricks-and-mortar casinos, we generate revenue through hold, or gross winnings, as customers play against the house.
We generate revenue primarily through the following offerings: Online Casino Online casino offerings typically include the full suite of games available in bricks-and-mortar casinos, such as table games (i.e., blackjack and roulette), slot machines and poker games.
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.
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.
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.
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.
In striking down PASPA, the U.S. Supreme Court opened the potential for state-by-state authorization of sports betting. Numerous states and territories already have laws authorizing and regulating some form of sports betting online or in bricks-and-mortar establishments. Sports betting in the United States is subject to additional laws, rules and regulations at the state level.
PASPA prohibited a state from “authorizing by law” any form of sports betting. In striking down PASPA, the U.S. Supreme Court opened the potential for state-by-state authorization of sports betting. Numerous states and territories already have laws authorizing and regulating some form of sports betting online or in bricks-and-mortar establishments.
Mexico, Argentina, Peru and Brazil still have relatively low internet penetration, with 76%, 88%, 75% and 81%, respectively, of the population having internet access compared to 92% in the United States and 97% in the UK.
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.
See “ Risk Factors — Risk Related to Government Regulation — Our business is subject to numerous U.S. and foreign laws, 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 — 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.
Currently, we are authorized as a vendor to provide online casino and online and retail sports betting services to the Little River Casino Resort, a wholly owned and operated enterprise of the Little River Band of Ottawa Indians, and we also provide social casino offerings to Coushatta Casino Resort, a gaming enterprise owned and operated by the Coushatta Tribe of Louisiana.
Currently, we are authorized as a vendor to provide online casino and online and retail sports betting services to the Little River Casino Resort, a wholly owned and operated enterprise of the Little River Band of Ottawa Indians, and as a vendor to provide retail sports betting services to the Swinomish Indian Tribal Community dba Swinomish Casino & Lodge, a federally recognized Indian Tribe.
Only approximately 59% 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, more than 95% of the sports betting revenue in 2023 came via online 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 2024 came via online betting. Populous states such as California and Texas have not yet legalized online sports betting.
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 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.
Latin America In Colombia, we operate our online sports betting offering under the RushBet brand. We also operate 21 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.
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.

… 55 more changes not shown on this page.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

145 edited+54 added−14 removed405 unchanged
Biggest changeFines of up to 2% of annual worldwide revenues can be levied for other specified violations; and • Various state privacy laws, such as the California Consumer Privacy Act of 2018 (effective January 2020), which was amended by the California Privacy Rights Act (effective January 2023); the Virginia Consumer Data Protection Act (effective January 2023); the Colorado Privacy Act (effective July 2023); the Utah Consumer Privacy Act (effective December 2023); Connecticut’s “An Act Concerning Personal Data Privacy and Online Monitoring” (effective July 2023); the Delaware Personal Data Privacy Act (to be effective January 2025); the New Jersey Data Privacy Act (to be effective January 2025); and the New Hampshire Privacy Act (to be effective January 2025); all 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.
Biggest changeFines 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.
Our tax obligations are varied and include U.S. federal, state, and local and international taxes due to the nature of our business. The tax laws that apply to our business are subject to interpretation, and significant judgment is required in determining our worldwide provision for income taxes.
Our tax obligations are varied and include U.S. federal, state, local, and international taxes due to the nature of our business. The tax laws that apply to our business are subject to interpretation, and significant judgment is required in determining our worldwide provision for income taxes.
In addition, increases in our income tax rates or other changes in U.S. or international income tax laws could reduce our after-tax income from the relevant jurisdictions, and existing tax laws have been and could in the future be subject to significant change, any of which adversely affect our business, financial condition or results of operations.
In addition, increases in our income tax rates or other changes in U.S. or international income tax laws could reduce our after-tax income from the relevant jurisdictions, and existing U.S. or international tax laws have been and could in the future be subject to significant change, any of which adversely affect our business, financial condition or results of operations.
Such transactions may expose us to operational challenges and risks, including: • profitably managing acquired businesses, investments or partnerships or, if applicable, successfully integrating their operations, personnel, financial reporting, accounting and internal controls, technologies and products into our business; • increased indebtedness and integration expenses, including significant administrative, operational, technological, economic, geographic or cultural challenges in managing and integrating the expanded or combined operations; • entering into jurisdictions or acquiring products or technologies with which we have limited or no prior experience, and potential increased competition with new or existing competitors as a result of such transactions; • diverting management’s attention and the over-extending our operating infrastructure and management systems, information technology systems, and internal controls, which may be inadequate to support growth; • funding our capital needs and any cash flow shortages that may occur if anticipated revenue is not realized or is delayed, whether by general economic or market conditions, or unforeseen internal difficulties; • obtaining and/or maintaining relevant licenses, permits or approvals from applicable regulators; and • retaining or hiring qualified personnel required for expanded operations.
Such transactions may expose us to operational challenges and risks, including: • profitably managing acquired businesses, investments or partnerships or, if applicable, successfully integrating their operations, personnel, financial reporting, accounting and internal controls, technologies and products into our business; • increased indebtedness and integration expenses, including significant administrative, operational, technological, economic, geographic or cultural challenges in managing and integrating the expanded or combined operations; • entering into jurisdictions or acquiring products or technologies with which we have limited or no prior experience, and potential increased competition with new or existing competitors as a result of such transactions; • diverting management’s attention and over-extending our operating infrastructure and management systems, information technology systems, and internal controls, which may be inadequate to support growth; • funding our capital needs and any cash flow shortages that may occur if anticipated revenue is not realized or is delayed, whether by general economic or market conditions, or unforeseen internal difficulties; • obtaining and/or maintaining relevant licenses, permits or approvals from applicable regulators; and • retaining or hiring qualified personnel required for expanded operations.
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.
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.
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.
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.
Our security measures, and those of our third-party providers, may not detect or prevent all attempts to breach our systems, denial-of-service attacks, viruses, malicious software, break-ins, phishing attacks, social engineering, security breaches or other attacks and similar disruptions that may jeopardize the security of information stored in or transmitted by our websites, apps, networks and systems or that we or such third parties otherwise maintain, including payment card systems, which may subject us to fines or higher transaction fees, or limit or terminate our access to certain payment methods.
Our security measures, and those of our third-party providers, may not detect, prevent or hinder all attempts to breach our systems, denial-of-service attacks, viruses, malicious software, break-ins, phishing attacks, social engineering, security breaches or other attacks and similar disruptions that may jeopardize the security of information stored in or transmitted by our websites, apps, networks and systems or that we or such third parties otherwise maintain, including payment card systems, which may subject us to fines or higher transaction fees, or limit or terminate our access to certain payment methods.
In addition, any misappropriation of, or access to, customer or other proprietary information or other breach of our information security could result in legal claims or proceedings, including regulatory investigations and actions, or liability for failure to comply with privacy and information security laws, including for failure to protect personal information or for misusing personal information, which could disrupt our operations, force us to modify our business practices, damage our reputation and expose us to claims from our customers, regulators, employees and other persons, any of which could have an adverse effect on our business, financial condition, results of operations and prospects.
In addition, any misappropriation of, or access to, customer or other proprietary information or other breach of our information security could result in legal claims or proceedings, including regulatory investigations and actions, or liability 28 for failure to comply with privacy and information security laws, including for failure to protect personal information or for misusing personal information, which could disrupt our operations, force us to modify our business practices, damage our reputation and expose us to claims from our customers, regulators, employees and other persons, any of which could have an adverse effect on our business, financial condition, results of operations and prospects.
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.
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.
Failure to renew or expand existing licenses or other agreements may require us to modify, limit or discontinue certain offerings, which could materially affect our business, financial condition, results of operations and prospects. • We are a “controlled” company within the meaning of the NYSE rules and, as a result, we qualify for, and intend to rely on, exemptions from certain corporate governance requirements.
Failure to renew or expand existing licenses or other agreements may require us to modify, limit or discontinue certain offerings, which could materially affect our business, financial condition, results of operations and prospects. 24 • We are a “controlled” company within the meaning of the NYSE rules and, as a result, we qualify for, and intend to rely on, exemptions from certain corporate governance requirements.
To attract top talent in a competitive industry and labor market, we have offered, and believe we will need to continue to offer, robust compensation packages before we can validate an individual’s productivity. Many companies now offer 26 remote or hybrid work environments, which may increase the competition for such employees from employers outside of our traditional office locations.
To attract top talent in a competitive industry and labor market, we have offered, and believe we will need to continue to offer, robust compensation packages before we can validate an individual’s productivity. Many companies now offer remote or hybrid work environments, which may increase the competition for such employees from employers outside of our traditional office locations.
We also rely on third parties for content delivery such as online slots, table games, and live dealer games, load balancing and certain cybersecurity protections such as against distributed denial-of-service attacks. If those providers do not perform adequately, our customers may experience issues or interruptions with our offerings, and gaming regulators may hold us responsible for those providers’ errors.
We also rely mostly on third parties for content delivery such as online slots, table games, and live dealer games, load balancing and certain cybersecurity protections such as against distributed denial-of-service attacks. If those providers do not perform adequately, our customers may experience issues or interruptions with our offerings, and gaming regulators may hold us responsible for those providers’ errors.
A negative shift in public opinion of sports betting or online casino, or how politicians and other governmental authorities view sports betting or online casino, whether fueled by news outlets or otherwise, could result in future legislation or new regulations restricting or prohibiting some or all sports betting or online casino activities in certain 34 jurisdictions, the result of which may negatively impact our business, financial condition, results of operations and prospects.
A negative shift in public opinion of sports betting or online casino, or how politicians and other governmental authorities view sports betting or online casino, whether fueled by news outlets or otherwise, could result in future legislation or new regulations restricting or prohibiting some or all sports betting or online casino activities in certain jurisdictions, the result of which may negatively impact our business, financial condition, results of operations and prospects.
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.
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.
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 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 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.
Additionally, if a large number of additional jurisdictions or the U.S. federal government enact real-money gaming legislation and we are unable to obtain or are otherwise delayed in obtaining 37 the necessary licenses to operate online sports betting or online gaming in jurisdictions where such games are legalized, our future growth could be materially impaired.
Additionally, if a large number of additional jurisdictions or the U.S. federal government enact real-money gaming legislation and we are unable to obtain or are otherwise delayed in obtaining the necessary licenses to operate online sports betting or online gaming in jurisdictions where such games are legalized, our future growth could be materially impaired.
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.
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.
While we have a vendor management policy and process, which may include performing due diligence and/or risks assessments, as well potentially seeking contractual 46 and other protections from these vendors, our vendors may infringe the intellectual property rights of others or lack sufficient rights to such technology in all jurisdictions in which we may operate.
While we have a vendor management policy and process, which may include performing due diligence and/or risks assessments, as well as potentially seeking contractual and other protections from these vendors, our vendors may infringe the intellectual property rights of others or lack sufficient rights to such technology in all jurisdictions in which we may operate.
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 51 RSILP.
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.
We also currently operate under foreign licenses in Colombia, Ontario, Canada and Mexico. In May 2018, the U.S. Supreme Court struck down as unconstitutional PASPA. This decision effectively lifted federal restrictions on sports betting, thus allowing states to determine by themselves the legality of sports betting.
We also currently operate under foreign licenses in Colombia, Ontario, Canada, Mexico and Peru. In May 2018, the U.S. Supreme Court struck down as unconstitutional PASPA. This decision effectively lifted federal restrictions on sports betting, thus allowing states to determine by themselves the legality of sports betting.
Among others, we are, or may become, subject to the following laws and regulations: 36 • 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, or the monitoring of their behavior in the EU.
In the United States and certain foreign jurisdictions, we have filed applications to protect aspects of our intellectual property. We currently hold several patent applications in multiple jurisdictions, and in the future we may 41 acquire additional patents, which could require significant cash expenditures. Third parties may knowingly or unknowingly infringe our intellectual property rights.
In the United States and certain foreign jurisdictions, we have filed applications to protect aspects of our intellectual property. We currently hold several patent applications in multiple jurisdictions, and in the future we may acquire additional patents, which could require significant cash expenditures. Third parties may knowingly or unknowingly infringe our intellectual property rights.
The number and amount of betting losses and jackpot payouts we experience may 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. We offer progressive jackpot games in our online casino offerings.
If we are unable to access and leverage any such customer database or if it becomes uneconomical to do such, our ability to effectively market and promote our offerings in certain 29 jurisdictions could be impacted, which could materially adversely affect our business, reputation, financial condition, operating results and cash flows.
If we are unable to access and leverage any such customer database or if it becomes uneconomical to do such, our ability to effectively market and promote our offerings in certain jurisdictions could be impacted, which could materially adversely affect our business, reputation, financial condition, operating results and cash flows.
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, 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, 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.
Our operating results and financial performance may fluctuate due to seasonal trends and other factors such as customer engagement levels, online casino and sports betting results and other factors that are outside of our control or that we cannot reasonably predict. Our financial performance depends on, among other things, our ability to attract and retain customers.
Our operating results and financial performance fluctuate due to seasonal trends and other factors such as customer engagement levels, online casino and sports betting results and other factors that are outside of our control or that we cannot reasonably predict. Our financial performance depends on, among other things, our ability to attract and retain customers.
We and such third parties may not anticipate or prevent all types of attacks until after they have already been launched. Further, techniques used to obtain unauthorized access to, or sabotage, systems change frequently and may not be known until launched against us or our third-party service providers.
We and such third parties may not anticipate, detect or prevent all types of attacks until after they have already been launched. Further, techniques used to obtain unauthorized access to, or sabotage, systems change frequently and may not be known until launched against us or our third-party service providers.
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.
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 promotion of our brand, however, may not directly generate customer awareness or increase revenue, and any increase in revenue may not offset the expenses we incur in building and maintaining our brand. We operate in a public-facing industry in which every aspect of our business is impacted by social media.
The promotion of our brand, however, may not directly generate customer awareness or increase revenue, and any increase in revenue may not offset the expenses we incur in building and maintaining our brand. We operate in a public-facing industry in which nearly every aspect of our business is impacted by social media.
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. Furthermore, 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 sponsorships, compelling offers, brand ambassadors, proprietary content, and unique game and site features, to attract and engage customers. Furthermore, we continuously optimize our marketing spend using data collected from our operations.
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, 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 and content, media interviews and other media spots and organic searches.
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 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” capitation fee for each customer introduced, or sometimes a 29 combination of both.
We rely, and expect to continue to rely, on relationships with casinos, tribes and other third parties to attract customers to our offerings. These relationships, along with our use of providers of online services, search engines, social media, directories, affiliate networks and other websites and e-commerce businesses, direct individuals to our offerings.
We rely, and expect to continue to rely, on relationships with casinos, tribes, lotteries and other third parties to attract customers to our offerings. These relationships, along with our use of providers of online services, search engines, social media, directories, affiliate networks and other websites and e-commerce businesses, direct individuals to our offerings.
Fluctuations in the price of our securities could contribute to the loss of all or part of your investment. Even if an active market for our securities develops and/or continues, the trading price of our securities could be volatile and subject to wide fluctuations in response to various factors, some of which are beyond our control.
Fluctuations in the price of our securities could contribute to the loss of all or part of your investment. Even if an active market for our securities continues, the trading price of our securities could be volatile and subject to wide fluctuations in response to various factors, some of which are beyond our control.
To date, we believe we have obtained all governmental licenses, findings of 38 suitability, registrations, permits and approvals necessary for our operations. However, we cannot guarantee that additional licenses, permits and approvals that may be required will be given or that existing ones will be renewed or will not be revoked.
To date, we believe we have obtained all governmental licenses, findings of suitability, registrations, permits and approvals necessary for our operations. However, we cannot guarantee that additional licenses, permits and approvals that may be required will be given or that existing ones will be renewed or will not be revoked.
If we are unable to maintain or improve our market share, or if our offerings do not continue to be popular our business, financial condition, results of operations and prospects could be adversely affected. Competitive pressures may also adversely affect our margins.
If we are unable to maintain or improve our market share, or if our offerings do not continue to be popular our business, financial condition, results of operations and prospects could be adversely affected. 25 Competitive pressures may also adversely affect our margins.
If a payment processor terminates its relationship with us or refuses to renew its agreement with us on commercially reasonable terms, we may 45 need to find an alternate payment processor, and may be unable to secure similar terms or replace such payment processor in a reasonable time frame.
If a payment processor terminates its relationship with us or refuses to renew its agreement with us on commercially reasonable terms, we may need to find an alternate payment processor, and may be unable to secure similar terms or replace such payment processor in a reasonable time frame.
If any of our existing or future relationships fail to provide services to us in accordance with the terms of our applicable arrangement, or at all, and we are unable to find suitable alternatives, this could impact our ability to cost-effectively attract customers and harm our business, financial condition, results of operations and prospects. 47 Risks Related to Our Arrangements with Affiliates We are a “controlled” company within the meaning of the NYSE rules and, as a result, we qualify for, and intend to rely on, exemptions from certain corporate governance requirements.
If any of our existing or future relationships fail to provide services to us in accordance with the terms of our applicable arrangement, or at all, and we are unable to find suitable alternatives, this could impact our ability to cost-effectively attract customers and harm our business, financial condition, results of operations and prospects. 49 Risks Related to Our Arrangements with Affiliates We are a “controlled” company within the meaning of the NYSE rules and, as a result, we qualify for, and intend to rely on, exemptions from certain corporate governance requirements.
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.
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.
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.
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.
Should our agreements with any third-party cloud service provider terminate or we add new cloud infrastructure service providers, we may experience additional costs and platform 44 performance downtime in adding or transitioning to new or additional providers.
Should our agreements with any third-party cloud service provider terminate or we add new cloud infrastructure service providers, we may experience additional costs and platform performance downtime in adding or transitioning to new or additional providers.
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 48 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 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.
Geopolitical instability may lead to sanctions or impact our ability to do business in some markets. Any of these changes may negatively impact our revenues. 56 ITEM 1B. UNRESOLVED STAFF COMMENTS None.
Geopolitical instability may lead to sanctions or impact our ability to do business in some markets. Any of these changes may negatively impact our revenues. ITEM 1B. UNRESOLVED STAFF COMMENTS None.
Disruptions in the availability of these may negatively impact our business, financial conditions, results of operations and prospects. • 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. 23 • Our business is subject to numerous U.S. and foreign laws, many of which are unsettled and still developing.
Disruptions in the availability of these may negatively impact our business, financial conditions, results of operations and prospects. • 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. • Our business is subject to numerous U.S. and foreign laws and regulations, many of which are unsettled and still developing.
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.
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.
In late 2022, some of our competitors experienced targeted attacks resulting in customer accounts being compromised and unauthorized withdrawals of customer funds and in 2023, several casinos experienced ransomware attacks that resulted in customer accounts being compromised.
In late 2022, some of our competitors experienced targeted attacks resulting in customer accounts being compromised and unauthorized withdrawals of customer funds and in 2023 and 2024, several casinos experienced ransomware attacks that resulted in customer accounts being compromised.
Some gaming authorities require gaming manufacturers to obtain approval before engaging in certain transactions, such as acquisitions, mergers, reorganizations, financings, stock offerings and share 42 repurchases.
Some gaming authorities require gaming manufacturers to obtain approval before engaging in certain transactions, such as acquisitions, mergers, reorganizations, financings, stock offerings and share repurchases.
Additionally, issues relating to intellectual property rights in AI-generated content have not been fully addressed by U.S. courts or other federal or state laws or regulations, and the use or adoption of third-party AI technologies into our 43 products and services may result in exposure to claims related to copyright infringement or other intellectual property misappropriation.
Additionally, issues relating to intellectual property rights in AI-generated content have not been fully addressed by U.S. courts or other federal or state laws or regulations, and the use or adoption of third-party AI technologies into our 45 products and services may result in exposure to claims related to copyright infringement or other intellectual property misappropriation.
Such infrastructure and facilities are vulnerable to damage or interruption from natural disasters, cybersecurity attacks, terrorist attacks, power outages and similar events or acts of misconduct.
Such infrastructure and facilities are vulnerable to damage or interruption from natural disasters, cybersecurity attacks and incidents, terrorist attacks, power outages and similar events or acts of misconduct.
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. 55 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 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.
It cannot be assured that in every case of such clear error regulators will continue to approve the voiding of such errors. • The success of existing or future online offerings, including win or hold rates, depends on a variety of factors and is not completely controlled by us. • We rely on strategic relationships with local partners such as casinos, lotteries or professional sports teams to be able to provide our offerings in certain jurisdictions.
It cannot be assured that in every case of such clear error regulators will continue to approve the voiding of such errors. • The success of existing or future online offerings, including win or hold rates, depends on a variety of factors and is not completely controlled by us. • We rely on strategic relationships with local partners such as casinos, lotteries, Native American tribes or professional sports teams to be able to provide our offerings in certain jurisdictions.
If our revenue does not grow at a greater rate than our expenses, we may be unable to become or 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 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.
We rely on several different marketing channels to acquire and retain customers and to promote our brands and our products. If we are not able to effectively acquire and retain customers via such channels then our business, financial condition, results of operations and prospects could be harmed. Our ability to effectively market is critical to our success.
We rely on many different marketing channels to acquire and retain customers and to promote our brands and our products. If we are not able to effectively acquire and retain customers via such channels then our business, financial condition, results of operations and prospects could be harmed. Our ability to effectively market is critical to our success.
However, a challenge to any tax benefits initially claimed by us and our consolidated subsidiaries (including the Special Limited Partner) may not arise for a number of years following the initial time of such payment and, even if challenged earlier, such excess cash payment may be greater than the amount of future cash payments that we and our consolidated subsidiaries (including the Special Limited Partner) might otherwise be required to make under the TRA and, as a result, there might not be future cash payments against which such excess can be applied.
However, a challenge to any tax benefits initially claimed by us and our consolidated subsidiaries (including the Special Limited Partner) may not arise for a number of years following the initial time of such payment and, even if challenged earlier, such excess cash payment may be greater than the amount of future cash payments that we and our consolidated subsidiaries (including the Special Limited Partner) might otherwise be required to make under the TRA and, thus, there might not be future cash payments against which such excess can be applied.
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.
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.
We offer our real-money offerings in 15 U.S. states that have adopted legislation and regulations permitting online casino, online sports betting and/or retail sports betting. In those states that currently require a license or registration, we have obtained the appropriate license or registration or have obtained a provisional license.
We offer our real-money offerings in 16 U.S. states that have adopted legislation and regulations permitting online casino, online sports betting and/or retail sports betting. In those states that currently require a license or registration, we have obtained the appropriate license or registration or have obtained a provisional license.
While RSG provides these services to us, we will depend on them for services that are critical to our operations, and our operational flexibility to modify or implement changes with respect to such services and the cost of them will be limited.
To the extent RSG provides these services to us, we will depend on them for services that are critical to our operations, and our operational flexibility to modify or implement changes with respect to such services and the cost of them will be limited.
These provisions include a staggered board, the controlling provisions of the Investor Rights Agreement, a supermajority vote required to amend certain Charter provisions and the Board’s ability to designate the terms, and issue new series, of preferred stock, which may make removing management more difficult and may discourage transactions that otherwise could involve payment of a premium over prevailing market prices for our securities. 54 General Risk Factors Economic downturns and political and market conditions beyond our control, including reduced consumer discretionary spending, and adverse developments with respect to financial institutions and associated liquidity risk could adversely affect our business, financial condition, results of operations and prospects.
These provisions include a staggered board, the controlling provisions of the Investor Rights Agreement, a super majority vote required to amend certain Charter provisions and the Board’s ability to designate the terms, and issue new series, of preferred stock, which may make removing management more difficult and may discourage transactions that otherwise could involve payment of a premium over prevailing market prices for our securities. 56 General Risk Factors Economic downturns and political and market conditions beyond our control, including reduced consumer discretionary spending, and adverse developments with respect to financial institutions and associated liquidity risk could adversely affect our business, financial condition, results of operations and prospects.
The use of artificial intelligence (“AI”), in particular generative AI, processes at scale is relatively new, and may lead to challenges, concerns and risks that are significant or that we may not be able to predict, especially if our or our vendors’ use of these technologies with respect to our products, services, systems and/or operations becomes more important to us over time.
The use of AI, in particular generative AI, processes at scale is relatively new, and may lead to challenges, concerns and risks that are significant or that we may not be able to predict, especially if our or our vendors’ use of these technologies with respect to our products, services, systems and/or operations becomes more important to us over time.
Further, more recently, the closures of Silicon Valley Bank and Signature Bank and their placement into receivership with the Federal Deposit Insurance Corporation (“FDIC”) created bank-specific and broader financial institution liquidity risk and concerns.
Further, more recently, the closures of Silicon Valley Bank and Signature Bank in 2023 and their placement into receivership with the Federal Deposit Insurance Corporation (“FDIC”) created bank-specific and broader financial institution liquidity risk and concerns.
We rely on strategic relationships with local partners such as land-based casinos, lotteries or professional sports teams to be able to provide our offerings in certain jurisdictions. If we cannot establish and manage relationships with these partners, our business, financial condition, results of operations and prospects could be adversely affected.
We rely on strategic relationships with local partners such as land-based casinos, lotteries, Native American tribes or professional sports teams to be able to provide our offerings in certain jurisdictions. If we cannot establish and manage relationships with these partners, our business, financial condition, results of operations and prospects could be adversely affected.
We can give no assurance that any measures we take in the future will remediate any material weakness we may identify or that any additional material weaknesses or restatements of financial results will not arise in the future due to a failure to implement and maintain adequate disclosure controls and procedures or internal control over financial reporting or circumvention of these controls.
We can give no assurance that any measures we take in the future will remediate any material weakness that may be identified or that any additional material weaknesses or restatements of financial results will not arise in the future due to a failure to implement and maintain adequate disclosure controls and procedures or internal control over financial reporting or circumvention of these controls.
We have also entered into a services agreement with RSG, under which RSG and its affiliates provide certain limited corporate and shared services related to functions such as government affairs, business development, insurance and other services, and entered into license agreements with affiliated entities, pursuant to which we license the BetRivers and PlaySugarHouse brands.
We have also entered into a services agreement with RSG, under which RSG and its affiliates previously provided certain limited corporate and shared services related to functions such as government affairs, business development, insurance and other services, and entered into license agreements with affiliated entities, pursuant to which we license the BetRivers and PlaySugarHouse brands.
Compliance with international, Colombian, Estonian, Canadian, Mexican, Maltese, U.S. and other laws and regulations that apply to our operations increases our cost of doing business.
Compliance with international, Colombian, Estonian, Canadian, Mexican, Peruvian, Serbian, Maltese, U.S. and other laws and regulations that apply to our operations increases our cost of doing business.
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. 52 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.
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.
To date, these attacks have not had a material impact on our operations or financial results, but we cannot assure you that they will not have a material impact in the future, 39 including by overloading our systems and network and preventing our offerings from being accessed by legitimate customers.
To date, these attacks have not had a material impact on our operations or financial results, but we cannot assure you that they will not have a material impact in the future, including by overloading our systems and network and preventing our legitimate customers from accessing our offerings.
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, 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 or macroeconomic conditions.
Nearly all payments on our platform are made by credit card, debit card or through other third-party payment services, which subjects us to certain regulations and to the risk of fraud. We may in the future offer new payment options to customers that may be subject to additional regulations and risks.
Nearly all payments on our platform are made by credit card, debit card, ACH bank transfers, e-wallets or through other third-party payment services, which subjects us to certain regulations and to the risk of fraud. We may in the future offer new payment options to customers that may be subject to additional regulations and risks.
Rather, excess payments made to such holders will be applied against and reduce any future cash payments otherwise required to be made by the Special Limited Partner, if any, after the determination of such excess.
Rather, excess payments made to such holders will be applied against and reduce any future cash payments otherwise required to be made by the Special Limited Partner, if any, after determining such excess.
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; 53 • 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, interest rates, 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 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.
To help protect customer accounts, we offer, and in some jurisdictions we require, multi-factor authentication and strong authentication. Given the data intensive nature of our business, we have experienced attempts to breach our systems and other similar incidents in the past.
To help protect customer accounts, we offer, and in some jurisdictions we require, multi-factor authentication and strong authentication. Given the data intensive nature of our business, we have experienced attempts to breach our systems and other similar incidents in the past and expect to experience additional attempts in the future.
For example, such errors have consisted of inverted lines between teams, start times of games that, due to time zone differences, have already commenced or odds that are significantly different from the correct odds in a way that reasonable persons would agree is an error. Such errors have in certain instances resulted in large liabilities.
For example, such errors have consisted of inverted lines between teams, start times of games that, due to time zone differences, have already commenced or odds that are significantly different from the correct odds in a way that reasonable persons would agree is an error.
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. 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.
For example, the 2017 U.S. Tax Cuts and Jobs Act (the “TCJA”) was signed into law in the United States in 2017, which provided for significant changes to then-existing tax laws and additional guidance issued by the IRS pursuant to the TCJA may continue to impact us in future periods.
For example, the 2017 U.S. Tax Cuts and Jobs Act (the “TCJA”) was signed into law in the United States in 2017, which provided for significant changes to then-existing tax laws. Additional guidance issued by the IRS pursuant to the TCJA or an extension of TCJA provisions may impact us in future periods.
We have made, and intend to continue to make, significant investments to support our business growth and may require additional funds to respond to business challenges, including the need to develop new offerings and features, enhance our existing platform, improve our operating infrastructure or acquire complementary businesses, personnel or technologies.
We have made, and intend to continue to make, significant investments to support our business growth and may require additional funds to respond to business challenges, including the need to launch some or all of our offerings in new markets, develop new offerings and features, enhance our existing platform, improve our operating infrastructure or acquire complementary businesses, personnel or technologies.
We continue to devote significant resources to protect against security breaches, and we may need to in the future to address problems caused by breaches, including notifying affected customers and responding to any resulting litigation or investigations, which in turn, diverts resources from growing and expanding our business.
We continue to devote significant resources to protect against security breaches, and we may need to in the future to address problems caused by breaches, including notifying affected customers, authorities and regulatory bodies, investigating the matter, and responding to any resulting litigation or regulatory investigations or action, which in turn, diverts resources from growing and expanding our business.
Any delays in obtaining or difficulty in maintaining regulatory approvals needed for expansion 35 within existing jurisdictions or into new jurisdictions can negatively affect our opportunities for growth, including the growth of our customer base, or delay our ability to recognize revenue from our offerings in any such jurisdictions.
Any delays in obtaining or difficulty in maintaining regulatory approvals needed for expansion within existing jurisdictions or into new jurisdictions can negatively affect our opportunities for growth, including the growth of our customer base, or delay our ability to recognize revenue from our offerings in any such jurisdictions. Additionally, in June 2024, the U.S.
Historically, RSG and certain of its affiliates have provided, and in certain cases continue to provide, under a services agreement between us and RSG, certain limited corporate and shared services such as government affairs, certain business development, insurance and other services.
Historically, RSG and certain of its affiliates have provided under a services agreement between us and RSG, certain limited corporate and shared services such as government affairs, certain business development, insurance and other services.
While we are analyzing the impact of the IRA, we are currently unable to predict whether other proposed changes will occur and, if so, when they would be effective or the ultimate impact on us or our business.
While the current impact of the IRA on us has not been material, we are currently unable to predict whether other proposed changes will occur and, if so, when they would be effective or the ultimate impact on us or our business.
Security breaches can also occur as a result of non-technical issues, including intentional or inadvertent breaches by our personnel or by third parties. These risks may increase over time as the complexity and number of technical systems and applications we use increases.
Security breaches can also occur as a result of non-technical issues, including intentional or inadvertent breaches by our personnel or by third parties or failures to detect or adequately respond to breaches of our security measures. These risks increase over time as the complexity and number of technical systems and applications we use increases.

… 133 more changes not shown on this page.

Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

6 edited+1 added−0 removed9 unchanged
Biggest changeManagement also regularly communicates cybersecurity risks and activities with other members of management and, as appropriate, to our Board or relevant members or committees thereof, including the Audit Committee. We, like many other companies in the gaming and entertainment space, experience routine cybersecurity threats such as DDOS, phishing or social engineering attacks.
Biggest changeManagement also regularly communicates cybersecurity risks and activities with other members of management and, as appropriate, to our Board or relevant members or committees thereof, including the Audit Committee.
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. We also 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 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.
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.
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.
Internally, we also have a security awareness program which includes training that reinforces our information technology and security policies, standards and practices, and we require that our employees comply with these policies. The security awareness program offers training on how to identify potential cybersecurity risks and protect our resources and information.
Internally, we have a security awareness program, which includes training that reinforces our information technology and security policies, standards and practices, and we require that our employees comply with these policies. The security awareness program offers training on how to identify potential cybersecurity risks and protect our resources and information.
For more information on our cybersecurity related risks, see Item 1A Risk Factors of this Annual Report on Form 10-K. 57
For more information on our cybersecurity related risks, see Item 1A Risk Factors of this Annual Report on Form 10-K.
Our 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, and certain members of his team 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.
Our 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.
Added
We, like many other companies in the gaming and entertainment space, including some of our market access partners and suppliers, experience routine cybersecurity threats such as DDOS, phishing or social engineering attacks.

Item 2. Properties

Properties — owned and leased real estate

1 edited+1 added−0 removed2 unchanged
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), Colombia (Bogota, and Medellin), Estonia (Tartu and Tallinn), and Canada (Toronto). We anticipate obtaining additional space as we continue to grow globally and increase headcount.
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).
Added
We anticipate obtaining additional space as we continue to grow globally and increase headcount.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

1 edited+1 added−0 removed3 unchanged
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.
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.
Added
MINE SAFETY DISCLOSURES Not applicable. 60 PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

3 edited+5 added−0 removed4 unchanged
Biggest changeThe payment of any cash dividends will be within the discretion of the Board at such time. 58 Stock Price Performance The graph above compares the cumulative total stockholder return on our Class A Common Stock with the cumulative total return on the Standard & Poor’s (“S&P”) 500 Consumer Discretionary Index and the NYSE Composite Index.
Biggest changeStock Price Performance The graph below compares the cumulative total stockholder return on our Class A Common Stock with the cumulative total return on the Standard & Poor’s (“S&P”) 500 Consumer Discretionary Index and the NYSE Composite Index.
Recent Sales of Unregistered Securities None. Securities Authorized for Issuance Under Equity Compensation Plans See Part III, Item 12 of this Form 10-K and Note 10 to our consolidated financial statements, included elsewhere in this Annual Report, for additional information. Purchases of Equity Securities by the Issuer and Affiliated Purchasers None. ITEM 6. RESERVED
Securities Authorized for Issuance Under Equity Compensation Plans See Part III, Item 12 of this Form 10-K and Note 7 to our consolidated financial statements, included elsewhere in this Annual Report, for additional information. Purchases of Equity Securities by the Issuer and Affiliated Purchasers None ITEM 6. RESERVED 62
As of March 6, 2024, there were 61 holders of record of our Class A Common Stock and 19 holders of record of our Class V Voting Stock.
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.
Added
The payment of any cash dividends will be within the discretion of the Board at such time. However, our subsidiary, RSILP, is required under the RSILP A&R LPA make certain tax distributions to the RSILP partners.
Added
See “ Risk Factors — Risks Related to our Securities, Corporate Structure, Governing Documents and Tax Receivable Agreement — Our principal asset is our interests in RSILP (held through our wholly owned subsidiaries), and accordingly we depend on distributions from RSILP to pay taxes and expense” and Note 12 to our consolidated financial statements, included elsewhere in this Annual Report, for additional information.
Added
Historic stock price performance is not necessarily indicative of future stock price performance.
Added
Accordingly, we do not make or endorse any predictions as to future performance. 61 The foregoing performance graph shall not be deemed to be “filed” for purposes of Section 18 of the Exchange Act, nor shall this information be incorporated by reference into any future filing under the Securities Act or the Exchange Act, except to the extent that we specifically incorporate it by reference into a filing.
Added
February 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.

Item 7. Management's Discussion & Analysis

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

84 edited+24 added−42 removed97 unchanged
Biggest changeCurrently, we offer real-money online casino, online sports betting and/or retail sports betting in 15 U.S. states and the three international markets as outlined in the table below. 60 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 West Virginia ü ü International: Colombia ü ü Ontario (Canada) ü ü Mexico 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 Mexico).
Biggest changeOur 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).
While real-money B2C transactions represent a majority of our revenue, our social gaming offerings generally increase customer engagement and build online databases in key markets both before and after legalization and regulation. We believe our B2C model is flexible, permitting us to customize our operating structure based on applicable gaming regulations, market demands and, as applicable, our partner’s operations.
While real-money transactions represent a majority of our B2C revenue, our social gaming offerings generally increase customer engagement and build online databases in key markets both before and after legalization and regulation. We believe our B2C model is flexible, permitting us to customize our operating structure based on applicable gaming regulations, market demands and, as applicable, our partner’s operations.
Our 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, 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 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.
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, 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.
Our actual results and timing of selected events may differ materially from those anticipated in these forward-looking statements as a result of 59 many factors, including those discussed under the sections of this Annual Report captioned “Cautionary Note Regarding Forward-Looking Statements” and “Risk Factors.” This Management’s Discussion and Analysis of Financial Condition and Results of Operations (this “MD&A”) contains certain financial measures, in particular the presentation of Adjusted EBITDA, which are not presented in accordance with generally accepted accounting principles of the United States (“GAAP”).
Our actual results and timing of selected events may differ materially from those anticipated in these forward-looking statements as a result of many factors, including those discussed under the sections of this Annual Report captioned “Cautionary Note Regarding Forward-Looking Statements” and “Risk Factors.” This Management’s Discussion and Analysis of Financial Condition and Results of Operations (this “MD&A”) contains certain financial measures, in particular the presentation of Adjusted EBITDA, which are not presented in accordance with generally accepted accounting principles of the United States (“GAAP”).
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. 68 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 permitted) where users can earn or purchase virtual credits to enjoy free-to-play games.
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 76 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 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 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 68 access to more resources.
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.
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.
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 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.
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.
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.
Revenue share and market access fees consist primarily of 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.
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.
Readers of this MD&A should use these non-GAAP financial measures only in conjunction with the comparable GAAP financial measures. Reconciliations of Adjusted EBITDA to Net Loss, the most comparable GAAP measure, are provided in this MD&A.
Readers of this MD&A should use these non-GAAP financial measures only in conjunction with the comparable GAAP financial measures. Reconciliations of Adjusted EBITDA to Net Income (Loss), the most comparable GAAP measure, are provided in this MD&A.
Through our primary operating model, B2C, we offer online casino, online sports betting, retail sports betting and social gaming directly to the end customer through our websites, apps or physical retail locations.
Through our primary operating model, B2C, we offer online casino, online sports betting, retail sports betting and social gaming directly to the end 63 customer through our websites, apps or physical retail locations.
Jurisdictions that have established state or government-run monopolies may limit opportunities for private operators such as us. States, foreign jurisdictions and some local governments impose tax rates on online casino and sports betting, which may vary substantially between jurisdictions and may change from time to time, usually because on factors outside our 66 control.
Jurisdictions that have established state or government-run monopolies may limit opportunities for private operators such as us. States, foreign jurisdictions and some local governments impose tax rates on online casino and sports betting, which may vary substantially between jurisdictions and may change from time to time, usually because of factors outside our control.
In Latin America, several countries, including 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 than we anticipate.
Costs of revenue consist primarily of (i) revenue share and market access fees, (ii) 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, (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.
Our historical and outstanding share-based compensation awards are described in Note 10 to our consolidated financial statements, included elsewhere in this Annual Report. Share-based compensation expense is measured based on the grant-date fair value of the stock-based awards and is recognized over the requisite service period of the awards.
Our historical and outstanding share-based compensation awards are described in Note 8 to our consolidated financial statements, included elsewhere in this Annual Report. Share-based compensation expense is measured based on the grant-date fair value of the stock-based awards and is recognized over the requisite service period of the awards.
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), 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 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.
Our B2C operations contributed more than 98% of our total revenue for the years ended December 31, 2023 and 2022, and we expect that it will continue to be our primary operating model into the future.
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.
To date, no material payments under the TRA have been made, and no material payments or accrued payments thereunder are expected in the near future as payments under the TRA are not owed until the tax benefits generated thereunder are more-likely-than-not to be realized.
To date, no material payments under the TRA have been made, and no material payments thereunder are expected in the near future as payments under the TRA are not owed until the tax benefits generated thereunder are more-likely-than-not to be realized.
A discussion of changes in cash flows in 2022 compared to 2021 has been omitted from this Form 10-K, but it may be found in “Item 7.
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.
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).
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).
In addition, we will continue to pursue expansion into new markets, which is expected to require significant capital investments. We have $49.5 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 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.
See Note 15 of our consolidated financial statements, included elsewhere in this Annual Report for a summary of our commitments as of December 31, 2023. 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, 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.
Our strategy is to enter new jurisdictions that we believe are financially prudent for us to enter. Online casino is currently authorized only in seven U.S. states: Connecticut, Delaware, Michigan, New Jersey, Pennsylvania, West Virginia 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 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).
Management’s Discussion and Analysis of Financial Condition and Results of Operations” of our Form 10-K for the fiscal year ended December 31, 2022, filed with the SEC on March 2, 2023, 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. 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, 2022, filed with the SEC on March 2, 2023, 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, 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.
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 $9.1 million of non-cancellable purchase obligations with marketing vendors, $3.5 million of license and market access fees and $1.9 million of lease payments.
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.
As of the date hereof, 39 states and the District of Columbia have authorized sports betting. Of those 40 jurisdictions, 31 states have authorized statewide online sports betting while 9 remain authorized for retail-only at casinos or retail locations.
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.
Online casino revenue is generated based on total customer bets less amounts paid to customers for winning bets, less incentives awarded to customers, plus or minus the change in the progressive jackpot reserve.
Online casino revenue (other than from online poker) is generated based on total customer bets less amounts paid to customers for winning bets, less incentives awarded to customers, plus or minus the change in the progressive jackpot reserve.
We had $168.3 million in cash and cash equivalents as of December 31, 2023 (excluding legally restricted customer cash deposits, which we segregate from our operating cash balances). We intend to continue to finance our operations without third-party debt and entirely from operating cash flows and cash on our balance sheet.
We had $229.2 million in cash and cash equivalents as of December 31, 2024 (excluding legally restricted customer cash deposits, which we segregate from our operating cash balances). We intend to continue to finance our operations without third-party debt and entirely from operating cash flows and cash on our balance sheet.
The decrease was mainly due to management’s strategy of rationalizing marketing spend as the North American and Latin American online gaming markets continue to mature. Advertising and promotions expense as a percentage of revenue decreased to 23% in 2023 as compared to 37% in 2022. General and Administrative.
The decrease was mainly due to management’s strategy of rationalizing marketing spend as the North American and Latin American online gaming industries continue to mature. Advertising and promotions expense as a percentage of revenue decreased to 17% in 2024 as compared to 23% in 2023. General and Administrative.
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 and insurance costs. Depreciation and Amortization.
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.
See Notes 2, 4 and 5 to our consolidated financial statements, included elsewhere in this Annual Report. 69 Results of Operations The following table sets forth a summary of our consolidated results of operations for the years indicated, and the changes between periods. We have derived this data from our consolidated financial statements included elsewhere in this Annual Report.
Results of Operations The following table sets forth a summary of our consolidated results of operations for the years indicated, and the changes between periods. We have derived this data from our consolidated financial statements included elsewhere in this Annual Report.
Revenue increased by $98.9 million, or 17%, to $691.1 million in 2023 as compared to $592.2 million in 2022. The increase was mainly due to and directly correlated with our continued growth across existing markets and expansion into new markets that launched during 2022 and 2023.
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.
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. 72 Surety Bonds As of December 31, 2023, we had been issued $28.0 million in surety bonds that are used to satisfy regulatory requirements related to securing cash held on behalf of customers and $4.6 million in surety bonds to satisfy regulatory requirements necessary to operate in certain jurisdictions.
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.
As a result, if factors or expected outcomes change and our management uses significantly different assumptions or estimates, our share-based compensation expense for future periods could be materially different, including as a result of adjustments to share-based compensation expense recorded for prior periods.
As a result, if factors or expected outcomes change and our management uses significantly different assumptions or estimates, our share-based compensation expense for future periods could be materially different, including as a result of adjustments to share-based compensation expense recorded for prior periods. Income Taxes We account for income taxes using the asset and liability method.
The expected term assumption used in the Black-Scholes model represents the period of time that the options are expected to be outstanding and is estimated using the midpoint between the requisite service period and the contractual term of the option. The fair value of our Class A Common Stock is determined based on the quoted market price.
Under this approach, the expected term, which represents the period of time that the options are expected to be outstanding, is estimated using the midpoint between the requisite service period and the contractual term of the option. The fair value of our Class A Common Stock is determined based on the quoted market price.
General and administrative expense increased by $19.8 million, or 29%, to $87.3 million in 2023 as compared to $67.5 million in 2022. The year-over-year increase was due to higher personnel and other administrative costs, which is consistent with the ongoing growth of our business.
General and administrative expense increased by $19.6 million, or 22%, to $106.9 million in 2024 as compared to $87.3 million in 2023. The year-over-year increase was due to higher personnel and other administrative costs, which is consistent with the ongoing growth of our business.
While we have some data points of the effectiveness of our marketing and promotion activities, our limited operating history and the relative novelty of the U.S. online casino and sports betting industries make it difficult for us to predict when we will achieve our longer-term profitability objectives.
While we have some data points of the effectiveness of our marketing and promotion activities, our limited operating history and the relative novelty of the U.S. online casino and sports betting industries make it difficult for us to predict when we will achieve our longer-term profitability objectives. 69 Managing Wagering Risk The online casino and retail and online sports betting businesses are characterized by an element of chance.
Cash Flows The following table shows our cash flows from operating activities, investing activities and financing activities for the stated periods: Years Ended December 31, ($ in thousands) 2023 2022 2021 Net cash used in operating activities $ (5,932) $ (60,321) $ (48,186) Net cash used in investing activities (33,780) (28,990) (37,002) Net cash (used in) provided by financing activities (518) (1,216) 125,584 Effect of exchange rate changes on cash, cash equivalents and restricted cash 5,126 (3,721) (2,132) Net change in cash, cash equivalents and restricted cash $ (35,104) $ (94,248) $ 38,264 A discussion of changes in cash flows in 2023 compared to 2022 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) 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.
Gaming taxes, market access costs, payment processing costs, and operating expenses contributed $26.7 million, $9.6 million, $8.9 million and $2.1 million, respectively, to the year-over-year increase in costs of revenue, with personnel costs contributing to the remaining $3.1 million of the year-over-year increase.
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.
As of December 31, 2022, we had been issued $3.6 million in surety bonds 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. Debt As of December 31, 2023 and 2022, we had no outstanding debt or letters of credit.
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.
The increase was mainly due to additional costs to acquire property and equipment and other definite-lived intangible assets such as gaming licenses and internally developed software. Depreciation and amortization expense as a percentage of revenue increased to 4% in 2023 as compared to 2% in 2022. Interest Income (Expense), Net.
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.
Critical Accounting Estimates We have prepared our consolidated financial statements in accordance with GAAP. In doing so, management is required to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue and expenses during the reporting period.
These changes were due to fluctuations in foreign currency exchange rates (primarily the Colombian Peso) from period to period. Critical Accounting Estimates We have prepared our consolidated financial statements in accordance with GAAP. In doing so, management is required to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue and expenses during the reporting period.
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 $5.1 million for the 73 year ended December 31, 2023 as compared to a decrease of $3.7 million in 2022. These changes were due to fluctuations in foreign currency exchange rates from period to period.
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.
Comparison of the Years Ended December 31, 2022 and 2021 A discussion of changes in our results of operations in 2022 compared to 2021 has been omitted from this Form 10-K, but it may be found in “Item 7.
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.
Net cash used in operating activities was $5.9 million for the year ended December 31, 2023 as compared to $60.3 million used in operating activities for the year ended December 31, 2022.
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.
As of December 31, 2022, we had an outstanding letter of credit for $1.7 million in connection with our operations in Colombia for which no amounts had been drawn.
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.
We generate revenue primarily through the following offerings: Online Casino Online casino offerings typically include the full suite of games available in bricks-and-mortar casinos, such as table games (i.e., blackjack and roulette) and slot machines. For these offerings, similar to bricks-and-mortar casinos, we generate revenue through hold, or gross winnings, as customers play against the house.
We generate revenue primarily through the following offerings: Online Casino Online casino offerings typically include the full suite of games available in bricks-and-mortar casinos, such as table games (i.e., blackjack and roulette), slot machines and poker games.
Our online casino offering consists of a combination of licensed content from leading industry suppliers, customized third-party games and a small number of proprietary games that were developed exclusively for us.
Our experience has been that online casino revenue is less volatile than sports betting revenue. Our online casino offering consists of a combination of licensed content from leading industry suppliers, customized third-party games, our proprietary online poker platform and a small number of proprietary games that were developed exclusively for us.
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. 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.
This key metric represents our ability to drive usage and monetization of our online offerings. 63 The chart below presents our ARPMAU in the United States and Canada for the years ended December 31, 2023, 2022 and 2021: The year-over-year increase in ARPMAU in the United States and Canada for 2023 compared to 2022 was mainly due to our continued operations in markets that launched during 2022 where we offer online casino in addition to online sports betting, the impact of our strategic advertising and marketing efforts in other markets where we offer online casino and our focus on retaining quality players.
This 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.
The chart below presents our average MAUs in Latin America (including Mexico) for the years ended December 31, 2023, 2022 and 2021: The year-over-year increase in MAUs in Latin America for 2023 compared to 2022 was mainly due to our continued growth and strong customer retention rates in Colombia and Mexico, as well as it being the first full year of operations in Mexico.
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.
Income tax expense increased by $2.2 million, or 25%, to $11.2 million in 2023 as compared to $9.0 million in 2022. Income tax expense is attributable to the profitability of our foreign operations for which both current and deferred taxes are recorded. Income tax expense as a percentage of revenue remained flat at 2% in 2023 and 2022.
Income tax expense increased by $13.4 million, or 119%, to $24.6 million in 2024 as compared to $11.2 million in 2023. Income tax expense is attributable to the profitability of our foreign operations for which both current and deferred taxes are recorded.
We also provide social gaming (where permitted), where users can earn or purchase virtual credits to enjoy free-to-play games. Our revenue is predominantly generated from our U.S. and Canada operations, with the remaining revenue being generated from our Latin America (including Mexico) operations. See Note 3 to our consolidated financial statements, included elsewhere in this Annual Report.
Our revenue is predominantly generated from our U.S. and Canada operations, with the remaining revenue being generated from our Latin America (including Mexico) operations. See Note 3 to our consolidated financial statements, included elsewhere in this Annual Report.
From a legislative perspective, we continue to see strong momentum to legalize and regulate online sports betting in new jurisdictions in the Americas. As expected, many of these new jurisdictions are first trying to legalize and regulate online sports betting before considering whether to legalize and regulate online casino.
As expected, many of these new jurisdictions are first trying to legalize and regulate online sports betting before considering whether to legalize and regulate online casino.
Management also believes that Adjusted EBITDA is useful in evaluating our operating performance compared to that of other companies in our industry, as this metric generally eliminates the effects of certain items that may vary from company to company for reasons unrelated to overall operating performance. 65 The table below presents our Adjusted EBITDA reconciled from our Net loss, the most directly comparable GAAP measure, for the periods indicated: Years Ended December 31, ($ in thousands) 2023 2022 2021 Net loss $ (60,055) $ (134,332) $ (71,092) Interest (income) expense, net (2,765) 573 187 Income tax expense 11,209 8,961 4,688 Depreciation and amortization 29,759 14,325 4,245 Change in fair value of earnout interests liability — — 13,740 Change in fair value of warrant liabilities — — (41,802) Share-based compensation 30,020 18,691 24,912 Adjusted EBITDA $ 8,168 $ (91,782) $ (65,122) 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.
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.
General and administrative expense as a percentage of revenue increased to 13% in 2023 as compared to 11% in 2022. Depreciation and Amortization. Depreciation and amortization expense increased by $15.4 million, or 108%, to $29.7 million in 2023 as compared to $14.3 million in 2022.
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.
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, trademark, developed technology and content) 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, trademark, 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.
Costs of revenue as a percentage of revenue decreased to 67% in 2023 as compared to 70% in 2022. Advertising and Promotions. Advertising and promotions expense decreased by $59.8 million, or 27%, to $160.7 million in 2023 as compared to $220.5 million in 2022.
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.
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. 67 Key Components of Revenue and Expenses Revenue We currently offer real-money online casino, online sports betting and/or retail sports betting in 15 U.S. states, Colombia, Ontario, Canada and Mexico.
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.
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. Virtual credits have no monetary value and can only be used within our social gaming platform.
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.
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. 71 Liquidity and Capital Resources We measure liquidity in terms of our ability to fund the cash requirements of our business operations, including working capital and capital expenditure needs, contractual obligations and other commitments, with cash flows from operations.
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.
Through our B2B operations, we offer retail sports betting services to land-based businesses, such as bricks-and-mortar casinos, in exchange for a monthly commission.
Through our B2B operations, we primarily offer retail sports betting services to land-based businesses, such as bricks-and-mortar casinos, in exchange for a monthly commission. B2C and B2B products can be launched under one of our existing brands or customized to be incorporated into a local or third-party brand.
Although each bet generally performs within a defined statistical range of outcomes in the long run, actual outcomes may vary for any given period, particularly in the short term.
We use the hold percentage as an indicator of an online casino game or retail or online sports bet’s performance against its expected outcome. Although each bet generally performs within a defined statistical range of outcomes in the long run, actual outcomes may vary for any given period, particularly in the short term.
B2C and B2B products can be launched under one of our existing brands or customized to be incorporated into a local or third-party brand. 61 Often in advance of markets legalizing online gaming, we build relationships with local bricks-and-mortar casino operators and other potential land-based partners who are seeking online gaming and sports betting partners.
Often in advance of markets legalizing online gaming, we build relationships with local bricks-and-mortar casino operators and other potential land-based partners who are seeking online gaming and sports betting partners.
The increase in non-cash expenses was driven primarily by additional depreciation and amortization expense of $15.4 million, share-based compensation expense totaling $11.3 million and write-offs of long-lived assets totaling $0.7 million. Investing activities . Net cash used in investing activities during 2023 increased by $4.8 million to $33.8 million, as compared to $29.0 million during 2022.
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 .
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.
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.
Managing Wagering Risk The online casino and retail and online sports betting businesses are characterized by an element of chance. Accordingly, we employ theoretical win rates to estimate what a certain type of online casino wager or retail or online sports bet, on average, will win or lose in the long run.
Accordingly, we employ theoretical win rates to estimate what a certain type of online casino wager or retail or online sports bet, on average, will win or lose in the long run. Revenue is impacted by variations in the hold percentage (the ratio of our winnings to total amount bet) of our offerings.
The chart below presents our average MAUs in the United States and Canada for the years ended December 31, 2023, 2022 and 2021: The year-over-year increase in MAUs in the United States and Canada for 2023 compared to 2022 was mainly due to our continued growth and strong customer retention rates in existing markets.
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.
Additionally, we continue to achieve a positive response from our strategic advertising and marketing efforts. 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.
The increase reflects higher period-over-period online casino and sports betting revenue of $97.5 million, retail sports betting revenue of $1.1 million and social gaming revenue of $0.3 million. Costs of Revenue. Costs of revenue increased by $50.4 million, or 12%, to $465.0 million in 2023 as compared to $414.6 million in 2022.
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.
We launched our first social gaming website in 2015 and began accepting real-money bets in the United States in 2016.
We launched our first social gaming website in 2015 and began accepting real-money bets in the United States in 2016. Currently, we offer real-money online casino, online sports betting and/or retail sports betting in 16 U.S. states and four international markets as outlined in the table found in “ Business — Overview ”.
Interest income, net was $2.8 million for the year ended December 31, 2023 as compared to Interest expense, net of $0.6 million for the same period in 2022. The increase in interest income was mainly attributed to higher interest rates on cash and cash equivalents as compared to the same period in 2022. 70 Income tax expense .
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 .
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. Our experience has been that online casino revenue is less volatile than sports betting revenue.
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.
The decrease reflects a lower period-over-period net loss totaling $74.3 million and increased non-cash expenses of $27.3 million, which was partially offset by an increase in working capital totaling $45.8 million.
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 mainly due to and directly correlated with, our expansion and continued growth in existing and new markets.
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.

… 70 more changes not shown on this page.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

7 edited+0 added−1 removed3 unchanged
Biggest changeThis could result in our customers having less disposable income, and thus they may reduce their spending on discretionary entertainment activities such as our products and services. Such a reduction in spending by our customers could harm our business, financial condition, revenues and operating results. ITEM 8.
Biggest changeOur inability or failure to do so could harm our business, financial condition and operating results. In addition, our customers may experience inflationary pressures and rising costs. This could result in our customers having less disposable income, and thus they may reduce their spending on discretionary entertainment activities such as our products and services.
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, 2023. 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, 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.
Our 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, 2023 and 2022, respectively.
Our 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.
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, 2023, we had cash, cash equivalents and restricted cash of $171.0 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, 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.
FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA See financial statements included in Item 15 “ Exhibits, Financial Statement Schedules ” of this Annual Report. ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE None.
Such a reduction in spending by our customers could harm our business, financial condition, revenues and operating results. ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA See financial statements included in Item 15 “ Exhibits, Financial Statement Schedules ” of this Annual Report. ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE None.
Dollar would not have a material effect on our consolidated financial statements for the year ended December 31, 2023. 77 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, 2023.
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.
A 10% increase or decrease in the value of these currencies compared to the U.S.
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.
Removed
If our costs become subject to significant inflationary pressures, we may not be able to fully offset such higher costs through price increases. Our inability or failure to do so could harm our business, financial condition and operating results. In addition, our customers may experience inflationary pressures and rising costs.

Other RSI 10-K year-over-year comparisons