As we move through 2025, gaming and betting companies are showing dramatically different results, painting a picture of an industry experiencing both tremendous growth and significant challenges. Online operators are hitting record numbers while traditional brick-and-mortar establishments work through various obstacles, creating an interesting landscape for investors and industry watchers alike.
Rush Street Interactive Celebrates Record-Breaking First Quarter
Chicago-based online gaming operator Rush Street Interactive (RSI) has kicked off 2025 with an impressive financial performance that has investors smiling. The company reported Q1 revenue of $262.4 million, jumping 21% compared to the $217.4 million earned during the same period in 2024.
What’s really turning heads is RSI’s profitability turnaround – posting a net income of $11.2 million for Q1, a complete reversal from the $2.2 million loss recorded in early 2024. This improvement showcases how online gaming operators are increasingly figuring out the perfect balance between growth and profitability.
The company’s adjusted EBITDA performance was even more impressive, nearly doubling year-over-year with a 95% increase to $33.2 million, up from $17.1 million in Q1 2024. And they achieved this while keeping marketing costs under tight control – expenses in this area increased by just 3% to $38.8 million.
RSI’s player engagement metrics tell an equally positive story. Monthly active users in the US and Canada grew 17% to approximately 203,000, while Latin American user numbers exploded by 61% to reach 354,000. Average revenue per monthly active user in North America showed modest growth of 3%, reaching $368, though Latin American revenue per user decreased to $36 from $44 the year before.
The company also returned value to shareholders by repurchasing $5.2 million of Class A common stock under its authorized $50 million buyback program.
Customer Experience Driving RSI’s Success
Chief Executive Officer Richard Schwartz points to the company’s focus on player experience as the key driver behind these strong results.
Schwartz explained:
We’ve started 2025 with strong momentum, building on our success from recent years. Our first quarter revenue increased by 21% year-over-year to $262 million, and our Adjusted EBITDA reached a record $33 million, nearly double that of Q1 2024.
He attributes this success to RSI’s “commitment to innovation and enhancing the quality of our player experience, alongside efficient acquisition and retention of high-value players.” The company’s online casino division has been particularly strong, providing a stable foundation for continued momentum.
RSI remains confident in its trajectory for the remainder of 2025, maintaining its full-year guidance with expected revenue between $1.01 billion and $1.08 billion. At the midpoint, this represents approximately 13% growth over 2024. Similarly, the company upheld its adjusted EBITDA forecast in the range of $115 million to $135 million, suggesting 35% growth at the midpoint compared to the previous year.
Expanding Partnerships Fuel Future Growth
The company continues to strengthen its market position through strategic partnerships. In March 2025, Inspired Entertainment announced an expanded collaboration with RSI that will introduce iGaming content to new markets in Mexico, Colombia, Peru, and Delaware, building on their successful launches in New Jersey, Michigan, and Pennsylvania.
Brooks Pierce, President and CEO of Inspired, expressed enthusiasm about the partnership:
Rush Street Interactive has already established itself as a premier operator and a significant customer of Inspired, and we look forward to the expansion of our partnership.
Earlier in January, RSI welcomed RubyPlay to the US online casino market through a strategic partnership marking RubyPlay’s American debut starting in New Jersey. The collaboration includes an exclusive portfolio of premium slot games designed specifically for American players, with plans to expand to 15 titles and move into additional states including Pennsylvania, Delaware, Michigan, and West Virginia.
RSI has also partnered with EveryMatrix to bring exclusive casino content to West Virginia, further extending their technology and gaming reach in regulated US markets.
Star Entertainment Faces Significant Challenges
While RSI celebrates its success, Australian casino operator Star Entertainment Group is navigating much rougher waters. The company reported an EBITDA loss of A$21 million ($13.41 million) for the quarter ended March 31, 2025 – a dramatic reversal from the A$38 million profit recorded during the same period last year.
Revenue figures reflected similar difficulties, with quarterly earnings dropping by 35% to A$271 million compared to the previous year. However, the company did manage to reduce operating expenses by 3% from the previous quarter through lower corporate costs and volume-related reductions.
Several factors contributed to these disappointing results, including seasonal downturns, declining casino visitation, and Queensland property closures caused by March storms. These challenges have piled onto the already troubled Australian gambling operator.
The financial position has become concerning enough that Star warned of “material uncertainty” regarding its ability to continue as a going concern, highlighting the need for several critical initiatives to bolster its liquidity.
Rescue Plan and Future Outlook
In response to these challenges, Star Entertainment secured a A$300 million (approximately $191.5 million) rescue package from US-based Bally’s Corporation and the Mathieson family, Star’s largest investor. In June, shareholders will vote on a portion of Bally’s investment that would give the US casino group control of 56.7% of Star. The company emphasized that completing this strategic investment is vital to its survival and ranks among its top near-term priorities.
Despite these difficulties, investor sentiment showed some resilience, with Star’s shares rising 2.4% to A$0.1075 following the announcement, outperforming the broader benchmark index’s 0.2% increase.
Star Entertainment Group operates as one of Australia’s leading integrated resort companies with properties including The Star Sydney, The Star Gold Coast, and The Star Brisbane, employing more than 8,000 people across these locations7. The company also manages the Gold Coast Convention and Exhibition Centre on behalf of the Queensland Government.
Strategic Restructuring Underway
On March 7, 2025, Star announced an agreement to exit its equity interest in the Destination Brisbane Consortium Integrated Resort joint venture (DBC) and consolidate its position on the Gold Coast, including a transfer of interests of certain Brisbane and Gold Coast assets between the joint venture partners and Star. Under this agreement, Star is not required to make any further equity contributions to DBC beyond March 31, 2025.
Prior to this announcement, Star had made equity contributions to DBC of $26 million during the quarter. This strategic restructuring represents an effort to stabilize the company’s financial position and focus on its most promising assets.
Industry Dynamics Shape Different Outcomes
The contrasting fortunes of Rush Street Interactive and Star Entertainment reflect broader industry trends. Online gaming operators and crypto casinos continue to benefit from increasing digitalization of entertainment, regulatory expansions in key markets, and consumer preference shifts toward convenient, accessible gaming options.
Meanwhile, traditional casino operators face headwinds including increased competition, rising operational costs, weather-related disruptions, and changing consumer behavior patterns. This creates a two-speed gaming industry that will likely persist through 2025 and beyond.
For online operators like RSI, expansion opportunities remain abundant. The US market continues to evolve as more states consider legalizing online gambling, while Latin American markets represent significant growth potential due to high mobile penetration rates and evolving regulatory frameworks.
Traditional casino operators like Star Entertainment face a more complex path forward, requiring strategic restructuring, capital investment, and adaptation to changing consumer preferences. The entrance of US gaming operators like Bally’s into the Australian market signals potential industry consolidation and cross-border investment that may reshape the competitive landscape.
Technology continues to drive innovation across the industry, with online operators investing heavily in mobile platforms, payment solutions, and user experience enhancements. Traditional casino operators are increasingly adopting digital technologies to improve operational efficiency and enhance the guest experience, blurring the lines between online and offline gaming experiences.
The divergent performance of these two segments highlights how companies must understand and adapt to specific market conditions, regulatory environments, and consumer trends to succeed in today’s rapidly evolving gaming landscape.
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