Rush Street Interactive Stock Rallies as Colombia Concerns Abate

• The stock slumped last Friday on fears regarding a Colombian tax plan
• It rebounded somewhat Monday as confusion waned

Rush Street Interactive (NYSE: RSI) is one of Monday’s gaming stock standouts amid a relief rally following a significant pullback last Friday.

In midday trading on Monday, shares of the Illinois-based online sportsbook and internet casino operator are higher by more than 7% on volume that appears poised to exceed the daily average, marking a fair recovery following a 15% tumble last Friday. That slide was attributed to confusion over Colombia’s value added tax (VAT) scheme pertaining to online wagering and what some market participants are describing as unusual options activity in the gaming stock. Benchmark analyst Mike Hickey argued the October 17 sell-off wasn’t an indictment of Rush Street Interactive’s solid fundamentals.

Because the tax is already being collected under an emergency decree, it is currently reflected in results, and consensus does not include a benefit from its removal,” wrote Hickey in a note to clients.

He reiterated a “buy” rating and $24 price target on the gaming stock, implying upside of nearly 33% from current levels.

Tax Likely Priced Into Rush Street Interactive Stock

Up 34.11% year to date, RSI is one of the best-performing online gaming stocks, indicating headwinds from the Colombian tax scheme are largely factored into the share price.

That implies some possibility that the VAT will disappear, perhaps as soon as 2026, but Hickey points out that last Friday’s price action in RSI stock indicates some market participants aren’t banking on the operator receiving a $30 million adjusted earnings before interest, taxes, depreciation, and amortization (AEBITDA) boost should the tax expire.

The Benchmark analyst argues RSI investors may want to take a different perspective because the Colombian tax plan is set to expire, it’s widely opposed by a slew of policymakers there, and it’s just a small component in the government’s broader revenue-raising efforts.

LatAm Important in Rush Street Interactive Stock Equation

In the US, RSI doesn’t operate in as many state as do DraftKings and FanDuel, but it has a strong foothold in Latin America — a region where online sports betting and other forms of wagering are rapidly growing.

Rush Street Interactive was the first US-based operator to establish itself in Mexico — Latin America’s second-largest economy — and the RushBet brand is now among the leaders by market share in Colombia.