The price of Rush Street Interactive slid for a second day Tuesday after the BetRivers operator said a Colombian state of emergency led to an additional gaming tax.
The state of emergency was announced Jan. 24, followed by the 19% value-added tax on player deposits on Feb. 14. The presidential decree is automatically reviewed by the Constitutional Court of Colombia, which could still render the decree illegal.
Rush Street’s stock has felt the pinch since the 8K was filed Monday as 13.3% of the company’s revenue comes from Colombia. The stock fell more than 4% Monday from Friday’s closing price of $16.70, a height not seen since early 2022.
The stock for BetRivers’ parent continued to fall Tuesday as it closed down 3.3% to $15.50. Rush Street still has a week until it connects with investors and analysts on its year-end earnings call at 5 p.m. Feb. 26.
BetRivers parent considering options
Rush Street said the decree could last until the end of the year if found constitutional. That could decrease the demand for online casino games and sports betting since a VAT is a tax paid by the consumer.
No matter what, Rush Street is confident in its long-term prospects in Colombia:
“The Company will continue to analyze the potential effects of the Decree on its financial statements and operations. While the constitutionality, timing and impact of the Decree is unknown at this time, and any assessment of the impact to the Company of the various possible Decree scenarios remains speculative, the Company is actively anticipating certain actions that may, among other things, help reduce operating and marketing expenses to partially offset potential future impacts on the Company’s revenue.
“Management remains focused on creating long-term value for the Company’s stockholders, which includes continuing to grow its Colombian business. Despite the potential short-term challenges posed by the Decree, the Company believes that its operational expertise, experienced management team and local resources will enable it to continue to achieve long-term growth in Colombia and its other Latin American markets.”
RSI stock surged in 2024
Rush Street Interactive’s stock closed at $4.21 on the final trading day of 2023. The stock tumbled at the beginning of 2022 and lingered at those levels as management needed time to sell the story of a low-share yet profitable iGaming operator.
Through Friday, the stock price was up nearly 300% as the company reported strong quarterly results and international expansion throughout last year.
