Online casino and sports betting company Rush Street Interactive (NYSE: RSI) fell short of the market’s revenue expectations in Q3 2026, but sales rose 38.8% year on year to $385.9 million. On the other hand, the company’s outlook for the full year was close to analysts’ estimates with revenue guided to $1.58 billion at the midpoint. Its non-GAAP profit of $0.15 per share was 12.1% above analysts’ consensus estimates.
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Rush Street Interactive (RSI) Q3 2026 highlights:
- Revenue $385.9 million vs S&P analysts’ estimates of $388.6 million (38.8% year-on-year growth, 0.7% miss)
- Adjusted EPS $0.15 vs S&P analysts’ estimates of $0.13 (12.1% beat)
- Adjusted EBITDA $62.22 million vs analyst estimates of $54.67 million (16.1% margin, 13.8% beat)
- Revenue guidance The company reconfirmed its revenue guidance for the full year of $1.58 billion at the midpoint
- EBITDA guidance $255 million at the midpoint for the full year, in line with analyst expectations
- Operating margin 11.1%, up from 7% in the same quarter last year
- Market capitalization $1.75 billion
StockStory’s take
Rush Street Interactive’s third quarter results were shaped by continued growth in its online casino segment and ongoing strength in Latin America, but the company missed Wall Street’s revenue expectations. Management highlighted that a measured pace of growth in the North American market, along with competitive intensity—especially in Michigan—led to industry-wide moderation. CEO Richard Schwartz credited the casino-first strategy and effective marketing in Latin America for record player engagement, noting, “Online casino remains the foundation of our business model, and it was once again the core driver of growth and profitability this quarter.”
Looking ahead, management reiterated its focus on operational discipline and strategic marketing investments to drive both revenue and margin expansion. The company is closely watching legislative opportunities for online casino legalization in additional U.S. states and expects marketing efficiency and player acquisition to remain key factors. CFO Kyle Sauers stated, “We will continue to adjust and move up that spend if we see opportunities or if the paybacks aren’t as good,” while also emphasizing the importance of monitoring regulatory shifts in both North and Latin American markets.
Key insights from management’s remarks
Management attributed the quarter’s growth to the casino-first product mix, targeted marketing in Latin America, and robust player acquisition across its core regions.
- Casino-first strategy: Online casino accounted for 75% of revenue, with management describing it as the primary growth and profitability driver. This focus delivers higher player retention and engagement, which underpin steady revenue expansion.
- Latin America momentum: The region delivered over 200% year-over-year growth, with Colombia, Mexico, and Peru performing strongly. Executives pointed to the World Cup as a catalyst for player acquisition and increased cross-sell to casino products.
- Marketing efficiency: The company increased marketing spend by 44% year-over-year, capitalizing on low acquisition costs and attractive payback periods. Management stressed that current marketing investments are yielding substantial new player growth without compromising profitability.
- Alberta launch update: The recent entry into Alberta showed first-time depositors and daily active users tracking more than twice the levels of Ontario’s launch at a comparable point. Management views Alberta as a gradual, long-term build but expects it to be a meaningful contributor over time.
- Competitive and regulatory landscape: In North America, management cited a more competitive environment, particularly in Michigan, leading to broader industry growth moderation. They also underscored the absence of new gaming taxes in Colombia’s 2027 budget as a positive for Latin American margins.
Drivers of future performance
Management expects future performance to be driven by continued marketing discipline, online casino growth, and the potential for online casino legalization in new U.S. states.
- Marketing and player acquisition: The company will adapt marketing spend dynamically based on acquisition costs and expected player value, aiming for operating leverage as markets mature. Management expects future growth to come more from increasing player counts than rising average revenue per user in North America.
- Regulatory opportunities and risks: Management is actively monitoring legalization efforts in U.S. states such as Virginia, Ohio, D.C., Indiana, Illinois, and New York, citing fiscal pressures as a key catalyst. They believe new state openings could meaningfully expand addressable market size, though legislative outcomes remain uncertain.
- Margin expansion and product development: The company expects to drive further margin expansion through continued focus on higher-margin products and efficiency gains. Investments in proprietary in-house game development are expected to differentiate the offering and support long-term profitability.
Catalysts in upcoming quarters
In upcoming quarters, the StockStory team will be monitoring (1) progress on player acquisition and retention in new and existing markets, especially Alberta and Latin America; (2) the pace of online casino legalization efforts across key U.S. states; and (3) the company’s ability to achieve further margin expansion through product differentiation and marketing leverage. Shifts in regulatory or competitive dynamics will also remain important markers of execution.
Rush Street Interactive currently trades at $14.37, down from $15.13 just before the earnings. Is the company at an inflection point that warrants a buy or sell? The answer lies in our full research report (it’s free).
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