Rush Street Interactive (NYSE: RSI) is undoubtedly one of the best-performing gaming companies of all kinds, having up about 41% year to date. On Wall Street, some people think that 2026 will be another year of prosperity.
Jefferies analyst David Katz raised his price objective for Rush Street to $30 from $27 in a report to clients on Monday, reiterating his "buy" rating and suggesting an increase of more than 50% from the shares' close on December 22. According to him, the removal of a burdensome tax in Colombia is one of the drivers that would propel the stock into 2026.
"RSI should see a considerable tailwind from the removal of the value-added tax (VAT) in Colombia at YE25, which drives our ~15% upward revision to FY26E adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA),” notes Katz.
Colombia announced a state of fiscal emergency in January. The following month, a presidential order imposing a 19% value-added tax on player deposits was issued, which negatively impacted operators' earnings.
Although Rush Street isn't as well-known as some of its bigger rivals on the US online sports betting (OSB) scene, the business may still profit from what Katz characterizes as a gradually expanding sector.
According to the analyst, data shows that OSB is expanding in this nation, with daily and weekly usage among betting-age adults rising since the beginning of 2022, despite Missouri being the only new state to open this year. Crucially, the range of participants is also expanding.
“While the increase has unsurprisingly been led by males ages 18-44 (up ~10pts from 1/22 to 11/25), we have also seen a ~5pt increase in 18-44 females, indicating that OSB may be reaching new demos not previously considered by investors,” observes Katz.
Regarding Rush Street and its stock, Katz notes that the management has "demonstrated reliability" and that the operator has been consistently profitable over the previous few years.
At a time when competitors DraftKings (NASDAQ: DKNG) and Flutter Entertainment (NYSE: FLUT) collapsed in part owing to prediction market news, RSI's 2025 performance is all the more unexpected and appealing.
By avoiding the conflict, Rush Street may be able to demonstrate to investors the advantages of an iGaming-first strategy that keeps it out of the reach of state regulators.
Richard Schwartz, CEO of RSI, stated earlier this year that the company is keeping an eye on the prediction markets sector. He pointed out that the company might profit if yes/no exchanges erode state gaming taxes because that might force certain jurisdictions to approve iGaming in order to increase their revenue.
