Prepared remarks
Good day, ladies and gentlemen. Thank you for standing by. Welcome to the Rush Street Interactive second quarter 2026 earnings conference call. All participants are in listen-only mode. A question-and-answer session will follow the formal presentation. Please note that this conference call is being recorded today, July 29, 2026. I will now turn the call over to Kyle L. Sauers, President and Chief Financial Officer. Please go ahead.
Thank you, operator, and good afternoon. By now, everyone should have access to our second quarter 2026 earnings release. It can be found under the heading Financials Quarterly Results in the Investors section of the RSI website at rushstreetinteractive.com. Some of our comments will be forward-looking statements within the meaning of the federal securities laws. Forward-looking statements are not statements of historical fact, are usually identified by the use of words such as will, expect, should, or other similar phrases, and are subject to numerous risks and uncertainties that could cause actual results to differ materially from what we expect. We assume no responsibility for updating any forward-looking statements. Therefore, you should exercise caution in interpreting and relying on them. We refer you to our SEC filings for a more detailed discussion of the risks that could impact our future operating results and financial condition.
During the call, we will discuss our non-GAAP measures, which we believe can be useful in evaluating the company's operating performance. These measures should not be considered in isolation or as a substitute for our financial results prepared in accordance with GAAP. We will be discussing adjusted EBITDA, which we define as net income or loss before interest, income taxes, depreciation and amortization, share-based compensation, adjustments for certain one-time or nonrecurring items, and other adjustments that are either noncash or not related to our underlying business performance. A reconciliation of these non-GAAP measures to the most directly comparable GAAP measure is available in our second quarter 2026 earnings release and our investor deck, which is available in the Investors section of the RSI website at rushstreetinteractive.com. For purposes of today's call, unless noted, when discussing profitability, EBITDA, or other income statement measures other than revenue, we are referring to those items on a non-GAAP adjusted EBITDA basis.
With me on the call today, we have Richard Todd Schwartz, Chief Executive Officer, who will first provide some opening remarks and then open the call to questions. And with that, I will turn the call over to Richard.
Thanks, Kyle, and good afternoon, everyone. Before I dive into our second quarter results, I want to take a moment to acknowledge that while Kyle and I have the opportunity to present these results each quarter, our continued success is driven by the exceptionally smart, dedicated, and experienced management team we work with every day, as well as our talented employees across the organization. I want to thank the entire team for all their hard work and dedication and for once again delivering record revenue and adjusted EBITDA, which continues our consistent track record of strong performance. I am particularly proud that we delivered our fastest quarterly revenue growth in over four years, even while operating from a significantly larger revenue base. We generated revenue of $394 million, up 46% year over year, and adjusted EBITDA of $64.6 million, up 61% year over year. Our results this quarter reflect the continued strength of our casino-first strategy, disciplined execution across operating regions, alongside a well-planned and strongly executed World Cup period.
Our casino-first approach remains the foundation of our business model. Online casino continues to be our primary value driver, with sports betting and poker serving as important complementary products to drive incremental profitability, brand awareness, and bring new players into our ecosystem. Online casino continues to be our fastest-growing product segment in both North America and Latin America. This quarter, online casino represented 72% of our revenue, with online sports betting contributing most of the remaining 28%, a mix that continues to support the consistent engagement, higher lifetime values, and stronger retention that come with our casino players. Player growth remained strong across both regions. Monthly active users in North America grew 51% year over year to over 296 thousand, with growth in our North American online casino market reaching 64% year over year. In Latin America, which includes Mexico, MAUs grew 62% year over year to over 652 thousand.
Across the company, we again delivered record first-time depositors and continue to deliver attractive player acquisition costs, reflecting the ongoing advancements in our brand awareness and marketing efficiency. We just finished a month of exciting World Cup soccer, and I am incredibly proud of our teams and the results we produced. There was incredible effort and execution that went into our marketing programs, player engagement and operations, merchandising our offerings in a compelling way to our players, and of course, ensuring our technology performed fast and reliably at record volumes. The end result was very successful outcomes, both in terms of near-term financial impact and, more importantly, impressive acquisition and reactivation efforts, especially in Latin America. In June and so far in July, our monthly active users in Latin America are up over 80%. Another good sign is that more than 25% of our new first-time depositors that joined us during the World Cup have engaged with our casino product as well.
This is about 50% higher than what we saw during the Copa America two years ago, so this is an encouraging sign and validates that the work we have put into improving the cross-sell flows has delivered positive results. When it comes to the specific results, both handle and hold came in very nicely for the World Cup in June. In fact, Q2 was our highest sports hold in Colombia since inception, driven by solid World Cup results. In North America, we also had our highest sports holds since inception, driven by both NBA playoffs and positive World Cup results. This was not just good outcomes; it is a reflection of an improving product and an improving mix of parlays and prop bets that drive higher hold. Turning to the political situation in Colombia specifically, in June, Colombia held its widely anticipated presidential election, with the winning candidate scheduled to take office at the end of next week.
We believe that his pro-business agenda will provide a constructive backdrop for our industry and for the broader operating environment in the country. These policies appear to be in stark contrast to the existing and opposing party. To be clear, the results of this election have no impact on our reported numbers or guidance today. The new government's broader review of prior tax decrees and future budgeting decisions remain outstanding. Therefore, consistent with our prior earnings call, our full-year guidance continues to assume that the 16% GGR tax remains in effect through year end. We will keep you updated if there are changes on the regulatory front within Colombia. We are also excited to announce that we successfully launched online casino and sports in Alberta on July 13th, and while it is still very early days, we are encouraged by what we have seen so far. As a reminder, Alberta is transitioning out of an unlicensed market, so consistent with our experience in Ontario, expect this to be a gradual build.
On a population-adjusted basis, first-time depositors and daily active users are currently tracking at approximately two times the levels we saw in Ontario at the same point following launch. It is, of course, very early, but we are excited to watch the Alberta market build over the coming quarters. Moving on to the topic of prediction markets: this past quarter, we filed an application for a CFTC designated contract market license. As we have stated previously, we continue to operate with a casino-first focus and do not intend to lean into the crowded sports-focused prediction market space. However, the prediction markets landscape is highly dynamic, and we will continue to monitor developments in the space. This filing ensures we have the flexibility to navigate all possible outcomes. As we look to the second half of 2026, we remain confident in the strength and continued durability of our business.
We are executing well and taking market share across our core markets. We are off to a strong start in Alberta, a market with meaningful long-term opportunity, and we see continued significant growth ahead in the other markets where we operate. With that, I will turn it back to Kyle to discuss the financial details.
Thanks, Richard. Let me walk you through the details of our second quarter performance. Record second quarter revenues of $394 million represent 46% year-over-year growth, a continuation of our accelerating growth and a new watermark for our fastest growth rate in over four years. This performance was driven by strong execution across all of our business, particularly in our two areas of primary focus, online casino and Latin America. Gross margins for the quarter came in at 35.5%, a continuing improvement reflecting our faster growth in higher-margin markets, but still negatively impacted by the temporary tax in place in Colombia. Marketing efficiency continues to be a key component of our success, with marketing expenses of $48.6 million in the quarter, an increase of 34% year over year and representing 12.3% of total revenue compared to 13.4% in the prior year period. As Richard mentioned, we continue to see attractive player acquisition costs alongside strong player growth.
Therefore, we expect to continue investing marketing dollars throughout the second half of the year, particularly as we ramp in Alberta. In fact, because our efficiency continues to improve even as we have been scaling up, we now expect to spend more on marketing than previously planned in the second half. We have always said when we find strong ROI opportunities, we will increase our marketing spend. G&A for the second quarter was $26.5 million, or 6.7% of revenue, compared to 7% in the prior year period. As previously discussed, while we are achieving leverage over this line item, we have been increasing our investments in people and technology in 2026 to support our growth. Turning to profitability, adjusted EBITDA reached a record $64.6 million, representing 61% year-over-year growth and 16.4% margins. We continue to demonstrate scalable profitability expansion through the operating leverage built into our business model.
Additionally, while our year-over-year adjusted EBITDA growth remains strong, it is worth noting that on a sequential basis, Q1 had the benefit of no extra tax in Colombia for about 2.5 months during the constitutional court's reversal of the prior emergency decree, whereas Q2 and the remainder of 2026 assume a 16% VAT in Colombia. For context, that benefit in the first quarter was around $7 million. Net income for the period was $29.3 million compared to $28.8 million in the prior year period, representing a 2% year-over-year increase. User acquisition and retention continue to be key pillars of our success. As Richard mentioned, our user growth this quarter hit record levels once again, while also setting another record for first-time depositors. In North America, monthly active users grew 51% year over year to over 296 thousand, with MAUs in online casino markets growing 64% year over year.
In Latin America, MAUs grew 62% year over year to over 652 thousand. North American ARPMAU was $320 in the second quarter, down 18% year over year but up modestly from the first quarter. As we discussed last quarter, this reflects the impact of our player acquisition levels. Newer player cohorts start at lower value than our established base, but we continue to see this as both healthy and consistent with our historical experience as these cohorts mature over time. In Latin America, ARPMAU was $55, up 82% year over year, reflecting continued strength across the region, the elimination of bonusing in Colombia to offset last year's VAT on deposits, and favorable movements in the Colombian currency. Breaking down our performance by geography and product, we saw continued strength across all areas. In the second quarter, online casino revenues grew 40% and sports betting revenue grew 64%. Regionally, revenue in North America grew 23% in the second quarter, and revenue in Latin America grew 195%.
Growth remained broad-based across regions and products, and we continue to see the benefits of the brand awareness and player loyalty that we continue to build. Our balance sheet remains strong with $340 million in cash on hand as of June 30th, and we still have zero debt on our books. In May, we completed a secondary offering of which we repurchased approximately $29 million worth of shares under our $50 million share repurchase program, and in addition, our board authorized a new $100 million share repurchase program, which allows us to continue to be opportunistic with share repurchases. Now turning to guidance. We now expect revenue in the range of $1.56 billion to $1.6 billion, representing year-over-year growth of 38% to 41%. At the midpoint of $1.58 billion, this represents a $65 million increase from our previous guidance and 39% year-over-year growth. This increase reflects continued share gains in North American iCasino, sustained outperformance across Latin America, and a well-managed World Cup period.
For adjusted EBITDA guidance, we now expect it to be in the range of $245 million to $265 million, representing year-over-year growth of 59% to 72%. At the midpoint of $255 million, this represents a $15 million increase from our previous guidance and 66% year-over-year growth. This is inclusive of our plans to further lean into efficiency by increasing our marketing investments in the second half of the year. We are pleased by the continued strength of our business. We are growing both rapidly and profitably, and we remain confident in our ability to deliver on our full-year guidance. And with that, operator, we are ready to take questions.
Questions and answers
We will now begin the question-and-answer session. Please limit yourself to one question and one follow-up. If you would like to ask a question, please press *1 to raise your hand. To withdraw your question, press *1 again. We ask that you pick up your handset when asking a question to allow for optimal sound quality. If you are muted locally, remember to unmute your device. Please stand by while we compile the Q&A roster. Your first call is from Bernard McTernan from Needham. Your line is open. Please go ahead.
Great. Thanks for taking the questions. I just had a question on the World Cup customers that you were acquiring. Any thoughts — I know it is early days, but any thoughts on the LTV of those customers maybe versus customers you were acquiring previously? And then I have a follow-up.
Yeah, it is a good question, Bernie. I think you are right that it is probably too early to tell for sure. Certainly, you are going to have some players who are joining just for the cultural moment and the excitement around their country and their team, but I think we have proven in the past that in events like this we can bring people in, get them excited about the platform, and keep them around. We mentioned in the prepared remarks that we had really good success early on with cross-sell in Latin America over to the casino side, quite a bit more so than we did in Copa America a couple of years ago. So we are really excited about that. But, you are right, it is pretty early on.
Okay. Understood. And then I wanted to double-click on the marketing commentary in the second half of the year, now investing more than previously planned. Can you just dive into that a little bit more? Is that all Alberta or anywhere else that you are spending? Thank you.
Yeah. Good question. I think, as you already know, we have increased marketing pretty significantly this year. I think we are up for the whole first half maybe around 25% to 26% so far. But as the data we have continued to share shows, the results are really, really strong out of our marketing teams and the strategies they are using. So we just feel like it makes sense to push harder. The player values are still really good. We have continued to push our cost to acquire players lower. Certainly, there is more spend because of Alberta and because of that launch a couple of weeks ago, but really what we were referencing in the call is that we are going to push harder on spend in other markets where we see opportunities. We are going to, as we always have, move quickly and be dynamic. So if something is not working, we will probably pull back, and at the same time, if other things are working really well, we are going to lean in further. Maybe to put a number around it — we are going to remain flexible — but sequentially from Q2 to Q3 we might spend something like $7 million to $10 million more on marketing in Q3 compared to Q2, and that is inclusive of the Alberta launch.
Understood. Thanks, Kyle.
Your next question is from the line of David Katz at Jefferies. Your line is open. Please go ahead.
As a reminder, please remember to unmute your handset. And if we go to the next person operator, we will circle back to David.
Your next call is from Zachary Silverberg at Wells Fargo. Your line is now open. Please go ahead.
Hey. Good afternoon, and thank you for taking my question. In the press release and some of the management commentary, you mentioned that you continue to see meaningful long-term opportunities ahead of you to drive shareholder value. Can you maybe quantify or qualify some of that and provide some color on what those opportunities might be?
Yeah. Hey, Zach. It is Richard. I think two areas I would focus on are clearly that a large percentage of the population in North America is not yet legal for online casino, and Alberta just launching on July 13th represents a meaningful new opportunity for us. Within existing markets where we are operating today, I think because historically our brand did not have the same high awareness as some of the other brands we compete with, there is a large percentage of the population in these jurisdictions that have not really had their first experience with us. When they do have it, it is a positive experience for the most part, which is why we have been able to deliver the type of results where we are growing share and getting exposure from new players to our platform for the first time in many cases. So we are really excited to continue to grow share in our existing markets. Also, there are the other parts of the U.S. population where online casinos are not yet available — we see opportunity for legalization over time. Then when you bring Latin America into the view, all the jurisdictions down there that are legal and regulated that we have not entered yet are exciting. So we are excited by all the opportunities ahead of us.
And the only thing I would add is that this will drive the top line, which is obviously key to success, but as we have been doing for several years now, we would expect to be able to get leverage over all of our different P&L line items as we continue to grow.
Got you. Appreciate that. And just for my follow-up, maybe if you guys have any updated view or outlook on the potential legalization landscape. We have heard from one of your peers that they are kind of expecting Virginia, D.C., obviously we know about Maine, Maryland — maybe just any commentary on that would be great. Thank you.
Sure. For us, each new online casino market is meaningful. We are working hard, as we have said in the past, to try to educate legislators and improve the pace of legalization. We remain optimistic with a long-term outlook for iGaming and believe jurisdictions will legalize over time. One of the key drivers will be the reduction in federal support and some increased fiscal responsibilities for states over the next two fiscal years. That will create more pressure on funding gaps, and we think reductions in major social programs in many states, including some very large population states like Illinois and New York, are going to create opportunities for a greater emphasis on new and sustainable sources of recurring revenue. We believe that will drive discussion around proven revenue-generating policy proposals like online casino legalization. Between that and the timing you referenced, we think momentum can build. In terms of specific states, Virginia progressed furthest during the 2026 legislative sessions and each chamber passed its own authorization bill before they failed to reconcile it. There will certainly be another effort next year. D.C. is an active opportunity. Indiana and Ohio are other markets we have an eye on, and we are monitoring and being active when possible to try to accelerate adoption there.
Thanks for all the color. Appreciate it.
Your next question is from the line of Jed Kelly at Oppenheimer. Your line is now open. Please go ahead.
Hey, great. Thanks for taking my questions. Just circling back on MAUs — are you seeing any change in CAC or what is going on with the spending? And can you just talk about more where your North American MAUs are coming from? Is it more slots-first, or are you adding more success with some of your sports-first customers that might be more table-game centric? Thanks.
Good question, Jed. The reality is our cost to acquire players has continued to go down. Most of our spend in North America has been in the markets that include iCasino, and a lot of that is slots-first creative. Obviously, we welcome all kinds of players and we are catering to table players as well, and we are still doing quite well in sports. But most of it is casino-first and the cost to acquire players has continued to go down, and player values continue to hold up as well. That is the primary reason we are going to be spending more in the back half — there is a lot of opportunity there.
Got it. And then just as a follow-up, kind of looking at sports that are getting most of the prediction market share, tennis I think is doing about two times the amount of baseball. Do you have any insight on what is going on there, and are you seeing certain pockets of your sports handle maybe down because it is going more to a sharper player or anything you are seeing in tennis in particular, if there is anything to call out? Thanks.
I do not think we have anything to call out there that we have seen as a big change, but it is an interesting observation.
Thank you, and good job.
Your next call is from David Katz from Jefferies. Your line is now open. Please go ahead.
Hi. Thanks. Good evening. Appreciate you coming back around. It was a misunderstanding with the mute button. I wanted to just go back to the retention of these high volumes of players that you are capturing during the World Cup. Richard, in your prepared remarks you talked about the ability to cross-sell them over to casino being 50% higher than from Copa. If we look out into the future, your ability to retain those people in your system over time — is there any perspective or any data you can give us to that end?
I think it is challenging to have a great comparable to this event. The World Cup was in the right time zones this time around for people in the Americas to watch and engage in a much more meaningful way. Our business has changed dramatically since the last World Cups, even since Copa, which was more of a LATAM event for us. In North America, we had really good engagement; it was more about reactivation and using the World Cup as a pop culture event to engage people across the platform. In Latin America, it was a really big player acquisition opportunity for us, and we are pleased with how that turned out. One thing I will point out is that after Copa, even though it is not the greatest comparable because we are so much larger at this point and the product is better, we saw a nice inflection after Copa in our casino volumes down in Colombia. We are certainly hoping to capitalize on a similar situation this time around. So good early signals, but too early to give too much detail.
Understood. And if I can ask one follow-up from a longer-term nature: I noticed some of the other Latin American countries that you have listed as potential future opportunities in your deck over the last couple of quarters. How far away are those, or what are the gating factors for those to become a reality?
As you can imagine, we are very thorough and focused on making sure we pick the right markets to enter and do so in the proper way where we are prepared for success. There are markets down there that are legal and regulated that are exciting, but we have to balance that with the growth we are experiencing in our existing markets and be thoughtful about how we invest in additional markets. There are efforts going into additional expansion in other markets down there, but it is not something we are prepared to share details on at this time.
Okay. Thank you very much.
Your next question is from the line of Daniel Politzer from JPMorgan. Your line is now open. Please go ahead.
Hey, good afternoon, everyone. Thanks for taking my question. First, I want to touch on the prediction market application you filed with the CFTC. You mentioned you do not intend to lean into the crowded sports area. Can you talk about what this allows you to do specifically? Do you envision yourself as a taker or a maker? Is this kind of just a way to give optionality? How are you thinking about this medium to longer term?
We view the application as a way to preserve our strategic flexibility and maintain our optionality. It ensures we are not caught flat-footed should the market or regulatory environment evolve in a way that becomes relevant for our business. It is really about being prepared and preserving optionality.
Okay, great. And then can you talk about what you are seeing in terms of the competitive environment within iGaming? You have been acquiring a lot of users. Have you seen any incremental competition or wallet impact from prediction markets in Michigan or any other states?
On prediction markets, we do not believe we are seeing an impact. It is hard to know for sure. On competitive intensity, it depends on the number of operators in a given market. There is solid competition. Some new competitors have entered in a couple of our markets, which increases competition. Some competitors have recognized that iCasino is a great place to focus and have talked about putting more effort there, but all the while, we have been consistently growing market share for four straight quarters. We are proud of that.
Understood. Thanks so much.
Your next question is from the line of Ryan Sigdahl from Craig-Hallum Capital Group. Your line is now open. Please go ahead.
Hey, good afternoon, Richard and Kyle. I want to double-click on the World Cup activations, starting with reactivations in North America. Given the strong 25% cross-sell to iCasino you mentioned, was there specific focus on players that had higher potential to play casino, or was it more broad-based? And then secondly on Latin America activations, was there specific player targeting for those more likely to play iCasino?
Just to clarify, that data point Richard gave — the 25% cross-sell — was related to Latin America. There were a lot of different efforts and different styles of marketing trying to attract different types of players. We definitely leaned into sports-first and World Cup-first approaches in the Latin American markets and had a lot of success with that.
Yeah. Just on the reactivations in North America: if there was a specific focus on players that had gone inactive but had higher potential to play casino — how did you focus activation or reactivation on iCasino players?
It was across the board. When you think about reactivations, you know who the people are and you have information about them so you can tailor the message and the creative to them based on what you know about their past experiences and interests. So it was kind of all of the above.
Very good. Just a quick follow-up, Kyle: the increased marketing spend, that is pure marketing spend through OpEx, right? Curious how you think about promotions in conjunction with that.
Yes, that increase is intended to show up in the marketing line on the P&L. From a bonusing perspective, the more new players we are bringing in, that can have an impact on bonusing. We have continued to refine our bonusing strategies and adjust them as we go. It is different depending on the market, the rules, how taxes are affected by bonusing, and how players engage with bonusing. Sequentially, bonusing is down in Q2 compared to Q1, up a little bit year over year. We pay a lot of attention to bonusing to make sure the right bonuses go to the right people. Outside of incremental bonusing related to new players coming from extra marketing, I would not expect a big change in bonusing strategy other than typical seasonality heading into the football season.
Great. Nice job. Thanks.
Your next question is from the line of Michael Hickey at Stonex. Your line is now open. Please go ahead.
Hey, Richard, Kyle. Congrats, guys. Awesome quarter. First, Kyle, on the second-half revenue and EBITDA cadence post-Q2 here, how should we think about the relative cadence of revenue and EBITDA between Q3 and Q4 given your raised numbers for the year?
Good question, Mike. First, Q2 was aided by strong sports hold, which benefited revenue by around $10 million. So after you net that out of Q2 results to think about the sequential look going forward, at the midpoint of our guidance, I would expect Q3 revenue to be relatively flat with Q2. Excluding that $10 million benefit, Q3 being up by around $10 million over Q2 is the way I think about it. Like we typically do, we would expect a real nice uptick in revenue from Q3 into Q4. For EBITDA cadence, if revenue is kind of flat from Q2 to Q3, and we are talking about additional marketing spend in Q3, particularly with the Alberta launch and increased marketing than previously planned, it is likely that Q3 EBITDA will be the low quarter of the year for us, with Q4 being a sizable step up in EBITDA due to much larger revenue and moving away from Alberta launch costs. That is largely in line with what analysts are already modeling given our previous commentary and historical results.
A few components to help with modeling adjusted EPS: depreciation and amortization is probably around $47 million for the full year; stock-based compensation expense is around $30 million for the year; interest income around $12 million; tax expense around $74 million; and a fully diluted share count of around 237 million. At the midpoint of guidance and using those numbers, that gets you to about $0.62 in adjusted EPS for the year, subject to the usual range of outcomes.
Nice. Thanks, Kyle. Maybe Richard too — on your 2027 growth opportunity, what do you think are the most important drivers that could help you sustain that double-digit revenue growth from your current base? And how much further can you take EBITDA margins or how should we think about those shaping up? Also, how should we think about the World Cup as a comp into 2027?
I'll take the World Cup comp piece first: it is a comp element because it added significant soccer schedule to the year, and we had nice hold, so that affects comps next year. With the rest of our growth profile and the number of players added and reactivated through the event, that will help push through tougher comps. On 2027 and beyond, it is a little early for full guidance; we will provide 2027 guidance in a couple of quarters. A few things to think about: we are in a growth industry and have consistently taken share in North American iCasino, so we feel good about taking our fair share of industry growth. In North American sports, we would not expect as much growth from us because that segment has slower growth and we are not investing as heavily in sports-only markets. Latin America markets where we are live are growing nicely and we believe we are taking share in those markets, which should be significant growth drivers. As we grow more quickly in higher-margin markets, the revenue mix alone should improve gross margins. Even adding the investment in Alberta, we would expect to get leverage over marketing spend and G&A next year. The wild card would be if one or two new U.S. states legalize and launch iGaming next year, which would change the profile but would be welcomed.
Nice. Thanks, guys. Good luck.
Your next question is from the line of Joseph Stauff at Susquehanna. Your line is now open. Please go ahead.
Good evening, Richard and Kyle. Your North American active growth is impressive. Can you talk structurally about how this pays off in terms of ARPMAU? If you normalize your level of marketing, how should we think about ARPMAU progression? Does a new customer acquired in Q3 contribute at a corporate ARPMAU level a year later — basically details on how an iCasino new customer ramps in spending?
Without getting into exact numbers, Joe, it is a good question. First, I would say it is already paying off given our growth across the business — added players are driving a lot of growth. Regarding progression of value by cohort: the longer players stay with us, the more valuable they become, and retention improves dramatically. There is a natural falloff for players acquired early on but their value builds over time. In iCasino, payback is faster than in sports — at least that has been our experience. If our player growth slows at some point, which is natural when you are growing at a high clip, you are more likely to see ARPU increase as the cohort mix matures. We pointed out that ARPMAU improved a bit sequentially, and importantly, this is the first second quarter in six years where we had a higher player count in North America in the second quarter than in the first quarter, which shows the strength of our casino-led growth not dependent on sports seasonality.
I appreciate that. And just to clarify on Colombia, you had mentioned a pathway — is there a constitutional court pathway active similar to the last time to review the tax?
Yes. The current temporary tax will be heard by the constitutional court, and there is always a possibility they rule against it, which could change the tax impact for us.
Okay. Thanks very much, guys.
Your next question is from the line of Jordan Bender at Citizens. Your line is now open. Please go ahead.
Hey, everyone. Thanks for the question. You have had a ton of success in Latin America under the RushBet brand. Would you ever look to bring that to the U.S. to cater to the Spanish-speaking population here?
Jordan, it is a conversation we have internally from time to time and something we have considered. A multi-brand strategy is something operators should consider. For us, it comes down to timing to address multiple brands in the same market. Some jurisdictions are easier to have multiple brands and some are more challenging, but we do see an opportunity to cater to Spanish-speaking Americans who might prefer a site native to their preferred language.
Great. Thank you. Just a follow-up: the incremental marketing costs in Q3 come at a time when the sports betting industry typically spends a ton heading into the NFL season. Is the increase in marketing a reaction to anticipated spend, or is it truly driven by the customer economics you are seeing?
Zero of it is reactionary to what others are doing. It is all about the player economics and the economics around acquiring those players and how successful we have been. We feel we can spend more and do so at attractive rates based on the improvements in our marketing programs and technology.
Understood. Thank you.
Your next question is from the line of Chad Beynon from Macquarie. Your line is now open. Please go ahead.
Hi, afternoon. Thanks for taking my question. Just one on prediction markets related to what you saw at the end of the second quarter during the World Cup and maybe into the third quarter: we have seen lots of data on prediction market volumes, mostly in the U.S. where you do not participate. Just wondering if you could add any commentary if you believe that in the U.S. markets where you have sports betting — roughly 28% of your business — you have seen decelerating volume trends or anything to help us think about the trajectory of online sports betting into the back half?
I will start: we have not seen that impact, but it is also true we probably do not have perfect visibility into it. The fact that we are not focusing on new player acquisition in sports-only markets and are doing as well as we are in sports relative to peers suggests we are not being impacted much by prediction markets.
I would add that we are not catering to the sharp customers in the way prediction markets might, so that is another factor.
One other clarification: while you referenced 28% of revenue from sports, keep in mind that a significant portion of that, maybe more than half, is coming from Latin America, so that is not at risk in the areas you are referring to.
Thank you both. Appreciate it.
There are no further questions at this time. We have reached the end of the Q&A session. I will now turn the call back to Richard Todd Schwartz for closing remarks.
Thank you again for joining us today. We look forward to updating you on our progress when we share our third quarter results in the fall.
This concludes today's call. Thank you for attending. You may now disconnect.