RSI 10-K & 10-Q changes, risk factors and insider trading

•The Tax Receivable Agreement (the “Tax Receivable Agreement” or “TRA”), requires the Special Limited Partner to pay to the Sellers (as defined below) and/or the exchanging holders of RSILP Units,Units (as defined below), as applicable, 85% of the net income tax savings that we and our consolidated subsidiaries (including the Special Limited Partner) realize as a result of increases in tax basis in RSILP’s assets related to the transactions contemplated under the Business Combination Agreement and the future exchange of the Retained RSILP Units (as defined below) (for shares of Class A Common Stock (as defined below) (or cash) pursuant to the RSILP A&R LPA and tax benefits related to entering into the TRA, including tax benefits attributable to payments under the TRA, and those payments may be substantial.

We operate in the global gaming and entertainment industries, where competition is intense. We compete against other providers of online or retail sports betting and online or bricks-and-mortar casino, which includes operators of sweepstakes casinos/sportsbooks, charitable gaming, video gaming terminals, crypto casinos, prediction markets, illegal gambling operations, skill games and fantasy sports, as well as against providers of online and mobile entertainment and leisure products more generally. Recently, certain companies regulated by the Commodity Futures Trading Commission have begun offering “events contracts” on certain sporting events. These companies are generally subject to different regulatory and tax frameworks than us, which could result in a competitive advantage for them. Our customers face a vast array of entertainment choices. Other forms of entertainment, such as television, movies, digital streaming and on-demand services (which continue to gain popularity), social media, video games, sporting events and in-person casinos, are more well established and our customers may view them as offering greater variety, affordability, interactivity and enjoyment. We compete with these other forms of entertainment for the discretionary time and income of our customers. If we are unable to sustain sufficient interest in our online and retail offerings in comparison to other forms of entertainment, including new forms of entertainment, our business, financial condition, results of operations and prospects could be adversely affected.

Our current and potential domestic and international competitors range from large and established companies to emerging start-ups. Some competitors have longer operating histories and well-established relationships in various sectors. They can use their experience and resources in ways that could affect our competitive position, including by making acquisitions, continuing to invest heavily in research and development and in talent, adopting more aggressive pricing, bonusing or promotions, aggressively initiating intellectual property claims (whether or not meritorious), and continuing to compete aggressively for customers, potential partners, marketing opportunities and content providers. Our competitors may also be able to innovate and provide products and services faster than we can, may foresee the need for products and services before us and may be able to leverage their brands and partnerships in ways that we currently cannot. In addition, there has been consolidation among competitors in the entertainment and gaming industries and such current or future consolidation could result in larger competitors with increased financial resources and altered cost structures, which may enable them to offer more competitive products, gain a larger market share, expand offerings and broaden their geographic scope of operations. “Grey market” operations, which are gaming operations in jurisdictions with unclear laws or regulations regarding gambling (or no such laws exist), present a significant risk to our business. Grey market operators may operate outside of the strict regulatory and licensing requirements we adhere to, allowing them to avoid compliance costs and restrictions, licensing requirements, customer-focused safeguards and payment of gaming taxes, creating an uneven playing field and potentially putting customers at higher risk of gambling-related and other harms. These grey market operators may be able to offer more aggressive promotions, reduced pricing or expanded offerings, drawing customers away from our platform. 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. For example, as competition increases, we may need to lower our margins in order to attract or retain customers. Further, as we expand to become a more national brand, we may need to increase our marketing spending to compete more effectively.

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. 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 orand macroeconomic conditions.

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. WeAdditionally, we offer progressive jackpot games in our online casino offerings.games. 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. As 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 and depending upon the jackpot size it may have a significant negative affect on our cash flow and financial condition.

Our sports betting operations experience seasonality based on the relative popularity of certain sporting events. Although sporting events occur throughout the year, our sports betting customers are most active during the NFL, NBA, college football and basketball seasons. In addition, the shortening, delay, relocation or cancellation of major sports seasons or events due to events beyond our control such as weather conditions or disasters like the dangerous temperatures in January 2024 that resulted in the NFL’s Buffalo Bills versus the Pittsburgh Steelers being rescheduled or the wild fires in Los Angeles, which resulted in the Los Angeles Rams versus the Minnesota Vikings being relocated to Arizona,Arizona and several NBA and NHL games being rescheduled due to the wildfires to ensure fan and player safety, or the Minnesota Timberwolves versus the Golden State Warriors game being postponed due to local protests and safety concerns, may result in less money bet on sports and prevent us from garnering sufficient interest in our sports betting offerings, which could adversely impact our financial results.

We depend on certain key personnel to manage and operate our business, including both our Executive ChairmanChairman, CEO and ourPresident CEO.and CFO. Our current executive team’s leadership has been a critical element of our success and the departure, death or disability of any of our executive team or other extended or permanent loss of any of their services, or any negative market or industry perception with respect to any of them or their loss, could have a material adverse effect on our business.

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. To retain employees, we also may need to increase our employee compensation levels in response to competition. We use equity awards to attract and retain key personnel. If the value of our Class A common stock, $0.0001 par value per share (the “Class A Common Stock”) declines significantly and remains depressed, that may inhibit our efforts to recruit and retain key personnel. Our ability to attract, retain and motivate our personnel may also be adversely affected by stock price volatility. We cannot provide assurance that we will be able to attract or retain such highly qualified personnel in the future without adjusting other components of the compensation package.

Most of our executive officers and key employees are employees at-will. The unexpected loss of services of one or more of these key employees or failure to manage executive or key employee succession successfully, could have a material adverse effect on our business, financial condition, results of operations and prospects. In addition, losing employees or being unable to hire necessary skilled employees could result in significant disruptions to our business, and integrating replacement personnel could be time-consuming, expensive and cause additional disruptions to our business. If we fail to attract, hire and integrate qualified personnel, or retain and motivate existing personnel, we may be unable to grow effectively and our business, financial condition, results of operations and prospects could be adversely affected.

Our sports betting offerings allow our customers to bet across thousands of sports and sports-related events. The odds for such events are set through a combination of algorithmic and manual odds-making, with bet acceptance also being a combination of automatic and manual acceptance. At times, the odds offered for, or the information about, an event in our offerings are incorrect. 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 as well asliabilities, potential regulatory fines and reputational damage. When such errors occur, it is currently commonly accepted in nearly all jurisdictions for operators to void bets associated with such clear errors. In mature jurisdictions, bets based upon clear error can be voided without prior regulatory approval. However, there can be no guarantee that this practice of voiding bets practice will continue. If regulators were to disallow voiding of bets associated with clear errors, we could be forced to incur significant liabilities associated with such errors.

The online casino and sports betting businesses are characterized by an element of chance. We employ theoretical win rates to estimate what a certain type of online casino or 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. We use hold percentage as an indicator of a 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. The element of chance may affect win rates (hold percentages); these win rates, particularly for sports betting, may also be affected in the short term by factors largely beyond our control,control such aslike unanticipated event outcomes, a customer’s skill, experience and behavior, the mix of games played or bets placed, customer financial resources, the volume of bets placed and the amount of time spent gambling. For online casino games, a random number generator outcome or game could malfunction and award errant prizes. For sports betting, erroneous or incorrect odds could be posted that are highly favorable to bettors and bets are placed and/or winnings are paid before the odds are corrected. Additionally, odds compilers and risk managers are capable of human error, so even if our betting offerings are subject to a capped payout, significant volatility can occur. As a result of the variability in these factors, the actual win rates on our online casino games and sports bets may differ from the theoretical win rates we have estimated and could result in our customers’ winnings exceeding those anticipated. The variability of win rates could also adversely affect our business, financial condition, results of operations, prospects and cash flows.

Successful exploitation of our or certain of our vendors’ systems could harm our reputation and negatively affect our offerings and customer experience. Failure to discover such fraud or cheating in a timely manner could harm our operations.operations, Negativeand 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. If we were to experience any such issues, substantial engineering, marketing and management resources may be diverted from other projects to correct these issues, which may delay other projects and the achievement of our strategic objectives.

We believe that maintaining, developing,developing and enhancing our brand is critical to achieving widespread acceptance of our platform and products, attracting new customers, retaining existing customers, persuading existing customers to adopt additional productsproducts, and,and hiring and retaining our employees. We believe that the importance of our brand will increase as our awareness and business continue to expand. Successful promotion of our brand will depend on a number of factors, including the effectiveness of our marketing efforts, our thought leadership, our ability to provide a high-quality, reliablehigh-quality and cost-effectivereliable platform, the actions of our employees, executives, and board members, the perceived value of our platform and products, and our ability to provide quality customer success and support experience. 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. Negative publicity, whether or not justified, can spread rapidly through social media. To the extent that we are unable to respond timely and appropriately to negative publicity, our reputation and brand could be harmed. Moreover, even if we are able to respond in a timely and appropriate manner, we cannot predict how negative publicity may affect our reputation and business. We and our employees also use social media to communicate externally. There is risk that the use of social media by us, ourbrand ambassadors, employees, executives, or board members to communicate about our business or other matters may give rise to liability, damage our brand, or result in public exposure of personal data of our employees or customers, each of which could affect our revenue, business, results of operations and financial condition.

Our ability to effectively market is critical to our success. 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. Our marketing spend is based on a return-on-investment model that considers a variety of factors, including the product offerings in the jurisdiction, 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, out-of-home (i.e., billboards, stadium signage), 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. These efforts are concentrated within the specific jurisdictions where we operate or intend to operate.operate to the extent possible.

In some regions and for some brands or products we may rely extensively on independent third-party marketers, known as “affiliates” marketers. “Affiliates” is an industry term that describes independent third parties which assist us in acquiring new customers and which are generally paid on a revenue-share or cost-per-acquisition basis. Despite the word “affiliate”, these are independent parties that are not otherwise affiliated with us. NotwithstandingDespite thatthat, in some jurisdictions for license purposes we are deemed to control these “affiliates” marketers, their actions in the marketing of our brands are not directly within our control and hence actions, errors, omissions or intentional malfeasance on their part may cause damage to our brands, our business, our prospects and our financial results before we are able to detect such actions, errors, omissions or intentional malfeasance and/or do anything to mitigate the effects thereof. In particular, we can be held accountable by regulatory authorities for actions by such third parties in contravention of our license in a given jurisdiction, which in turn may lead to fines, license suspension, loss of license or other censure, which may in turn harm our business, our prospects and/or our financial performance. 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. Such third-party “affiliates” are under no obligation to continue introducing customers to us, but we may be obliged to continue to pay them future revenue shares where applicable nonetheless. Our lack of control over such marketers also means that if, for whatever reason, their effectiveness or ability to introduce us to new customers deteriorates then we may have no ability to mitigate or reverse the loss of new customers from this channel. Such marketers may also in certain circumstances have some degree of ongoing influence over the customers that they introduce to us, and hence may be able to subsequently entice such customers away from our brands if they choose to do so.

Our customers primarily access our online sports betting and online casino offerings through our app on their mobile devices, and we believeexpect that this will continue going forward. To enable our customers to use our offerings through our app on their mobile devices, our app must be compatible with the major mobile operating systems such as iOS and Android. Third parties with whom we do not have any formal relationships control the design of mobile devices and operating systems. These parties frequently introduce new devices, and from time to time they may introduce new operating systems or modify existing ones. Network carriers may also impact the ability to download apps or access specified content on mobile devices. Further, we rely upon third-party platforms for distribution of our app and offerings. Our apps are primarily distributed through the Apple App Store, the Google Play store and traditional websites. In light of this, the promotion, distribution and operation of our app are subject to the applicable distribution platform terms and policies for application developers, which are very broad and subject to frequent changes and interpretation and may not be consistently or uniformly enforced across all applications and with all publishers. Any such changes could limit, eliminate or otherwise interfere with our products, our ability to distribute our applications through the platforms, our ability to update our applications, including to make bug fixes or other feature updates or upgrades, the features we provide, the manner in which we market our products, our ability to access native functionality, or other aspects of mobile devices, and our ability to access information about our users that they collect. Additionally, given the complexity of the regulatory frameworks that apply to the online gaming industry and the pace at which the industry is expanding in various markets, app stores may prohibit or delay the inclusion of our app in their app store in certain jurisdictions due to the app store’s uncertainty or lack of clarity regarding the permissiblypermissibility of online gaming in the impacted jurisdictions.

If it becomes more difficult for our customers to access and use our offerings on their mobile devices, if they choose not to access or use our offerings on their mobile devices, or if they choose to use mobile products that do not offer access to our offerings, our customer growth, retention and engagement could be materially harmed. Additionally, if any of the third-party platforms used to distribute our offerings were to limit or disallow advertising on their platforms for whatever reason or technologies are developed that block the display of our ads, our ability to generate revenue could be negatively impacted. Also, technologies have been, and may continue to be, developed by companies like Apple and Google, that, among other things, block or limit the display of our advertisements and some third-party cookies on mobile and desktop devices, limit cross-site and cross-device attribution, prevent measurement outside a narrowly-defined attribution window and prevent advertisement re-targeting and optimization. These developments could require us to make changes tochange how we collect information on, and track the actions of, our users and impact our marketing activities. While these changes have not had a material impact on our business to date, they could materially impact our business activities and practices in the future, and if we or our advertising partners are unable to timely and effectively adjust to those changes, there could be an adverse effect on our business, financial condition, results of operations and prospects.

Since being founded in 2012, we have primarily focused our efforts on growing our current offerings, including, most recently, by offering online poker games. We have rapidly expanded and anticipate expanding further as new markets open up, our offerings mature and we pursue our growth strategies. The industries in which we operate are subject to rapid technological change, evolving industry, regulatory and legal standards, frequent new product offerings such as sports-based prediction markets, and changes in customer preferences and expectations. We must continuously decide which offerings and technology we should invest in to meet these evolving standards and customer preferences and must also continually introduce and successfully market new and innovative technologies, offerings and enhancements to remain competitive and stimulate customer demand, acceptance and engagement. Our ability to engage, retain and increase our customer base and to increase our revenue will depend heavily on our ability to successfully create new offerings, both independently and together with third parties. We may make changes to our existing technology and offerings or develop and introduce new and unproven products, services and features, with which we have little or no prior development or operating experience. Developing new offerings and systems is inherently complex, costly and uncertain, and customers may not engage with new offerings, even if well-reviewed and of high quality. If we cannot develop technology and offerings that address users’ needs or enhance and improve our existing offerings in a timely manner, that could have a material adverse effect on our business, financial condition, results of operations and prospects.

As a public company, we are required to maintain internal control over financial reporting and report any material weaknesses in such internal controls. Section 404 of Sarbanes-Oxley requires that we evaluate and determine the effectiveness of our internal control over financial reporting.reporting Inand addition, because we are no longer an emerging growth company as of December 31, 2024,that our independent registered public accounting firm must attest to our evaluation of our internal control over financial reporting with our Annual Report.

Due to the nature of our business, we are subject to taxation in numerous jurisdictions, and changes in or new interpretation ofof, 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.

The gaming industry represents a significant source of tax revenue to the jurisdictions in which we are licensed. Gaming companies are subject to significant taxes such as gaming taxes, and fees in addition to corporate income taxes, and such taxes and fees are subject to increase or modification at any time. From time to time, various government bodies or officials have proposed and/or adopted changes in tax rates, tax laws, or in administration, interpretation or enforcement of such laws, affecting the gaming industry. For instance, regulatory authorities may, as they have done in the past, change applicable regulations or their interpretation thereof, related to whether we can deduct for purposes of calculating gaming taxes that we may owe in that jurisdiction, certain promotional incentives such as free bets that we give to some of our customers, and if so, the maximum amount that may be deducted. Worsening economic conditions and the large number of jurisdictions with significant current or projected budget deficits, could also intensify government efforts to raise revenues through tax increases. For instance, certain jurisdictions where we operate have proposed (Louisiana,Arizona, NewIndiana, Jersey,Pennsylvania, MichiganMichigan, West Virginia) or effected (Illinois, Louisiana, Maryland, New Jersey, Ohio) gaming tax rate increases or proposed additional taxes or withholdings (Colombia) in recent years. As recently as FebruaryDecember 2025, the Colombian President issued an internal commotion (state of emergency) decree, pursuant to which he issued a temporarydecree decreetemporarily imposing a 19% VAT tax on playerthe depositsrevenue made in Colombia withof operators of games of chance and luckyluck operated over the internet.internet Asand ofoffered theto dateplayers ofin Colombia. In January 2026, this filing,temporary thesetax decreesdecree arewas subjectpreliminarily to an automatic reviewsuspended by the Constitutional Court of Colombia. If the decrees are found constitutional, it is expected that the VAT may last up until December 31, 2025, subject to determination by theColombian Constitutional Court topending limitits itfinal toreview. noThe moreColombian thancourts 180may days.overturn that preliminary suspension and/or additional tax decrees may be issued. If itenacted, isthese foundkinds constitutional, thisof VAT taxtaxes could negatively impact the demand for our offeringsmargins in Colombia as well as our Colombian revenues and financial results. More generally, we cannot determine with certainty the likelihood of changes in tax rates, tax laws or in the administration, interpretation or enforcement of such laws. Any material increase in, or the adoption of, additional taxes or fees could have a material adverse effect on our business, financial condition, results of operations and prospects.

Portions of our operations are located abroad such as in Colombia, Estonia, Canada, Mexico, Peru, Serbia and Malta, and we may in the future pursue opportunities in other non-U.S. jurisdictions. Some of our customers, business partners, suppliers and personnel, as well as many of the leagues, sports, events, games and matches that we offer wagers on are also based in foreign jurisdictions. Such operations may expose us to high levels of currency, political, economic and compliance risk. 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. For example, in response to the conflict between Russia and Ukraine, the U.S. government and other governments have imposed a series of sanctions against certain Russian government, government-related, and other entities and individuals, together with enhanced export controls on certain products and financial and economic sanctions on certain industry sectors and parties in Russia. The governments of other jurisdictions in which we operate, such as the EU and Canada, have also implemented additional sanctions or other restrictive measures. In Colombia, the Colombian President issued an internal commotion (state of emergency) decree, pursuant to which he issued a temporarydecree decreetemporarily imposing a 19% VAT tax on playerthe depositsrevenue madeof online gaming activity in Colombia withconducted by operators of games of chance and luckyluck operated over the internet. IfIn itJanuary is found constitutional,2026, this temporary tax decree was preliminarily suspended by the Colombian Constitutional Court pending its final review. The Colombian courts may overturn that preliminary suspension and/or additional tax decrees may be issued. If enacted, these kinds of VAT taxtaxes could negatively impact the demand for our offerings in Colombia as well as our Colombian revenuesmargins and financial results. For more information, Seesee “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.” As a result of our international operations, we are subject to a variety of risks and challenges in managing an organization operating in various countries, including those related to:

•political unrest, government instability, global trade wars and disputes, tariffs, terrorism and the potential for other hostilities such as the evolvinguncertainty conflictand fragile cease fire in the Middle East, where some of our suppliers are located or have operations and personnel;

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. For instance, illegal betting activity by athletes could result in Decembernegative 2024,publicity thefor U.S.our Senate Judiciary Committee held a hearing on “America’s High-Stakes Bet on Legalized Sports Gambling,” which, among other things, focused on certain perceived risksindustry and harmscould associatedharm withour sportsbrand betting.reputation. Further, negative publicity about us or our offerings, platform or customer experience, or those of our competitors or third parties with whom we have relationships or the underlying sports leagues could seriously harm our reputation or that of the industry overall.

Our online poker offerings are a peer-to-peer offering, meaning players play against each other instead of against the house. Consequently, the success of our online poker offerings is largely dependentdepend on high levels of player liquidity (i.e., high levels of players available to play in theour online poker offerings at any given time). A significant reduction of this player liquidity, or any legislative or regulatory measures taken that may reduce that liquidity, could have a material adverse impact on the attractiveness of those products as well as eroding their competitive strengths. The occurrence of any event causing an adverse impact on the player liquidity available to our online poker offerings could result in a reduction in the number of customers who are willing to use these products and services, which, if it were to arise to a material degree, could have a material adverse effect on our ability to generate sufficient gameplay, and thus revenue, from those offerings. We cannot provide assureassurance that we will be able to attract and maintain sufficient player liquidity in our online poker products. Certain states, including Delaware, Michigan, Nevada, New Jersey, Pennsylvania, and West Virginia, have joined the Multi-State Internet Gaming Agreement (the “MSIGA”) and enacted related legislation and regulations to permit interstate online poker operations, and it is likely that additional states will join the MSIGA in the future. It is also possible that Ontario could seek admission to the MSIGA by virtue of the Court of Appeal’s recent decision in that province permitting international liquidity in gaming there. That decision remains on appeal to the Supreme Court of Canada but if allowed to stand, it would provide a platform for Ontario to pursue MSIGA admission, among other liquidity based opportunities. Online poker platforms that operate in more than one of the states that have joined MSIGA can combine their player liquidity from across these states, thus potentially making their offerings more attractive to players. As a result, we may face increased competition if our online poker offerings are available in these states, including from competitors that operate in more of these states than us.

Since our formation in 2012 until fairly recently, we had experienced net losses and negative cash flows from operations. For the year ended December 31, 2023,Although we hadhave arecently netexperienced lossprofitability ofand $60.1positive million.cash Weflows from operations, we could incur losses again in the future, some of which may be significant, and we cannot guarantee that we will remainmaintain profitable.or increase our level of profitability. 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. If our revenue does not grow at a greater rate than our expenses, we may be unable to remainmaintain profitable.or increase our level of profitability. 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. Additionally, we may encounter unforeseen expenses, operating delays or other unknown factors that may result in losses in future periods.

We are subject to laws and regulations relating to real-money online casino and retail and online sports betting in the jurisdictions in which we conduct our business or in some circumstances, where our offerings are available. We are also subject to the general laws and regulations that apply to all e-commerce businesses, such as those related to privacy and personal information, tax and consumer protection. Additionally, we are subject to the reporting requirements of the Securities Exchange Act of 1934 (the “Exchange Act”) and must comply with the applicable requirements of the Sarbanes- Oxley Act and the Dodd-Frank Wall Street Reform and Consumer Protection Act, the rules and regulations implemented by the SEC and the listing standards of the New York Stock Exchange (the “NYSE”), including applicable corporate governance and disclosure and financial controls requirements. Further, we and our market access partners (where applicable) are subject to various reporting and anti-money laundering regulations. TheseCompliance with these rules and regulations can be complex and burdensome. Our management and other personnel devote a substantial amount of time to these compliance initiatives. Moreover, these rules and regulations increase our legal and financial compliance costs and make some activities more time-consuming and costly. Additionally, these laws and regulations vary among jurisdictions and future legislative and regulatory action, court decisions or other governmental action, which may be affected by, among other things, political pressures, attitudes and climates, as well as personal biases, may have a material impact on our operations and financial results. In particular, some jurisdictions have introduced regulations or legislation attempting to restrict or prohibit online gaming. Additionally, some jurisdictions in which we may operate could presently be unregulated, partially regulated or in the process of regulating and therefore may be more susceptible to the enactment or change of laws and regulations.

Future legislative and regulatory action, and court decisions or other governmental action,action may have a material impact on our operations and financial results. Governmental authorities could view us as having violated local laws, despite our efforts to obtain applicable licenses or approvals. Further, governmental authorities or courts could determine that our free-to-play,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. Civil and criminal proceedings, including class actions brought by or on behalf of prosecutors, public entities, incumbent monopoly providers or private individuals, could be initiated against us, Internet service providers, credit card and other payment processors, financial institutions, advertisers and others involved in the online gaming industries. Such potential proceedings could involve substantial litigation expense, penalties, fines, asset seizures, injunctions or other restrictions being imposed upon us, our licensees or other business partners, while diverting the attention of management. Such proceedings could have a material adverse effect on our business, financial condition, results of operations and prospects, as well as impact our reputation.

•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,customers (if any), or the monitoring of their behavior in the EU. Compliance with the range of obligations created by the GDPR is an ongoing commitment that involves substantial costs. Despite our efforts, governmental authorities or others may assert that our business practices fail to comply with its requirements. If our operations are found to violate the GDPR, we may incur substantial fines, have to change our business practices or face reputational harm, any of which could have an adverse effect on our business. Serious breaches of the GDPR can result in administrative fines of up to 4% of annual worldwide revenues. Fines of up to 2% of annual worldwide revenues can be levied for other specified violations; and

•Various statestate, country and province privacy laws, many of which give new data privacy rights to their respective residents (including, for example, 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.

Further, we are subject to evolving laws and regulations that dictate whether, how and under what circumstances we can transfer, process and/or receive personal data. The EU-U.S. Privacy Shield framework that previously allowed U.S. companies that self-certify to the U.S. Department of Commerce and publicly commit to comply with specified requirements to import personal data from the EU has been invalidated by the Court of Justice of the EU (the “CJEU”). The CJEU upheld Standard Contractual Clauses (“SCCs”) as a valid transfer mechanism, provided they meet certain requirements. On June 4, 2021, the European Commission published new SCCs for this purpose, and we may have to adapt our existing contractual arrangements to meet these new requirements. The validity of data transfer mechanisms remains subject to legal, regulatory and political developments in bothEurope, EuropeLatin America, Canada, and the United States, such as recent recommendations from the European Data Protection Board, decisions from supervisory authorities, recent proposals for reform of the data transfer mechanisms for transfers of personal data outside the United Kingdom, and potential invalidation of other data transfer mechanisms, which, together with increased enforcement action from supervisory authorities in relation to cross-border transfers of personal data, could have a significant adverse effect on our ability to process and transfer personal data outside of the European Economic AreaArea, the United Kingdom, Canada, and/or theLatin UnitedAmerican Kingdom.regions.

These laws and regulations are evolving and subject to interpretation, including developments that create some uncertainty, and compliance obligations could cause us to incur costs or harm the operations of our offerings in ways that harm our business. For example, in the EU, several supervisory authorities have issued new guidance concerning the ePrivacy Directive’s requirements regarding the use of cookies and similar technologies, including limitations on the use of data across messaging products and specific requirements for enabling users to accept or reject cookies, and have in some cases brought (and may bring in the future) enforcement action in relation to those requirements. In the United States, certain types of cookies may be deemed sales of personal information within the CCPA and other state laws, such that certain disclosure requirements and limitations apply to the use of such cookies. In addition, some countries are considering or have passed legislation implementing data protection requirements or requiring local data storage and processing that could increase the cost and complexity of delivering our services in those countries, while decreasing reliability.

North and Latin American jurisdictions, whether at the federal, state, provincial, regional or local level, may legalize real-money gaming in a manner unfavorable to us. As a result, we may encounter legal, regulatory or political challenges that are difficult to foresee and which could result in unforeseen adverse impacts on projected revenues or costs associated with the new opportunity. For example, certain jurisdictions require us to have a relationship with a local partner for online sportsbook or online gaming access, which tends to increase our costs of revenue. StatesJurisdictions with state-rungovernment-run monopolies may limit opportunities for private sector participants like us. StatesJurisdictions also impose substantial taxes on online sports betting and online gaming revenue, in addition to sales taxes in certain jurisdictions and a U.S. federal excise tax of 25 basis points on the amount of each wager. As most state product taxes apply to various measures of modified gross profit, tax rates, whether federal-federal-, provincial- or state-based, that are higher than we expect will make it more costly and less desirable for us to launch in a given jurisdiction, while tax increases in any of our existing jurisdictions may adversely impact our profitability.

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. 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. The online gaming industry continuously experiences social engineering, phishing, malware, ransomware and similar attacks and threats of denial-of-service attacks, none of which to date have been material to our business; however, such attacks could in the future have a material adverse effect on our operations. For instance, although we were unaffected, in late 2022, some of our competitors disclosed that their systems were subject to successful attempts by one or more individuals who ultimately gained unauthorized access to customer accounts and withdrew funds from the customers’ accounts, and in 2023 several land-based casinos experienced ransomware attacks, some of which significantly impacted their ability to operate effectively. More recently, in November 2024, a multinational gaming supplier experienced a data security incident involving unauthorized third-party access to its internal systems, which compromised sensitive personal information of over 100,000 individuals. If a material security breach were to occur, our reputation and brands could be damaged, our business may suffer, we may have to expend significant capital and other resources to alleviate problems caused by such breaches, and we could be exposed to a risk of loss, litigation or regulatory action and possible liability. We cannot guarantee that recovery protocols and backup systems will be sufficient to prevent data loss. Actual or anticipated attacks may cause us to incur increased costs, including costs to deploy additional personnel and protection technologies, implement policies, procedures and response plans, train employees and engage third-party experts and consultants.

Our technology infrastructure is critical to the performance of our platform and offerings and to customer satisfaction. However, our systems may not be adequately designed with the necessary reliability and redundancy to avoid performance delays or outages that could harm our business. We cannot assure you that absolute security will be provided by the measures we take to: detect, prevent, stop or respond to cyber attacks and protect our systems, data and customer information; prevent outages, or data or information loss; and prevent or detect security breaches or fraud. Such measures include a disaster recovery strategy for server and equipment failure, back-office systems and the use of third parties for certain cybersecurity services. We have experienced, and we may in the future experience, disruptions, outages and other performance problems on our platform or offerings due to a variety of factors, including human or software errors, infrastructure changes, power supply issues and capacity constraints. For example, in October 2025, we recentlywere experienced a disruption to our operations in several markets that was causedimpacted by a configurationwidespread issueinternet setoutage resulting from a DNS management failure at a leading cloud services provider and by oneseparate ofmajor oursoftware third-partyand hostingglobal facilities.routing disruptions at another cloud computing platform provider. To date, such disruptions, individually and in the aggregate, have not had a material impact on us; however, future disruptions from the foregoing factors or unauthorized access to, fraudulent manipulation of, or tampering with our systems, technological infrastructure and data, or those of third parties, could result in a wide range of negative outcomes, each of which could materially adversely affect our business, financial condition, results of operations and prospects.

We collect and process information relating to our customers, personnel and others for various business reasons, including marketing and promotions. The collection and use of personal data is governed by U.S. and foreign privacy laws and regulations, which continue to evolve and may occasionally be inconsistent (or conflict) across jurisdictions. Various U.S. federal, state and foreign legislative or regulatory bodies may enact new or additional laws and regulations concerning privacy and data retention, transfer and protection. For example, the EU’s adoption of the GDPR, which became fully enforceable in May 2018, includes operational and compliance requirements with significant penalties for non-compliance. California has enacted the California Consumer Privacy Act as amended by the California Privacy Rights Acts, a comprehensive privacy law, which provides some of the strongest U.S. privacy requirements to date. In addition, new privacy laws and requirements in various U.S. states, including in states where we offer real money gaming and where we have personnel, are continuing to come into effect each year.

We have incorporated and will likely continue to incorporate artificial intelligence (“AI”) solutions into our business and ,business, and applications of AI may become important in our operations over time. Our competitors or other third parties may incorporate AI into their product development, product offerings, and technology more quickly or more successfully than us, which could impair our ability to compete effectively and adversely affect our results of operations. Third-party AI tools may be deemed to be infringing on third-party intellectual property rights (including as a result of being trained on unauthorized materials) or may contain insufficient safeguards, matters over which we have no or limited visibility or control. 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.

The use ofUsing AI (and, in particular, generative AI) can lead to unintended consequences, including the generation of outputs that appear correct but are factually inaccurate, misleading,misleading or are otherwise flawed, which could harm our reputation and business. The content, analysis, materials, software, recommendations and other outputs produced by AI (and, in particular, generative AI), may be subject to limited or no intellectual property or other proprietary protection. We may lose intellectual property and other proprietary rights in any data, content, confidential information, trade secrets,secrets or other materials that we provide as inputs to AI technology. If we are unable to assert proprietary rights in such outputs or inputs against use by third parties, we may experience competitive harm, and our financial condition and results of operations may be adversely affected. We may experiment with or deploy AI agents or other AI-enabled automation that can plan, make decisions, and take actions with reduced human prompting or oversight. Such autonomous systems may increase the risk of unintended, unauthorized or harmful outcomes, including where such systems interact with other systems or third-party tools, data sources or vendors.

Emerging ethical issues surround the use of AI or generative AI,AI. and ifIf our use of AI or generative AI becomes controversial, we may be subject to reputational risk. Any sensitive information (including confidential, competitive, proprietary or personal data) input into third-party generative AI processes in connection with our offerings, systems or operations could be leaked or disclosed to others, including if sensitive information is used to train any generative AI models. Additionally, where the product ingests personal data and makes connections using such data, these AI or generative AI processes may reveal other personal or sensitive information generated by the AI solution. Unauthorized use or misuse of generative AI by our personnel or others may also result in disclosure of confidential or proprietary data, reputational harm, privacy or data protection law violations and legal liability. AI use could result in biased results and could lead us to make decisions that may bias certain individuals or classes of individuals, and adversely impact their rights, employment, and ability to obtain certain pricing, products, services or benefits. In addition, our use of generative AI may also lead to novel cybersecurity risks (such as if a bad actor “poisons” the generative AI with bad inputs or logic), including the misuse of personal or business confidential data, which may adversely affect our operations and reputation.

AI is subject to a dynamic and rapidly evolving legal and regulatory environment, the extent and scope of which may in many instances be uncertain and may vary (or conflict) across jurisdictions. As a result, this may require significant resources to modify and maintain business practices to comply with U.S. and foreign laws, the nature of which cannot be determined at this time. Several jurisdictions around the globe, including Europe and certain U.S. states, have alreadyproposed, proposedenacted or enactedare considering laws or guidelines governing AI.the development and use of AI, such as the European Union’s Artificial Intelligence Act (“EU AI Act”) and Colorado’s Artificial Intelligence Act. For example, Europeanthe regulatorsEU haveAI proposedAct imposes a stringent AI regulation with fines in excessnumber of thoseobligations underon various parties related to the GDPR,development and weuse expectof othercertain AI-based systems, and additional jurisdictions willare beginning to adopt or prepare for adoption of similar laws. OtherThese jurisdictionslaws may also decide to adopt similar orbe more restrictive legislationthan thatthe EU AI Act and may render the use of such technologies challenging. Additionally, certain privacy laws extend rights to consumers (like the right to delete certain personal data) and regulate automated decision making, which may be incompatible with AI features or the use of generative AI. These obligations may make it harder for us to conduct our business using AI, lead to regulatory fines or penalties, require us to change our business practices, retrain our AI, or prevent or limit our use of AI. For example, the U.S. Federal Trade Commission has required other companies to turn over (or disgorge) valuable insights or trainings generated through the use of AI where they allege the company has violated privacy and consumer protection laws. If we cannot use AI or that use is restricted, our business may be less efficient or we may be at a competitive disadvantage.

We rely on a variety of direct marketing techniques, including email marketing, online advertising and direct mailings. Any further restrictions in laws such as the CAN-SPAM Act, the Telephone Consumer Protection Act, the Do-Not-Call-Implementation Act, applicable Federal Communications Commission telemarketing rules (including the declaratory ruling affirming the blocking of unwanted robocalls), the FTC Privacy Rule, Safeguards Rule, Consumer Report Information Disposal Rule, Telemarketing Sales Rule, Canada’s Anti-Spam Law and various U.S. state laws, or new U.S federal, state or foreign laws and regulations (including gaming laws and regulations) on marketing and solicitation or international privacy, e-privacy, and anti-spam laws that govern these activities could adversely affect the continuing effectiveness of email, online advertising and direct mailing techniques and could force further changes in our marketing strategy. In particular, these laws may require us to make disclosures regarding our privacy and information sharing practices, safeguard and protect the privacy of such information, and in some cases, provide customers the opportunity to “opt out” of the use of their information for certain purposes, any of which could limit our ability to leverage existing and future databases of information or require us to develop alternative marketing strategies, any of which could have a material adverse effect on our financial condition, results of operations, and cash flows. Various national and local privacy laws also regulate tracking individuals who visit our websites and the use of tracking technologies, including pixels, web beacons and cookies. We are obligated to permit individuals to choose how we use and store their information. Failure to obtain cookie consent under laws may result in fines or otherwise limit our ability to use information and potentially limit our marketing and business strategies.

We host our online gaming platform and offerings using third-party public and on-premise private cloud infrastructure and hosting services and on-premise server rooms hosted by certain of our land-based casino partners. We do not have full control over the operations of the infrastructure of these third parties that we use or anticipate using such as cloud-hosting providers (i.e., Amazon Web Services and Google Cloud) and on-premises hosting, data centers and related service providers or the facilities (including the server rooms) of our casino partners. 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. We have experienced and expect in the future to experience, interruptions, delays and outages in service and availability from these providers on account of, among other things, infrastructure changes, human or software errors like the recentOctober 2025 configuration issues caused by a third-partyleading datacloud centerservices provider, which resulted in servicewidespread disruptionsinternet outages that caused our online gaming platform to become inaccessible in several of the jurisdictions in which we operate, including Illinois, New Jersey, Michigan, West Virginia, Maryland,Indiana, Pennsylvania, Louisiana and Ohio,Peru, website hosting disruptions, power supply issues, and capacity constraints. Any such interruptions, delays or outages that result in sustained or repeated system failures with respect to our platform could reduce the attractiveness of our offerings. Any capacity constraints may also impact our ability to maintain performance of our offerings. 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. These impacts (and any associated negative publicity regarding them) may harm our brands or reduce customers’ use of our platform, which may negatively impact our business, financial condition, results of operations and prospects.

Our success depends in part on our relationships with third-party service providers. For example, we receive sports betting odds and streaming data, and certain risk management and trading services from third parties, and in some jurisdictions we are required to obtain official league data. We also rely mostly on third parties for content delivery such as online slots, table games,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. Further, if any of our service or data providers terminate their relationship with us or refuse to renew their agreement with us on commercially reasonable terms, we may need to find alternate providers, and as consolidation in the gaming and entertainment industries continues, if a competitor acquires any of our third-party providers, we may need to find an alternate provider (which in some cases may be difficult due to the limited number of providers for certain services such as geolocation), and in each case we may be unable to secure similar terms or replace such providers in an acceptable timeframe. Furthermore, sports leagues, teams and venues may enter into exclusive partnerships with our competitors, which could adversely affect our ability to engage in certain types of marketing and promotions, use certain league, team and venue logos, names and/or other intellectual property, and offer certain types of wagers. We also rely on other third-party software and services such as communications and internal software, and our business may be adversely affected if such software and services do not meet our expectations, contain errors or vulnerabilities, are compromised or experience outages. Any of these could increase our costs and adversely affect our business, financial condition, results of operations and prospects. Further, any negative publicity involving any of our third-party providers, including related to regulatory concerns or allegations of bad or unethical actions, could adversely affect our reputation and brand, result in us severing our relationship with such provider and could potentially lead to increased regulatory or litigation exposure.

A substantial portion of our network infrastructure is provided by third parties, including Internet service providers and other technology-based service providers. We use technology-based service providers such as CloudFlare to mitigate cybersecurity risks such as distributed denial-of-service attacks. If our service providers experience service interruptions, including because of cyber attacks or due to an event causing an unusually high volume of Internet use, communications over the Internet may be interrupted and impair our ability to conduct our business. Internet service providers and other technology-based service providers may in the future roll out upgraded or new mobile or other telecommunications services, such as 6G services, which may not be successful and thus may impact our customers’ ability to access our platform or offerings in a reasonable fashionmanner or at all. In addition, our ability to process e-commerce transactions depends on bank processing and credit card systems. We cannot guarantee that the Internet infrastructure or our own network systems will continue to be able to meet the demand placed on us by the continued growth of the Internet, the overall online gaming industry and our customers. Any difficulties these providers face, including certain network traffic potentially receiving priority over other traffic (i.e., lack of net neutrality), may adversely affect our business. In addition, we exercise little control over these providers, which increases our vulnerability to problems with the services they provide. Any system failure as a result of reliance on third parties, such as network, software or hardware failure, including as a result of cyber-attacks, which causes a loss of our customers’ property or personal information or a delay or interruption in our online services or offerings, including our ability to handle existing or increased traffic, could result in a loss of anticipated revenue, interruptions to our platform and offerings, cause us to incur significant legal, remediation and notification costs, degrade the customer experience and cause our customers to lose confidence in our offerings, any of which could have a material adverse effect on our business, financial condition, results of operations and prospects.

Neil G. Bluhm and Richard Schwartz and their respective trusts and entities controlled by them (collectively, the “Controlling Holders”) together as a group control a majority of the voting power of our outstanding common stock. As a result, we are a “controlled company” under the NYSE’s corporate governance standards. Under these rules, a company of which more than 50% of the voting power for the election of directors is held by an individual, group or another company is a “controlled company” and may elect to not to comply with certain corporate governance requirements, including:

The Company entered into an Investor Rights Agreement (the “Investor Rights Agreement”), pursuant to which, as long as the Company is a “controlled company” under applicable NYSE rules, Rush Street Interactive GP, LLC, in its capacity as the Sellers’ Representative of the Controlling Holders and the other holders of equity interests of RSILP (the “Sellers”) under the Business Combination Agreement (in such capacity, the “Sellers’ Representative”) and dMY Sponsor, LLC (the “Sponsor”) will have the right to nominate up to nine (or the maximum number that may be nominated by the Sellers’ Representative without violating the NYSE’s controlled company requirements) and up to two directors, respectively, to the Board, 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 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. As of the date of this Annual Report, the Sponsor hasdoes not have the right to designate onlyany onedirectors director.pursuant to the Investor Rights Agreement.

As part of our strategy, we have engaged and may continue to engage in transactions such as acquisitions, investments or partnerships as opportunities arise to add new or complementary businesses, products, brandsbrands, markets or technologies. In some cases, the costs of such transactions may be substantial, including as a result of professional fees and due diligence efforts.

In some cases, the costs of such transactions may be substantial, including as a result of professional fees and due diligence efforts. There is no assurance that the time and resources expended on pursuing a particular transaction will result in a completed transaction, or that a completed transaction will ultimately be successful or provide a favorable return. In addition, we may be unable to identify suitable acquisition, investment or partnership opportunities or may be unable to obtain any required financing or regulatory approvals, and thus may be unable to complete such transactions on favorable terms, if at all. We may pursue transactions with which our investors may not agree. In addition, such transactions and the applicable integration thereof require significant time and resources and place significant demands on our management, as well as on our operational and financial infrastructure. If we fail to successfully close transactions or integrate the products, personnel and technologies associated with these transactions into our business, our business could be seriously harmed. Such transactions may expose us to operational challenges and risks, including:

RSILP is a partnership for U.S. federal income tax purposes and, as such, generally will not be subject to any entity-level U.S. federal income tax. Instead, taxable income will be allocated for U.S. federal income tax purposes to the holders of RSILP Units,Class A common units (the “RSILP Units”), including RSI ASLP, Inc. (the “Special Limited Partner”), which is part of our consolidated group for U.S. federal income tax purposes. Accordingly, we will be required to pay U.S. federal income taxes on the Special Limited Partner’s allocable share of RSILP’s net taxable income. The Amended and Restated Limited Partnership Agreement of RSILP, dated as of December 29, 2020 (the “RSILP A&R LPA”), requires RSILP to make tax distributions to holders of RSILP Units (including the Special Limited Partner) calculated at certain assumed rates. In some cases, these assumed rates may be significantly higher than the holders’ actual tax rates. The amount of these tax distributions can be significant, in particular as RSILP’s profitability increases, which could have a material adverse impact on our cash flows. In addition to tax expenses, we and the Special Limited Partner will also incur expenses related to the Special Limited Partner’s operations, including its payment obligations under the TRA, which could be significant and some of which RSILP will reimburse (excluding payment obligations under the TRA). The Special Limited Partner intends to cause RSILP to make ordinary distributions and tax distributions to the holders of RSILP Units on a pro rata basis in amounts sufficient to cover all applicable taxes, relevant operating expenses, payments under the TRA and dividends, if any, declared by us. However, as noted below, RSILP’s ability to make such distributions may be subject to various limitations and restrictions, including, but not limited to, retention of amounts necessary to satisfy the obligations of RSILP and its subsidiaries and restrictions on distributions that would violate any applicable law or restrictions contained in RSILP’s debt agreements (if any), or that would have the effect of rendering RSILP insolvent. If the Special Limited Partner is unable to make payments under the TRA for any reason, such payments will be deferred and accrue interest until paid, provided, however, that nonpayment for a specified period and/or under certain circumstances may constitute a material breach of a material obligation under the TRA and therefore accelerate payments under the TRA, which could be substantial.

The Sellers may exchange their RSILP Units,Units retained by them in connection with the Business Combination (the “Retained RSILP Units”), together with the cancellation of an equal number of shares of the Company’s Class V common stock, par value $0.0001 per share (the “Class V Voting Stock,Stock”), for shares of Class A Common Stock (or cash) pursuant to the RSILP A&R LPA, subject to certain conditions and transfer restrictions as set forth therein and in the Investor Rights Agreement. These exchanges are expected to result in increases in the Special Limited Partner’s allocable share of the tax basis of RSILP’s tangible and intangible assets. These increases in tax basis may increase (for income tax purposes) depreciation and amortization deductions and therefore reduce the amount of income or franchise tax that we and the Special Limited Partner would otherwise be required to pay in the future had such exchanges never occurred.

•changes in our capital structure, such as future issuances of securities or the incurrence of third-party debt;

Our continued eligibility for listing on the NYSE depends on a number of factors. If the NYSE delists our Class A Common Stock from trading on its exchange for failure to meet the listing standards, we and our stockholders could face significant material adverse consequences including: (i) a limited availability of market quotations for our securities; (ii) a determination that our Class A Common Stock is a “penny stock,” which will require brokers trading in our Class A Common Stock to adhere to more stringent rules, possibly resulting in a reduced level of trading activity in the secondary trading market for our Class A Common Stock; (iii) a limited amount of analyst coveragecoverage, if any; and (iv) a decreased ability to issue additional securities or obtain additional financing in the future.

Consumer discretionary spending and consumer preferences are driven by socioeconomic factors beyond our control, and our business is sensitive to reductions from time to time in consumer discretionary spending. Demand for entertainment and leisure activities, including gaming, can be affected by changes in the economy and consumer tastes, both of which are difficult to predict and beyond our control. Unfavorable changes in general economic conditions, including recessions, declines in consumer confidence in the economy, economic slowdowns, sustained high levels of unemployment or inflation, tariffs, increased interest rates, and rising prices, in particular of food and energy, fears of war and acts of terrorism or perceived weak or weakening economic conditions, may reduce our customers’ disposable income or result in fewer individuals engaging in entertainment and leisure activities, such as online casino and sports betting. As a result, we cannot ensure that demand for our offerings will remain constant.constant or increase over time. Adverse developments affecting economies throughout the world, including those noted above as well as a general tightening of credit availability, decreased liquidity in certain financial markets, foreign exchange fluctuations, transportation or supply chain disruptions, natural disasters or significant declines in stock markets, as well as concerns regarding pandemics or other health emergencies, could lead to reductions inreduced discretionary spending on leisure activities such as online casino and sports betting.

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.purchase (where permitted). 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”.

We currently generate revenue through two operating models: (i) B2C and (ii) B2B. 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. Our B2C operations contributed more than 99% and 98% of our total revenue for the years ended December 31, 20242025 and 2023,2024, respectively and we expect that it will continue to be our primary operating model into the future. 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. 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.

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 (including online poker) or online sports betting offerings. For periods longer than one month, 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.

The year-over-year increase in MAUs in Latin America for 20242025 compared to 2023,2024, as well as for 20232024 compared to 2022,2023, 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. WeIn 2024, we also experienced an uplift in MAUs in 2024 driven by the Copa América soccer tournament in mid-2024 and our launch in Peru during the third quarter of 2024. Additionally, the full year of operations in MexicoPeru in 2023 significantly2025 contributed to the year-over-year increase in MAUs for 20232025 compared to 2022.2024.

TheARPMAU year-over-yearremained increasegenerally in ARPMAUflat in the United States and Canada for 2025 compared to 2024 while significantly increasing MAUs in the same period. This trend reflects the addition of new players, who typically generate lower ARPMAU compared to more established players. The year-over-year increase 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 sportsbettingsports betting only markets, the impact of our strategic advertising and marketing efforts and our focus on retaining quality players.

The year-over-year decrease in ARPMAU in Latin America for 2025 compared to 2024 was mainly driven by the negative impact of our additional player bonusing as a result of the value-added tax imposed on customer deposits in Colombia, which became effective during the year ended December 31, 2025. We generally maintained ARPMAU in Latin America at a roughly consistent level for 2024 compared to 2023, while significantly increasing MAUs in the same period. The Company experienced a significant increase in sports betting-only customers, during the 2024 Copa América soccer tournament, who generally generate less revenue per customer than customers who use online casino.

We define Adjusted EBITDA as net income (loss) before interest expense,interest, income taxes, depreciation and amortization, share-based compensation, adjustments for certain one-time or non-recurring items and other adjustments.adjustments that are detailed in the reconciliation table below. 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).performance.

Our financial position and results of operations depend, to a significant extentextent, on the following factors:

Our financial growth prospects largely depend on our ability to make our online casino and sports betting offerings available in more jurisdictions, with particular emphasis on the United States and Latin America, a trend that we believe is still in its early stage. Online casino may expand further due to many factors, including that many U.S. states and foreign jurisdictions are seeking ways to increase revenues. In the United States, online sports betting’s prospects were made possible after the U.S. Supreme Court struck down PASPA in May 2018. Our strategy is to enter new jurisdictions that we believe are financially prudent for us to enter. Online casino is currently authorized only in eightnine U.S. states: Connecticut, Delaware, Maine (although the market is not yet operating), Michigan, New Jersey, Pennsylvania, West Virginia, Rhode Island and Nevada (although regulators have not authorized online casino outside of physical casinos in Nevada). 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. 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 or be more difficult than we anticipate. In addition, legislative or regulatory restrictions and gaming taxes may make it less attractive or more difficult for us to do business in a particular jurisdiction. Further, certain jurisdictions require us to have a relationship with a bricks-and-mortar casino or other land-based partner for online casino and/or sports betting access, which tends to increase our costs of revenue. Jurisdictions that have established state or government-run monopolies may limit opportunities for private operators such as us.

With respect to paid marketing, we use a broad array of advertising channels, including television, radio, out-of-home (i.e., billboards, stadium signage), 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 concentrated within the specific jurisdictions where we operate or intend to operate.operate to the extent possible. 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 which advertising methods and channels are working and which ones are not. These investments and personalized promotions are intended to increase consumer awareness and drive engagement.

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),gaming, where users can earn or purchase (where permitted) virtual credits to enjoy free-to-play games.

We provide social gaming (where permitted) where users can earn or purchase (where permitted) virtual credits to enjoy free-to-play games. Users who exhaust their credits can either purchase additional virtual credits from the virtual cashiercashier, if permitted, 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.

Costs of Revenue. Costs of revenue consist primarily of (i) revenue share and market access fees, which is reduced by any consideration from the vendor, (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 shouldshould, typicallyin large part, 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 servicesservices, geolocation, know-your-customer and certain elements of our platform technology, such as geolocation and know-your-customer.hosting. Gaming taxes primarilyinclude relate to statejurisdictional taxes andthat are determined based on a jurisdiction-by-jurisdictionpercentage basis.of revenue (or similar metrics) or excise taxes that are determined based on a percentage of bets placed. We incur payment processing costs on customerplayer depositsdeposits, withdrawals and occasionally chargebacks (i.e., when a payment processor contractually disallows customer deposits in the normal course of business).

AdvertisingSales and PromotionsMarketing. Costs. AdvertisingSales and promotionmarketing costs consist primarily of costs associated with marketing our offeringsproducts and services via different channels, promotional activities and the related customercosts acquisitionincurred costs.to acquire new customers. These costs also include salaries, bonuses, benefits and share-based compensation for dedicated personnel and are expensed as incurred.

With respect to paid marketing, we use a broad array of advertising channels, including television, radio, out-of-home (i.e., billboards, stadium signage), 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.

General and Administrative. General and administrative expensescosts consist primarily of administrative personnel costs,costs (including salaries, bonusesbonuses, benefits and benefits, share-based compensation expense for dedicated personnel,), professional fees related to legal, compliance, auditaccounting and consultingconsulting, services,indirect rent,technology costs, rent expense, insurance costs, technologycosts and foreign exchange gains or losses.

A discussion of changes in our results of operations in 20232024 compared to 20222023 has been omitted from this Form 10-K, but it may be found in “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” of our Form 10-K for the fiscal year ended December 31, 2023,2024, filed with the SEC on MarchFebruary 7,28, 2024,2025, which is available free of charge on the SEC's website at www.sec.gov and at www.RushStreetInteractive.com.

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 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 prediction markets or 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 financial performance.

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., World Cup, Copa América, UEFA, Olympics).

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. For example, in 2025 throughand thethus datefar ofin this filing,2026, several U.S. states introduced bills to legalize and regulate online casino. WhileEarlier thethis outcomeyear, ofone thesesuch billsbill isin uncertain,Maine andbecame somelaw ofenabling themstatewide havewagering alreadyin beenpartnership tabledwith orcertain didNative notAmerican receivetribes, thewhile necessaryothers either remain pending, including a bill in Virginia that has received several favorable votes to proceed atduring this time,current itlegislative session. We believe this shows that there is strong interest in legalizing online casino. 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.

WeAs of December 31, 2025, we had $229.2$336.3 million in cash and cash equivalentsequivalents, as of December 31, 2024 (excluding legally restricted customer cash deposits,deposits whichthat we segregate from our operating cash balances).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.

InWe connectionare withrequired theto Businessmake Combination, we executed the TRA, which generally provides that the Special Limited Partner pay an amountpayments 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 relatedwe torealize in connection with the transactionsTRA. contemplatedThese obligations under the BusinessTRA, Combinationwhile Agreementmainly andnon-current in nature, reduce future operating cash flows as the exchange of Retained RSILP Units for Class A Common Stock (or cash) andassociated tax benefits relatedare to entering into the TRA, including tax benefits attributable to payments under the TRA.realized. 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,made. andPayments noassociated materialwith paymentsthe thereunderTRA liability are expected to include $1.2 million in the nearnext future12 asmonths paymentsand underadditional obligations of $128.8 million are expected subsequent to the TRAupcoming are12-month not owed until the tax benefits generated thereunder are more-likely-than-not to be realized.period.

We expect our existing cash and cash equivalent 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. See Note 14 of our consolidated financial statements, included elsewhere in this Annual Report for a summary of our commitments as of December 31, 2024.2025. 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 A&R 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. See Note 1 to our consolidated financial statements, included elsewhere in this Annual Report.

We had been issued $31.1$31.3 million and $28.0$31.1 million in surety bonds as of December 31, 20242025 and 2023,2024, respectively, that are used to satisfy regulatory requirements related to securing cash held for theon behalf of customers. In addition, we had also been issued $6.4 million and $6.1 million in surety bonds as of December 31, 2025 and 2024, 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 expected to be remote.

Debt and Letters of Credit

As of December 31, 20242025 and 2023, we had no outstanding debt. As of December 31, 2024 and 2023,2024, we had an outstanding letter of credit for $4.3$6.2 million and $3.1$4.3 million, respectively, in connection with our operations in Colombia for which no amounts had been drawn.

On October 24, 2024, our Board authorized the repurchase of an aggregate of up to $50 million of our Class A Common Stock through open market purchases, privately negotiated transactions or other transactions in accordance with applicable securities laws.laws (the “Stock Repurchase Program”).

A discussion of changes in cash flows in 2025 compared to 2024 is included below. A discussion of changes in cash flows in 2024 compared to 2023 is included below. 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. Management’s Discussion and Analysis of Financial Condition and Results of Operations” of our Form 10-K for the fiscal year ended December 31, 2023,2024, filed with the SEC on MarchFebruary 7,28, 2024,2025, which is available free of charge on the SEC's website at www.sec.gov and at www.RushStreetInteractive.com.

Operating activities. Net cash provided by operating activities wasduring $106.42025 increased by $58.6 million forto the$165.0 year ended December 31, 2024million, as compared to $5.9$106.4 million usedduring the same period in operating activities for the year ended December 31, 2023.2024. The increasedincrease provisionwas ofprimarily cashdue reflects ato higher period-over-period net income totaling $67.3$66.8 million, increasedwhich was partially offset by a decrease in non-cash expenses of $7.3$6.2 million,million and an increase of $37.8 million due to the changechanges in operating assets and liabilities.liabilities of $2.0 million. The increasedecrease in non-cash expenses was driven primarily by additionalthe deferred income tax benefit of $112.1 million and a decrease in 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$9.0 million, which was partially offset by fewerchange write-offsin tax receivable agreement liability, additional depreciation and amortization expense and non-cash lease expense of long-lived$107.0 assetsmillion, of$7.8 $0.7million million.and $0.1 million, respectively.

ThereOther than the risk factor below, there have been no material changes to the risk factors disclosed under the heading “Risk Factors” in our Annual Report.

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 (where permitted). 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 fourfive international markets as outlined in the table below.

The chart below presents our average MAUs in the United States and Canada for the threesix months ended MarchJune 31,30, 2026 and 2025:

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. We also experienced an increase in MAUs associated with increased player engagement surrounding the lead-up to, and beginning of, the 2026 FIFA World Cup.

The chart below presents our average MAUs in Latin America (including Mexico) for the threesix months ended MarchJune 31,30, 2026 and 2025:

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. We also experienced an increase in MAUs associated with increased player engagement surrounding the lead-up to, and beginning of, the 2026 FIFA World Cup.

The chart below presents our ARPMAU in the United States and Canada for the threesix months ended MarchJune 31,30, 2026 and 2025:

The chart below presents our ARPMAU in Latin America (including Mexico) for the threesix months ended MarchJune 31,30, 2026 and 2025:

The year-over-year increase in ARPMAU in Latin America was primarily driven by a reduction in player bonusing during the threesix months ended MarchJune 31,30, 2026. This decrease in player bonusing followed a ruling by the Colombian Constitutional Court that a presidential decree imposing a temporary value-added tax on online betting in Colombia, which became effective during the three months ended March 31, 2025, was unconstitutional. Additionally, favorable exchange rate fluctuations also contributed to the year-over-year increase in ARPMAU in Latin America.

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

Comparison of the Three Months Ended MarchJune 31,30, 2026 and 2025

Revenue. Revenue increased by $108.0$124.6 million, or 41%,46%, to $370.4$393.8 million for the three months ended MarchJune 31,30, 2026 as compared to $262.4$269.2 million for the same period in 2025. The increase was mainly due to and directly correlated with our continued growth across existing markets. The increase reflects higher period-over-period online casino and sports betting revenue of $108.0$124.7 million, which was partially offset by a decrease in social gaming revenue of $0.1 million.

Costs of Revenue. Costs of revenue increased by $67.3$80.0 million, or 39%,46%, to $238.2$254.1 million for the three months ended MarchJune 31,30, 2026 as compared to $170.9$174.1 million for the same period in 2025. The increase was mainly due to and directly correlated with our continued growth as noted above. Gaming taxes, market access costs, payment processing costs and operating expenses contributed $32.6$45.3 million, $14.0$14.5 million, $12.1$12.4 million and $8.3$7.7 million, respectively, to the period-over-period increase in costs of revenue, with personnel costs contributing to the remaining $0.3$0.1 million. Costs of revenue as a percentage of revenue decreasedremained toflat 64%at 65% for the three months ended MarchJune 31,30, 2026 as compared to 65% for the same period inand 2025.

Sales and Marketing. Sales and marketing expense increased by $5.3$12.8 million, or 12%,34%, to $47.4$49.9 million for the three months ended MarchJune 31,30, 2026 as compared to $42.1$37.1 million for the same period in 2025. The increase was primarily driven by higher marketing spend associatedrelated withto the 2026 OlympicFIFA WinterWorld GamesCup, asthe wellnew asmarket launch in Alberta (Canada), and other strategic investments. Sales and marketing expense as a percentage of revenue decreased to 13% for the three months ended MarchJune 31,30, 2026 as compared to 16%14% for the same period in 2025.

General and Administrative. General and administrative expense increased by $6.3$8.7 million, or 25%,37%, to $31.3$32.5 million for the three months ended MarchJune 31,30, 2026 as compared to $25.0$23.8 million for the same period in 2025. 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 8% for the three months ended MarchJune 31,30, 2026 as compared to 10%9% for the same period in 2025.

Depreciation and Amortization. Depreciation and amortization expense increased by $1.2 million, or 13%, to $10.7$11.1 million for the three months ended MarchJune 31,30, 2026 as compared to $9.5$9.8 million for the same period in 2025. 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 three months ended MarchJune 31,30, 2026 as compared to 4% for the same period in 2025.

Interest Income, Net. Interest income, net, increased by $1.3 million, or 77%,57%, to $3.0$3.5 million for the three months ended MarchJune 31,30, 2026 as compared to $1.7$2.2 million for the same period in 2025. 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 2025.

Change in Tax Receivable Agreement Liability. Change in tax receivable agreement liability decreased by $0.3$112.7 million to nil for the three months ended MarchJune 31,30, 2026. The decrease was associated with our initial recognition of a TRA liability upon realization of future tax benefits associated with the TRA during the three months ended MarchJune 31,30, 2025.

Income Tax Expense.Expense (Benefit). Income tax expense increasedwas by $14.5 million, or 286%, to $19.6$20.4 million for the three months ended MarchJune 31,30, 2026 as compared to $5.1income tax benefit of $115.0 million for the same period in 2025. Income tax expense isduring the three months ended June 30, 2026 was primarily attributable to the profitability of our foreign operations for which both current and deferred taxes are recorded.recorded Incomewhile income tax expensebenefit as a percentage of revenue increased to 5% forduring the three months ended MarchJune 31,30, 20262025 was primarily attributable to the release of a valuation allowance as comparedit tois 2%more forlikely than not that some portion of the samedeferred periodasset inmay 2025.be realized.

As of MarchJune 31,30, 2026, we had $330.6$339.9 million in cash and cash equivalents, excluding legally restricted customer cash deposits that 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.

Our current working capital needs relate mainly to supporting our existing businesses, the growth of these businesses in their existing markets and their expansion into other geographic regions, as well as our personnel’s compensation and benefits. We expect our material cash requirements during the upcoming 12-month period to include $12.4$13.4 million of non-cancellable purchase obligations with marketing vendors, $4.3$4.6 million of minimum license and market access fees, and $2.8 million of lease payments. We also have $47.9$46.6 million of additional non-cancellable purchase obligations that will be due subsequent to the upcoming 12-month period. In addition, we will continue to pursue expansion into new markets, such as our anticipatedrecent expansion into Alberta, Canada, which is expected to require significant capital investments.

We had been issued $31.2 million and $31.3 million in surety bonds as of MarchJune 31,30, 2026 and December 31, 20252025, respectively, that are used to satisfy regulatory requirements related to securing cash held for the benefit of customers.

We had been issued $6.5 million and $6.4 million in surety bonds as of MarchJune 31,30, 2026 and December 31, 20252025, respectively, to satisfy regulatory requirements necessary to operate in certain jurisdictions.

As of MarchJune 31,30, 2026 and December 31, 2025, we had no outstanding debt.

As of MarchJune 31,30, 2026 and December 31, 2025, we had an outstanding letter of credit for $6.3$9.3 million and $6.2 million, respectively, in connection with our operations in Colombia, for which no amounts had been drawn.

On October 24, 2024, our Board of Directors authorized the repurchase of an aggregate of up to $50 million of our Class A Common Stock through open market purchases, privately negotiated transactions or other transactions in accordance with applicable securities laws.laws (the “Stock Repurchase Program”).

During the three and six months ended MarchJune 31,30, 20262025, we repurchased 234,397 and 2025, the Company repurchased nil and 498,622733,019 shares, respectively, of Class A Common Stock pursuant to the Stock Repurchase Program. The aggregate purchase price was approximately $5.2$2.5 million during the three months ended MarchJune 31,30, 2025 and $7.6 million during the six months ended June 30, 2025, at an average price of $10.35.$10.55 and $10.41, respectively. The repurchased shares were re-issued under the Company’sour Equity Incentive Plan during the threesix months ended MarchJune 31,30, 2026. During the three and six months ended June 30, 2026, we repurchased 1,153,846 shares of Class A Common Stock pursuant to our Stock Repurchase Program. Class A Common Stock repurchased during the three and six months ended June 30, 2026 were immediately retired and were not held as treasury stock.

The following table shows our cash flows from operating activities, investing activities and financing activities for the threesix months ended MarchJune 31,30, 2026 and 2025:

Operating activities. Net cash provided by operating activities for the threesix months ended MarchJune 31,30, 2026 decreasedincreased by $8.6$17.7 million to $20.1$72.2 million, as compared to $28.7$54.5 million during the same period in 2025. The decreaseincrease was primarily brought by higher period-over-period net income totaling $15.5 million and increase in non-cash expenses of $20.0 million, which was partially offset by changes in operating assets and liabilities of $25.6 million, which was partially offset by higher period-over-period net income totaling $15.0 million and increase in non-cash expenses of $2.0$17.8 million. The increasedecrease in non-cash expenses was driven primarily by deferred income tax benefittaxes and additional depreciation and amortization totaling $3.2$131.3 million and $1.2$2.5 million, respectively, which was partially offset by decrease in share-based compensation expense and change in tax receivable agreement liability and share-based compensation expense totaling $2.1$113.0 million and $0.3$0.9 million, respectively.

Investing activities. Net cash used in investing activities for the threesix months ended MarchJune 31,30, 2026 increased by $1.6$2.8 million to $9.2$21.9 million, as compared to $7.6$19.1 million during the same period in 2025. The increase reflects increased costs for internally developed software totaling $1.1$2.6 million and additional acquisitions of gaming licenseslicenses, other intangible assets and property and equipment totaling $0.6$1.3 million, $1.1 million and $0.1$0.2 million, respectively. This was partially offset by higher cash inflow from short-term investments totaling $2.2 million and lower period-over-period acquisition of developed technology totaling $0.2 million.

Financing activities. Net cash used in financing activities for the threesix months ended MarchJune 31,30, 2026 decreasedincreased by $4.5$27.6 million to $22.7$61.5 million, as compared to $27.2$33.9 million during the same period in 2025. The period-over-period decreaseincrease primarily reflects decreaseincrease in repurchases of Class A Common StockStock, payments for employee taxes related to shares withheld and payments of tax receivable agreement liability totaling to $21.2 million, $6.3 million and $1.0 million, respectively. This was partially offset by decrease in principal payments of finance liabilities totaling to $5.2 million and $1.2 million, respectively, and increase in proceeds from exercise of stock options oftotaling $0.4$1.1 million.million Thisand was$1.0 partiallymillion, offset by increase in payments for employee taxes related to shares withheld of $2.3 million.respectively.

Effect of exchange rate changes on cash, cash equivalents and restricted cash. The effect of exchange rate changes increased cash, cash equivalents and restricted cash by $2.9$13.4 million for the threesix months ended MarchJune 31,30, 2026 as compared to an increase of $5.3$7.7 million for the same period in 2025. These changes were due to fluctuations in foreign currency exchange rates (primarily the Colombian Peso) from period to period.

There were no material changes during the quarter ended MarchJune 31,30, 2026, to the critical accounting policies and estimates discussed in our Annual Report. For a more complete discussion of our critical accounting policies and estimates, refer to our Annual Report.