Rush Street Interactive (NYSE: RSI) reported remarkable returns this week, with the stock rising by almost 5% (as of Friday midday) following the announcement that a gaming tax that had hindered the company's activities in Colombia had been overturned by the country's Supreme Court.

President Gustavo Petro issued an order at the beginning of the year that established Colombia's value added tax (VAT) system for online gambling. It was a component of a larger set of emergency tax measures intended to increase income, many of which circumvented the nation's parliamentary branches. Petro used another emergency decree earlier this month to extend the gaming tax through the end of 2026. The tax, which was equivalent to 19% of net gaming revenue, was set to expire on December 31. That plan was abandoned by Colombia's high court.

"The end result of the back and forth is a positive for Rush Street in one of the highest growth markets for the company,” said Citizens Equity Research analyst Jordan Bender in a note to clients. “Net gaming revenue was materially impacted during 2025 as the company, along with the majority of the industry, gave compensation back to players for the VAT tax applied to deposits, suppressing net gaming revenue despite the company growing gross gaming revenue >50% during the year.”

Rush Street Interactive shares are rated "market perform" by Bender.

The Significance of Colombia's Tax Situation for Rush Street Interactive

To put it simply, Rush Street's profits were negatively impacted by Colombia's tax system. That's significant in any country, but for the operator, it's especially crucial because Colombia is one of the fastest-growing markets in an area crucial to Rush Street's long-term success.

Bender points out that the tax would have "normalized" gaming revenue at a pace that might not have pleased investors if it had stayed in place. He continues by saying that there is "material upside" to Rush Street's earnings before interest, taxes, depreciation, and amortization (EBITDA) predictions when the tax is removed and using 2024, the final year prior to the levy's implementation, as the model.

“We estimate EBITDA is now closer to $269 million for 2026E, compared to our $227 million estimate and consensus of $209 million,” says the analyst. “We are not adjusting for the tax change at this time given the uncertainty around the political and legislative back and forth.”

On February 17, Illinois-based Rush Street Interactive will present its quarterly results. The Colombia tax issue is probably going to be covered on the conference call that follows.

According to Bender, Rush Street shares are fairly valued

Over the past few years, Rush Street has been consistently successful. In the US, it concentrates more on iGaming than online sports betting, mainly avoiding the very competitive and expensive aspect of the latter sector.

Additionally, this has prevented the stock—which has increased by 24.34% in the last year—from being punished by the prediction markets. Bender maintains that the name's existing value is reasonable.

“Shares are trading at 15.5x consensus 2027E EBITDA, representing one of the most expensive names across the gaming, lodging, and leisure space, and above historical premium multiples across international gaming markets,” concludes the analyst. “Our 18x multiple on 2027E now exceeds well-capitalized operators, and we see more value (at these valuation levels) from well-established peers.”