Rush Street Interactive, Inc.

Previous wording

We provide our customers with an array of leading gaming offerings such as real-money online casino, online sports betting and retail sports betting (i.e., sports betting services provided at bricks-and-mortar locations), as well as social gaming, which involves free-to-play games using virtual credits that users can earn or purchase. We 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 four international markets as outlined in the table below.

Current wording

We provide our customers with an array of leading gaming offerings such as real-money online casino, online sports betting and retail sports betting (i.e., sports betting services provided at bricks-and-mortar locations), as well as social gaming, which involves free-to-play games using virtual credits that users can earn or purchase. We 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 the four international markets as outlined in the table below.

Previous wording

MAUs is the number of unique users per month who have placed at least one real-money bet across one or more of our online casino or online sports betting offerings. We average the MAUs for the months in the relevant period. We exclude users who have made a deposit but have not yet placed a real-money bet on at least one of our online offerings. We also exclude users who have placed a real-money bet but only with promotional incentives.

Current wording

MAUs is the number of unique users per month who have placed at least one real-money bet across one or more of our online casino, poker or online sports betting offerings. We average the MAUs for the months in the relevant period. We exclude users who have made a deposit but have not yet placed a real-money bet on at least one of our online offerings. We also exclude users who have placed a real-money bet but only with promotional incentives.

Previous wording

The chart below presents our average MAUs in the United States and Canada for the nine months ended September 30, 2024 and 2023:

Current wording

The chart below presents our average MAUs in the United States and Canada for the three months ended March 31, 2025 and 2024:

Previous wording

The increase in MAUs in the United States and Canada was mainly due to our continued growth and strong customer retention rates in existing markets and expansion into new markets such as Delaware, which was partially offset by our exit from the Connecticut market. Additionally, we continue to achieve a positive response from our strategic advertising and marketing efforts.

Current wording

The increase in MAUs in the United States and Canada was mainly due to our continued growth and strong customer retention rates in existing markets. Additionally, we continue to achieve a positive response from our strategic advertising and marketing efforts.

Previous wording

The chart below presents our average MAUs in Latin America (including Mexico) for the nine months ended September 30, 2024 and 2023:

Current wording

The chart below presents our average MAUs in Latin America (including Mexico) for the three months ended March 31, 2025 and 2024:

Previous wording

The increase in MAUs in Latin America was mainly due to our continued growth and strong customer retention rates in Colombia and Mexico. Additionally, we continue to achieve a positive response from our strategic advertising and marketing efforts.

Current wording

The increase in MAUs in Latin America was mainly due to our continued growth and strong customer retention rates in Colombia and Mexico and expansion into new markets such as Peru. Additionally, we continue to achieve a positive response from our strategic advertising and marketing efforts.

Previous wording

The chart below presents our ARPMAU in the United States and Canada for the nine months ended September 30, 2024 and 2023:

Current wording

The chart below presents our ARPMAU in the United States and Canada for the three months ended March 31, 2025 and 2024:

Previous wording

The year-over-year increase in ARPMAU in the United States and Canada was mainly due to our continued growth in markets that launched during 2023 where we offer online casino in addition to online sports betting, such as Delaware, the impact of our strategic advertising and marketing efforts in other markets where offer online casino and our focus on retaining quality players.

Current wording

The year-over-year increase in ARPMAU in the United States and Canada was mainly due to our continued growth in markets where we offer online casino in addition to online sports betting, the impact of our strategic advertising and marketing efforts in other markets where offer online casino, and our focus on retaining quality players.

Previous wording

The chart below presents our ARPMAU in Latin America (including Mexico) for the nine months ended September 30, 2024 and 2023:

Current wording

The chart below presents our ARPMAU in Latin America (including Mexico) for the three months ended March 31, 2025 and 2024:

Previous wording

We define Adjusted EBITDA as net income (loss) before interest income or expense, income taxes, depreciation and amortization, share-based compensation, adjustments for certain one-time or non-recurring items and other adjustments. Adjusted EBITDA excludes certain expenses that are required in accordance with GAAP because certain expenses are either non-cash (i.e., depreciation and amortization, share-based compensation) or are not related to our underlying business performance (i.e., interest income or expense).

Current wording

We define Adjusted EBITDA as net income (loss) before interest income or expense, income taxes, depreciation and amortization, share-based compensation, adjustments for certain one-time or non-recurring items and other adjustments. Adjusted EBITDA excludes certain expenses that are required in accordance with GAAP because certain expenses are either non-cash or are not related to our underlying business performance.

Previous wording

We currently offer real-money online casino, online sports betting and/or retail sports betting in 15 U.S. states, Colombia, Mexico, Ontario, Canada and Peru. We also provide social gaming (where permitted), where users can earn or purchase virtual credits to enjoy free-to-play games.

Current wording

We currently offer real-money online casino, online sports betting and/or retail sports betting in 16 U.S. states, Colombia, Ontario, Canada, Mexico and Peru. We also provide social gaming (where permitted), where users can earn or purchase virtual credits to enjoy free-to-play games.

Previous wording

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. Like bricks-and-mortar casinos, there is volatility with online casino, but as the number of bets placed increases, the net revenue retained from bets placed becomes easier to predict. Our experience has been that online casino revenue is less volatile than sports betting revenue.

Current wording

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. For these offerings (other than online poker), similar to bricks-and-mortar casinos, we generate revenue through hold, or gross winnings, as customers play against the house. For our poker game offerings, like land-based card rooms that are typically incorporated in land-based casinos, we are generally not exposed to the risks of game play or the outcome of the game as players are not playing against the house but are instead playing against each other on a peer-to-peer basis. We generate revenue through rake, or a small commission taken from the total wagers placed on the hand, which is generally subject to a cap, and through tournament entry fees. Like bricks-and-mortar casinos, there is volatility with online casino, but as the number of bets placed increases, the revenue retained from bets placed becomes easier to predict. Our experience has been that online casino revenue is less volatile than sports betting revenue.

Previous wording

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 in-house or at our direction exclusively for us. Third-party content is usually subject to standard revenue-sharing agreements specific to each supplier, where the supplier generally receives a percentage of the net gaming revenue generated from its casino games played on our platform. In exchange, we receive a limited license to offer the games on our platform to customers in permitted jurisdictions. 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.

Current wording

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. Third-party content is usually subject to standard revenue-sharing agreements specific to each supplier, where the supplier generally receives a percentage of the net gaming revenue generated from its casino games played on our platform. In exchange, we receive a limited license to offer the games on our platform to customers in permitted jurisdictions. 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.

Previous wording

Online sports betting involves a user placing a bet on the outcome of a sporting event, a sports-related activity or a series of the same, with the chance to win a pre-determined amount, often referred to as fixed odds. Online sports betting revenue is generated by setting odds such that there is a built-in theoretical margin in each sports bet offered to customers. While sporting event outcomes may result in revenue volatility, we believe that we can achieve a positive long-term betting win margin. In addition to traditional fixed-odds betting, we also offer other fixed-odd sports betting products including in-game betting and multi-sport and same-game parlay betting. We have also incorporated live streaming of certain sporting events into our online sports betting offering.

Current wording

Online sports betting involves a user placing a bet on the outcome of a sporting event, a sports-related activity or a series of the same, with the chance to win a pre-determined amount, often referred to as fixed odds. Online sports betting revenue is generated by setting odds such that there is a built-in theoretical margin in each sports bet offered to customers. While sporting event outcomes may result in revenue volatility, we believe that we can achieve a positive long-term betting win margin. In addition to traditional fixed-odds betting, we also offer other fixed-odd sports betting products including in-game betting and multi-sport and same-game parlay betting. We have also incorporated live streaming of certain sporting events into our online sports betting offering. Integrated into our online sports betting platform is a third-party risk and trading platform currently provided by certain subsidiaries of Kambi Group plc.

Previous wording

In addition, certain relationships with our partners provide us the ability to operate the retail sportsbook at the land-based partner’s facility. 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 changes in unsettled retail sports bets and unclaimed retail tickets for settled retail bets.

Current wording

In addition, certain relationships with our partners provide us the ability to operate the retail sportsbook at the land-based partner’s facility. 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 and unclaimed retail tickets for settled retail bets.

Previous wording

Costs of Revenue. 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. Other than salaries, bonuses, benefits and share-based compensation, these costs are primarily variable in nature and should typically correlate with the change in revenue. 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. Our platform and content fees are primarily driven by costs associated with third-party casino content, data and streaming, sports betting trading services and certain elements of our platform technology, such as geolocation and know-your-customer. Gaming taxes relate to state taxes that are determined on a jurisdiction-by-jurisdiction basis, or federal excise taxes that are determined based on a percentage of the total online sports and retail sports bets placed. We incur payment processing costs on customer deposits, withdrawals and occasionally chargebacks (i.e., when a payment processor contractually disallows customer deposits in the normal course of business).

Current wording

Costs of 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. 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. Our third-party platform and content fees are primarily driven by costs associated with third-party casino content, data and streaming, sports betting trading services and certain elements of our platform technology, such as geolocation and know-your-customer. Gaming taxes relate to state taxes that are determined on a jurisdiction-by-jurisdiction basis, or federal excise taxes that are determined based on a percentage of the total online sports and retail sports bets placed. We incur payment processing costs on customer deposits, withdrawals and occasionally chargebacks (i.e., when a payment processor contractually disallows customer deposits in the normal course of business).

Previous wording

Advertising and Promotions Costs. Advertising and promotions costs consist primarily of costs associated with marketing our offerings via different channels, promotional activities and related customer acquisition costs. These costs also include salaries, bonuses, benefits and share-based compensation for dedicated personnel and are expensed as incurred.

Current wording

Sales and Marketing Costs. Sales and marketing costs consist primarily of costs associated with marketing our offerings via different channels, promotional activities and related customer acquisition costs. These costs also include salaries, bonuses, benefits and share-based compensation for dedicated personnel and are expensed as incurred.

Previous wording

With respect to paid marketing, we use a broad array of advertising channels, including television, radio, social media platforms, sponsorships and ambassadorships, 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. These efforts are primarily concentrated within the specific jurisdictions where we operate or intend to operate. We believe there is a significant benefit in maintaining the flexibility to reallocate advertising spending across channels based on the latest marketing data, ensuring continuous alignment with our overall marketing strategy.

Current wording

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. These efforts are primarily concentrated within the specific jurisdictions where we operate or intend to operate. We believe there is significant benefit to having a flexible approach to advertising spending as we can quickly redirect our advertising spending based on dynamic testing of our advertising methods and channels.

Previous wording

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, software, rent and insurance costs.

Current wording

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, insurance costs, technology and foreign exchange gains or losses.

Previous wording

Depreciation and Amortization. Depreciation and amortization expense consists of depreciation on property and equipment and amortization of intangible assets (including market access licenses, gaming jurisdictional licenses, internally developed software, trademarks, developed technology, media content and customer lists) and finance lease right-of-use assets over their useful lives.

Current wording

Depreciation and Amortization. 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, developed technology, and other intangible assets) and finance lease right-of-use assets over their useful lives.

Previous wording

Revenue. Revenue increased by $172.6 million, or 35%, to $669.9 million for the nine months ended September 30, 2024 as compared to $497.3 million for the same period in 2023. The increase was mainly due to and directly correlated with our continued growth across existing markets and expansion into new market of Delaware, which launched after September 30, 2023. The increase reflects higher period-over-period online casino and sports betting revenue of $180.9 million and social gaming revenue of $0.1 million, which was partially offset by a decrease of retail sports betting revenue of $8.4 million due to the Company’s exit from the Connecticut market.

Current wording

Revenue. Revenue increased by $45.0 million, or 21%, to $262.4 million for the three months ended March 31, 2025 as compared to $217.4 million for the same period in 2024. The increase was mainly due to and directly correlated with our continued growth across existing markets and expansion into the new markets, such as Peru. The increase reflects higher period-over-period online casino and sports betting revenue and social gaming revenue of $45.3 million and $0.1 million, respectively, which was partly offset by a decrease in retail sports betting revenue of $0.4 million.

Previous wording

Costs of Revenue. Costs of revenue increased by $35.3 million, or 30%, to $151.4 million for the three months ended September 30, 2024 as compared to $116.2 million for the same period in 2023. The increase was mainly due to and directly correlated with our expansion and continued growth as noted above. Market access costs, gaming taxes, operating expenses, and payment processing costs contributed $17.0 million, $9.9 million, $4.5 million and $3.2 million, respectively, to the period-over-period increase in costs of revenue. Personnel costs contributed to the remainder of the period-over-period increase. Costs of revenue as a percentage of revenue decreased to 65% for the three months ended September 30, 2024 as compared to 68% for the same period in 2023.

Current wording

Costs of Revenue. Costs of revenue increased by $26.4 million, or 18%, to $170.9 million for the three months ended March 31, 2025 as compared to $144.5 million for the same period in 2024. The increase was mainly due to and directly correlated with our expansion and continued growth as noted above. Market access costs, gaming taxes, payment processing costs and operating expenses contributed $11.0 million, $8.6 million, $4.3 million and $2.3 million, respectively, to the period-over-period increase in costs of revenue. Personnel costs contributed to the remainder of the period-over-period increase. Costs of revenue as a percentage of revenue decreased to 65% for the three months ended March 31, 2025 as compared to 66% for the same period in 2024.

Previous wording

General and Administrative. General and administrative expense increased by $15.0 million, or 23%, to $79.6 million for the nine months ended September 30, 2024 as compared to $64.6 million for the same period in 2023. The increase was primarily due to higher personnel and other administrative costs, which is consistent with the ongoing growth of our business. General and administrative expense as a percentage of revenue decreased to 12% for the nine months ended September 30, 2024 as compared to 13% for the same period in 2023.

Current wording

General and Administrative. General and administrative expense decreased by $0.6 million, or 2%, to $25.3 million for the three months ended March 31, 2025 as compared to $25.9 million for the same period in 2024. The decrease was primarily due to lower share-based compensation expense and other administrative costs. General and administrative expense as a percentage of revenue decreased to 10% for the three months ended March 31, 2025 as compared to 12% for the same period in 2024.

Previous wording

Depreciation and Amortization. Depreciation and amortization expense increased by $1.0 million, or 4%, to $23.1 million for the nine months ended September 30, 2024 as compared to $22.1 million for the same period in 2023. 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% for the nine months ended September 30, 2024 as compared to 4% for the same period in 2023.

Current wording

Depreciation and Amortization. Depreciation and amortization expense increased by $2.4 million, or 34%, to $9.5 million for the three months ended March 31, 2025 as compared to $7.1 million for the same period in 2024. The increase was mainly due to additional costs to acquire internally developed software and other definite-lived intangible assets. Depreciation and amortization expense as a percentage of revenue increased to 4% for the three months ended March 31, 2025 as compared to 3% for the same period in 2024.

Previous wording

Interest Income, Net. Interest income increased by $1.3 million, or 169%, to $2.0 million for the three months ended September 30, 2024 as compared to $0.8 million for the same period 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.

Current wording

Interest Income, Net. Interest income, net, increased by $0.1 million, or 9%, to $1.7 million for the three months ended March 31, 2025 as compared to $1.6 million for the same period in 2024. The increase in interest income was mainly attributed to higher amounts of cash held in interest-bearing accounts and money market funds as compared to the same period in 2024.

Previous wording

Income Tax Expense. Income tax expense increased by $2.8 million, or 117%, to $5.3 million for the three months ended September 30, 2024 as compared to $2.4 million for the same period in 2023. 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 increased to 2% for the three months ended September 30, 2024 as compared to 1% for the same period in 2023.

Current wording

Income Tax Expense. Income tax expense decreased by $0.2 million, or (4)%, to $5.1 million for the three months ended March 31, 2025 as compared to $5.3 million for the same period in 2024. 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% for the three months ended March 31, 2025 and 2024.

Previous wording

Our results of operations may, and generally do, fluctuate due to seasonal trends and other factors such as level of customer engagement, online casino and sports betting results and other factors that are outside of our control or that we cannot reasonably predict. Our quarterly financial performance depends on our ability to attract and retain customers. 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 more broadly), weather conditions, public sentiment, an economic downturn or other economic factors such as inflation, economic uncertainty or macroeconomic conditions. As customer engagement varies, so may our quarterly financial performance.

Current wording

Our results of operations may, and generally do, fluctuate due to seasonal trends and other factors such as level of customer engagement, online casino and sports betting results and other factors that are outside of our control or that we cannot reasonably predict. Our quarterly financial performance depends on our ability to attract and retain customers. 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. As customer engagement varies, so may our quarterly financial performance.

Previous wording

Our quarterly financial results may also be impacted by the number and amount of betting losses and jackpot payouts we experience. Although our losses are limited per wager to a maximum payout, when looking at bets across a period of time, these losses can be significant. We offer progressive jackpot games in certain of our online casino offerings. Each time a customer plays a progressive jackpot game, we contribute a portion of the amount bet to the jackpot for that game or group of games. When a progressive jackpot is won, it is paid out and reset to a predetermined base amount. Winning the jackpot is determined by a random mechanism; we cannot foresee when a jackpot will be won, and we do not insure against jackpot payouts. Paying the progressive jackpot decreases our cash position.

Current wording

Our quarterly financial results may also be impacted by the number and amount of betting losses and jackpot payouts we experience. Although our losses are limited per wager to a maximum payout, when looking at bets across a period of time, these losses can be significant. We offer progressive jackpot games in our online casino offerings. Each time a customer plays a progressive jackpot game, we contribute a portion of the amount bet to the jackpot for that game or group of games. When a progressive jackpot is won, it is paid out and reset to a predetermined base amount. Winning the jackpot is determined by a random mechanism; we cannot foresee when a jackpot will be won, and we do not insure against jackpot payouts. Paying the progressive jackpot decreases our cash position.

Previous wording

Our online sports betting and retail sports betting operations experience seasonality based on the relative popularity and frequency of certain sporting events. Although sporting events occur throughout the year, our online sports betting customers are most active during the NFL, NBA, and college football and basketball seasons. With respect to our online sports betting and retail sports betting operations, customer activity tends to increase, and we may experience increased volatility, in connection with major sporting events such as the NFL super bowl, the NBA finals and NCAA basketball March Madness. In addition, sports betting activity is impacted by the occurrence of periodic events (e.g., COPA America, UEFA, Olympics).

Current wording

Our online sports betting and retail sports betting operations experience seasonality based on the relative popularity and frequency of certain sporting events. Although sporting events occur throughout the year, our online sports betting customers are most active during the NFL, NBA, college football and basketball seasons. With respect to our online sports betting and retail sports betting operations, customer activity tends to increase, and we may experience increased volatility, in connection with major sporting events such as the NFL super bowl, the NBA finals and NCAA basketball March Madness. In addition, sports betting activity is impacted by the occurrence of periodic events (e.g., Copa América, UEFA, Olympics).

Previous wording

From a legislative perspective, we continue to see 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. However, given the tax generation success of online casino in markets where it has been legalized, we also continue to see momentum for online casino in several jurisdictions in the Americas that are looking for additional revenue sources to fund governmental budgets. Additionally, we have seen governmental officials or legislative or regulatory bodies in certain jurisdictions in which we operate consider, and in limited cases to date, approve, increases in gaming-related taxes or other types of taxes on companies operating in the gaming industry. While it is unclear at this time if this will continue, any proposed legislation or other similar actions to increase existing taxes on online sportsbook and/or casino could negatively impact our business, profitability and cash flows.

Current wording

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. However, given the tax generation success of online casino in markets where it has been legalized, we also continue to see strong momentum for online casino in several jurisdictions in the Americas that are looking for additional revenue sources to fund expanding budgets. Additionally, we have seen governmental officials or legislative or regulatory bodies in certain jurisdictions in which we operate consider, and in limited cases to date, approve, increases in gaming-related taxes or other types of taxes on companies operating in the gaming industry. While it is unclear at this time if this will continue, any proposed legislation or other similar actions to increase existing taxes on online sportsbook and/or casino could negatively impact our business, profitability and cash flows.

Previous wording

We had $216.3 million in cash and cash equivalents as of September 30, 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.

Current wording

We had $228.2 million in cash and cash equivalents as of March 31, 2025 (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.

Previous wording

In connection with the Business Combination, we executed the TRA, which generally provides that the Special Limited Partner pay an amount equal to 85% of certain net tax benefits, if any, that the Company and its consolidated subsidiaries, including the Special Limited Partner, realize (or in certain cases is deemed to realize) as a result of the increases in tax basis and tax benefits related to the transactions contemplated under the Business Combination Agreement and the exchange of certain common units in RSILP retained by the Sellers for Class A Common Stock (or cash) and tax benefits related to entering into the TRA, including tax benefits attributable to payments under the TRA. Although the actual timing and amount of any payments made under the TRA will vary, such payments may be significant. Any payments made under the TRA will generally reduce the amount of overall cash flow that might have otherwise been available to us and, to the extent that payments required under the TRA are unable to be made for any reason, the unpaid amounts generally will be deferred and will accrue interest until paid. 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.

Current wording

In connection with the Business Combination, we executed the TRA, which generally provides that the Special Limited Partner pay an amount equal to 85% of certain net tax benefits, if any, that the Company and its consolidated subsidiaries, including the Special Limited Partner, realize (or in certain cases is deemed to realize) as a result of the increases in tax basis and tax benefits related to the transactions contemplated under the Business Combination Agreement and the exchange of Retained RSILP Units for Class A Common Stock (or cash) and tax benefits related to entering into the TRA, including tax benefits attributable to payments under the TRA. Although the actual timing and amount of any payments made under the TRA will vary, such payments may be significant. Any payments made under the TRA will generally reduce the amount of overall cash flow that might have otherwise been available to us and, to the extent that payments required under the TRA are unable to be made for any reason, the unpaid amounts generally will be deferred and will accrue interest until paid. To date, no material payments under the TRA have been made, and no material payments thereunder are expected in the next twelve months as payments under the TRA are not owed until the tax benefits generated thereunder are more-likely-than-not to be realized. Significant payments under the TRA may be required upon tax benefits becoming more-likely-than-not to be realized.

Previous wording

We expect our existing cash and cash equivalents and cash flows from operations to be sufficient to fund our operating activities and capital expenditure requirements for at least the next 12 months and thereafter for the foreseeable future. It is possible that we may need additional cash resources due to changed business conditions or other developments, including unanticipated regulatory developments, significant acquisitions, partnerships or marketing initiatives, expansions in new or existing markets, deteriorating macroeconomic conditions and competitive pressures. We expect our capital expenditures and working capital requirements to continue to increase in the immediate future to support our growth as we seek to expand our offerings across more of North America, Latin America and worldwide, which will require significant investment in our online gaming platform and our personnel, in particular in product development, engineering and operations roles. We also expect certain costs such as marketing, market access and license fees to increase as we continue to pursue expansion opportunities in new and existing jurisdictions. In particular, we are party to several non-cancelable contracts with vendors and licensors for marketing and other strategic partnerships, pursuant to which we are obligated to make future minimum payments under the non-cancelable terms of these contracts. To the extent that our current resources are insufficient to satisfy our cash requirements, we may need to seek additional equity or debt financing. If the needed financing is not available, or if the terms of financing are less desirable than we expect, we may be forced to decrease our level of investment in new product, service or market launches and related marketing initiatives or to scale back our existing operations, which could have an adverse impact on our business and financial prospects.

Current wording

We expect our existing cash and cash equivalents and cash flows from operations to be sufficient to fund our operating activities and capital expenditure requirements for at least the next 12 months and thereafter for the foreseeable future. It is possible that we may need additional cash resources due to changed business conditions or other developments, including unanticipated regulatory developments, significant acquisitions, partnerships or marketing initiatives, deteriorating macroeconomic conditions and competitive pressures. We expect our capital expenditures and working capital requirements to continue to increase in the immediate future to support our growth as we seek to expand our offerings across more of North America, Latin America and worldwide, which will require significant investment in our online gaming platform and our personnel, in particular in product development, engineering and operations roles. 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. In particular, we are party to several non-cancelable contracts with vendors and licensors for marketing and other strategic partnerships, pursuant to which we are obligated to make future minimum payments under the non-cancelable terms of these contracts. Additionally, our continued profitability will trigger future quarterly tax distribution obligations payable to the limited partners of RSILP under the RSILP Amended and Restated Limited Partnership Agreement, To the extent that our current resources are insufficient to satisfy our cash requirements, we may need to seek additional equity or debt financing. If the needed financing is not available, or if the terms of financing are less desirable than we expect, we may be forced to decrease our level of investment in new product, service or market launches and related marketing initiatives or to scale back our existing operations, which could have an adverse impact on our business and financial prospects.

Previous wording

We expect our material cash requirements during the upcoming 12-month period to include $6.7 million of non-cancellable purchase obligations with marketing vendors, $3.0 million of license and market access fees, and $2.6 million of lease payments. In addition, we will continue to pursue expansion into new markets, which is expected to require significant capital investments. We have $43.5 million of additional non-cancellable purchase obligations including arrangements with marketing vendors, obligations for license and market access fees, and lease payments subsequent to the upcoming 12-month period. See Note 12 to our unaudited condensed consolidated financial statements included elsewhere in this Report. 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.

Current wording

We expect our material cash requirements during the upcoming 12-month period to include $11.2 million of non-cancellable purchase obligations with marketing vendors, $4.3 million of license and market access fees, and $2.4 million of lease payments. In addition, we will continue to pursue expansion into new markets, which is expected to require significant capital investments. We have $36.2 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 13 to our unaudited condensed consolidated financial statements included elsewhere in this Report. 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.

Previous wording

We had been issued $31.2 million and $28.0 million in surety bonds as of September 30, 2024 and December 31, 2023, respectively, that are used to satisfy regulatory requirements related to securing cash held for the benefit of customers.

Current wording

We had been issued $31.1 million in surety bonds as of March 31, 2025 and December 31, 2024 that are used to satisfy regulatory requirements related to securing cash held for the benefit of customers.

Previous wording

We had been issued $6.3 million and $4.6 million in surety bonds as of September 30, 2024 and December 31, 2023, respectively, to satisfy regulatory requirements necessary to operate in certain jurisdictions.

Current wording

We had been issued $6.3 million and $6.1 million in surety bonds as of March 31, 2025 and December 31, 2024, respectively, to satisfy regulatory requirements necessary to operate in certain jurisdictions.

Previous wording

As of September 30, 2024 and December 31, 2023, we had no outstanding debt. As of September 30, 2024 and December 31, 2023, we had an outstanding letter of credit for $4.6 million and $3.1 million, respectively, in connection with our operations in Colombia, for which no amounts had been drawn.

Current wording

As of March 31, 2025 and December 31, 2024, we had no outstanding debt. As of March 31, 2025 and December 31, 2024, we had an outstanding letter of credit for $4.6 million and $4.3 million, respectively, in connection with our operations in Colombia, for which no amounts had been drawn.

Previous wording

The following table shows our cash flows from operating activities, investing activities and financing activities for the nine months ended September 30, 2024 and 2023:

Current wording

The following table shows our cash flows from operating activities, investing activities and financing activities for the three months ended March 31, 2025 and 2024:

Previous wording

Operating activities. Net cash provided by operating activities was $80.6 million for the nine months ended September 30, 2024 as compared to $6.8 million used in operating activities during the same period in 2023. The increased provision of cash reflects a higher period-over-period net income totaling $55.3 million, increased non-cash expenses of $4.7 million and an increase of $27.2 million due to the change in working capital. The increase in non-cash expenses was driven primarily by additional share-based compensation expense totaling $4.0 million, depreciation and amortization totaling $1.0 million, deferred income taxes of $0.2 million, and noncash lease expense of $0.2 million, which was partially offset by fewer write-offs of long-lived assets of $0.7 million.

Current wording

Operating activities. Net cash provided by operating activities for the three months ended March 31, 2025 decreased by $2.2 million to $28.7 million, as compared to $30.9 million during the same period in 2024. The decrease was primarily brought by changes in operating assets and liabilities of $18.8 million, which was partially offset by higher period-over-period net income totaling $13.4 million and increased non-cash expenses of $3.6 million. The increase in non-cash expenses was driven primarily by additional depreciation and amortization, and share-based compensation expense totaling $2.4 million and $0.4 million, respectively which was partially offset by lower deferred income tax benefit of $0.8 million,

Previous wording

Investing activities. Net cash used in investing activities for the nine months ended September 30, 2024 increased by $0.2 million to $26.2 million, as compared to $26.0 million during the same period in 2023. The increase reflects higher short-term investment of $1.9 million, internally developed software costs totaling $1.2 million, and acquisition of other intangibles totaling $1.1 million. This was partially offset by lower period-over-period cash paid for acquisition of gaming licenses totaling $3.2 million, investment in equity totaling $0.5 million, and purchases of property and equipment totaling $0.3 million.

Current wording

Investing activities. Net cash used in investing activities for the three months ended March 31, 2025 increased by $0.1 million to $7.5 million, as compared to $7.4 million during the same period in 2024. The increase reflects higher acquisition of internally developed software costs totaling $0.5 million and acquisition of developed technology totaling $0.2 million. This was partially offset by lower period-over-period cash paid for acquisition of gaming licenses totaling $0.4 million, purchases of property and equipment totaling $0.1 million and short-term investment totaling $0.1 million.