Good day, ladies and gentlemen. Thank you for standing by. Welcome to the Rush Street Interactive first quarter 2023 earnings conference call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. Please note that this conference call is being recorded today, May the 3rd, 2023. I would now like to turn the call over to Kyle Sauers, Chief Financial Officer. Thank you, operator, good afternoon. By now, everyone should have access to our first quarter 2023 earnings release that 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 and 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. A reconciliation of these measures to the most directly comparable GAAP measure is available in our first quarter 2023 earnings release and our investor deck, which is available in the Investors section of the RSI website at rushstreetinteractive.com. With me on the call today, we have Richard Schwartz, Chief Executive Officer. We will first provide some opening remarks and then open the call to questions. With that, I'll turn the call over to Richard. Thanks, Kyle. Good afternoon, welcome to our first quarter 2023 earnings call. We began the year with a terrific quarter. Revenues of $162.4 million were up 20% compared to last year. We achieved this revenue growth more efficiently with stronger-than-expected Adjusted EBITDA performance as we remain disciplined in how we allocate our marketing spend and managed our G&A costs. These results continue to support our view that online casino is a key driver for us in achieving our long-term goals. Our business model and focus is centered around our deep understanding of online casino customers and developing experiences that will engage and retain them. In markets where we operate both online casino and sports betting, we continue to see a significantly larger opportunity for top-line expansion combined with higher levels of profitability. Our strategic decisions consider our long-range objectives and our goal of delivering consistent and growing profitability for our investors. We continue to see the second half of this year as one where we expect to be Adjusted EBITDA positive. Our year-over-year growth was broad-based, with growth in both our iCasino and sportsbook-only markets. We grew revenue over 100% in Latin America and in North American markets launched after 2020. Internationally, we had an excellent quarter. Starting in Ontario, which is obviously an extremely competitive market, our handle continues to grow nicely, and we grew GGR by 33% compared to the fourth quarter. With improved efficiency on promotions, we increased revenue by 38% sequentially. Not to be outdone, we continue to perform very strong in Colombia. Revenue, once again, expanded at a very high growth rate year-over-year. In the first quarter, on a year-over-year basis in Colombian pesos, we grew by over 40% across the board, including in handle, GGR, and revenue. In U.S. dollars, we grew revenue 20%, reflective of the year-over-year headwinds in foreign exchange rates. Looking at Mexico, we remain focused on building our foundation in the market. Not much different than Colombia a few years back, we believe that our deliberate and measured ramp will support stable long-term growth and profitability in Mexico. We are continuing to localize the platform and user experience, which is especially important in this market, given there are several characteristics unique to Mexico. At the same time, we are building brand awareness and local market acumen by leveraging our partner, Grupo Multimedios. We continue to expect to see a ramp up in contribution from Mexico beginning towards the back part of this year. On the new market front, while no proposed new online casino legislation in the United States crossed the finish line, from our vantage point, the 2023 legislative session saw a significant amount of progress. There were more efforts and discussions across the country about online casino legislation than we've ever before witnessed. In fact, our count is that six online casino bills were introduced this year. Just last week, Ohio's House added language to its proposed budget to study the future of gaming, including online casino. This example and the progress being made in other states to legalize iGaming validates that regardless of the near-term outcomes, there are greater legislative efforts being made and momentum is growing. As we have mentioned prior, the facts are straightforward. The online casino market and even the online slot market by itself is significantly larger than the sports betting market in those states where both are legal. This means that we would expect the legalization of online casino in new markets to provide an outsized benefit to RSI, given that we often earn three to five times the market share in online casino compared to sports betting in those same states. I also want to touch on our recent announcement regarding the state of Connecticut. As I mentioned in my opening remarks, we are very determined to build profitability in a manner that makes sense for our shareholders. Towards that end, we announced a joint agreement to wind down our online and in-person sports betting partnership with the Connecticut Lottery. The lottery has begun an RFP process to pursue a new operator, and we are planning to continue to support that market until that transition happens, likely sometime in the second half of this year. The agreement with the Connecticut Lottery does not include any separation-related payments in either direction. While this wind down will have an impact on our future year's revenues, it will also have a positive impact for us on profitability in the coming years. We thought long and hard about this decision. Ultimately, we are staying true to our strategy. In any market, we have to see appropriate return on our investment. As the Connecticut market and partnership unfolded, it became clear that it was not the right fit for RSI, and our capital and resources could be used more efficiently elsewhere. When it comes to marketing, we remain disciplined in our strategy. We use a returns-based approach for customer acquisition and focus on attracting high-value customers to our platform. As forecasted, our marketing expenses came down considerably this quarter as we moved further away from our many market launches over the last couple of years. We expect the spending decrease to continue in the second half of the year. Turning to product and innovation, we continue to pride ourselves on our ability to differentiate and innovate. We have invested and continue to consistently invest resources to build efficiencies and improve the user experience. In addition, we constantly strive to bring new features to market. A terrific recent example of a new online casino experience is the announcement we made in early April about the launch of a first-of-its-kind online slot tournament in Michigan, aptly called the BetRivers Michigan Million. Players are given the opportunity to earn tournament points and experience the excitement of the tournament's real-time leaderboard. To qualify for the chance to win portions of $1 million in total bonus money, players in Michigan were able to visit BetRivers from April 1st through the 30th to register and play. We're having a nice reception to this unique experience with Michigan as our first test. We are excited to find new ways to increase player engagement in other markets with our differentiated online slot tournament engine. On the sportsbook side, we leveraged our unique feature, our proprietary Squares engine, during basketball with March Madness and the NBA. We've seen a really strong improvement in both average bet sizes and same-game parlays as a percentage of total bets. In fact, same-game parlays as a percentage of total bets have more than doubled since putting that promotion in place for NBA games. I want to congratulate the entire team at RSI for winning the Customer Service Operator of the Year at the EGR North America Awards event last week. This marks the fourth year in a row that we have won this prestigious industry award and is further validation of the cultural value we place in bringing world-class service and products to our customers. We also understand that trust is one of the biggest drivers for consumers in choosing an online gaming and sports betting company, that's why we automate our systems and empower our customer service teams to earn players' trust by finding ways to quickly resolve tension points for any player in need of support. With that, I'll turn the call over to Kyle. Thanks, Richard. First quarter revenue was $162.4 million, up 20% year-over-year, showing balanced growth throughout our business. Consistent with our strategy to invest more in markets with iCasino, monthly active users in those markets increased double digits year-over-year. In total, our MAUs for the first quarter in the U.S. and Canada were 147,000, up 3% year-over-year after excluding New York due to the impact of the launch in that state on last year's numbers. We continue to demonstrate our leadership position in player engagement and monetization with North American ARPMAUs coming in at $325 during the first quarter, up 23% compared to last year. Our ARPMAUs continue to remain very strong as we attract and retain high-quality players to the platform. Turning to profitability, our Adjusted EBITDA loss for the first quarter was $8.7 million, an improvement of 80% compared to the prior year, 50% better sequentially, and our best performance in the last seven quarters. We believe this puts us squarely on the path to positive EBITDA for the second half of the year. These results came in better than our internal expectations, largely as a result of lower expenses. Digging in a little deeper, advertising and promotions expense was $49.4 million for the first quarter, down 26% compared to the year ago period and down 22% sequentially. We remain committed to spending appropriate amounts by market for new players and monitoring their long-term value. In many of our markets, an increased effort is being shifted to retention and reactivation activities, which can be more cost-efficient. As we previewed on our last call, we expect Q2 marketing spend to be lower than Q1, but given our lower spend in Q1, not as big of a decline as we may have originally expected. We do still expect marketing to decline further in the second half from where we expect it to be in the second quarter. Gross margins improved around 800 basis points year-over-year, driven by higher margins in many of the markets where we're growing more quickly, as well as by some improvement as a result of the New York launch last year. As mentioned on our last call, we expect to see a full-year improvement of several hundred basis points in gross margin in 2023. Turning to G&A, costs increased 19% year-over-year and 10% sequentially to $14.7 million during the first quarter. While we continue to make investments in both our technology and corporate functions, we remain vigilant about monitoring costs and the way we invest to support our growth and innovation plans over the coming years. Having said that, we expect G&A costs to continue to trend higher as the year progresses. Our balance sheet remains in excellent shape, and we believe we're more than fully funded to profitability. We ended the quarter with $147 million in unrestricted cash and no debt. We're maintaining our full-year revenue guidance for 2023 of $630 million-$700 million. As a reminder, our guidance includes only those markets that are live as of today. As these results demonstrate, our strategy to focus on those markets that offer the highest returns, a disciplined marketing approach, and a modest approach to building our corporate costs puts us on the path to generating growing and sustainable profitability in the markets we've already launched and the ability to invest in new markets that offer strong return potential. With that, operator, please open the lines for questions. Thank you. If you would like to ask a question, then please press star followed by one on your telephone keypad. If you change your mind, please press star followed by two. When preparing to ask your question, please ensure that your phone is unmuted locally. As a reminder, that is star followed by one to ask a question. Our first question comes from Chad Beynon from Macquarie. Chad, please go ahead. Hi, good afternoon. Congrats on the quarter, and thanks for taking my question. First, I just wanted to ask about the Q1 revenue performance. Great to see the outperformance compared to where most were expecting. We've seen a few major players, obviously the one that has gained share in the quarter make some moves and that's a core part of their strategy. Always tough to tell where they're taking share from. I was wondering if you could just talk about, you know, how you saw some of your core big revenue, I guess, foundational pieces on the iGaming side perform during the quarter, particularly as we saw some more competition and kind of how that, you know, how that portends for future revenues in the year. Thanks. Sure. Thanks, Chad. I'll take that, Richard can add on if he'd like. Yeah, we were very pleased with the performance in Q1 on revenue for sure. It came in relatively close to our expectations. Obviously, we beat the analysts' numbers by a decent amount, which was good to see. I think our, you know, the performance across markets, across casino and sportsbook, it was pretty broad-based. No big surprises. You point out it's hard to know when share is shifting around, who it's coming from or where it's going to, so I don't have a whole lot to add there. As we highlighted in the prepared remarks, you know, Richard commented we had really strong growth in Latin America and in the North American markets that launched after 2020. Really not included in that group is Pennsylvania, Illinois, New Jersey. Those are more mature markets. Those make up more than half of our revenue. We're seeing really strong growth in all these newer markets. I think it point out that's where we don't necessarily benefit from the Rivers casinos and the brand known as well, so really good sign. Another promising piece there is that those markets that we're seeing the higher growth in, it's also where we have higher growth margins. That's been incrementally beneficial for us as you see in the gross margin improvement. Thank you. Then as a follow-up, again, on the revenue guidance, has anything changed just in terms of what you're underwriting for, dollar amount or timing of the launch in Mexico? I know you said second half is when we start to see that, but we're, you know, approaching that pretty quickly. Just wondering if everything is on track with where expectations were last time we spoke. Thanks. Sure, yeah. We haven't given any specific numbers on that, but you're right. That's what we've said and that's what we continue to expect is that we'll start to see results ramp a little bit more in the back half of the year. We're really excited about that market. But in terms of that impacting a guidance or a change in view there, no big changes. As you probably saw, we reiterated guidance, kept that the same. Mexico being a much smaller piece of it, but a piece of it, really didn't impact it either way, in terms of our thinking on the guidance. Okay. Thank you very much, Kyle. Appreciate it. Thanks, Chad. Thank you. Our next question comes from Jed Kelly from Oppenheimer. Jed, please go ahead. Hey, great. Thanks for taking my questions. Just, can you talk about how you're approaching, you know, new states that are coming on, as we get through this legislative cycle? Obviously, you're not participating in Massachusetts, but any thoughts on, you know, how it relates to, like, participating in Kentucky? Then, you know, you mentioned, you know, potential iGaming regulation. You sort of look what's going on with New York State, some of the lost tax revenue. Can you talk about the potential for iGaming momentum in that state? Thanks. Sure. Hi, Jed, this is Richard. I'll start and Kyle, you can add anything if you wish. In terms of markets, you know, we are always looking to direct our capital to get the best returns, staying very disciplined on where we spend the capital and what our expectations are for results. When it comes to a new market, every state or jurisdiction is looked at on a case-by-case basis, looking at the tax rates, looking at adjacent markets. We're looking at expected competitive intensity, opportunity for iGaming to be legalized in the near term versus long term in those markets. Then we look at data from our past launches to match our investments with our expected returns. At the end of the day, you'll see that, you know, our goal is to really make sure that we recover our investment relatively soon at a fast pace. We look at all the modeling and the subjective analysis of the various opportunities in a market. We make a decision whether to enter and pursue that market or not. That's what we've done in Massachusetts, and we'll be doing the same thing in Kentucky. In terms of New York, as you know, you know, states are looking at other states and watching the great tax benefit of legalizing iCasino, where, you know, 2/3 to 75% of revenues are being generated on taxes through those product vertical in both online sports betting and online casino are both legal in the same market. In terms of New York, we're excited that we have a beachhead there, one of the limited licenses there for sports betting. You know, we have mentioned before that profitability will be extended in that market for online sports betting alone on the basis of the high tax rate. Having said that, you know, that's an incredibly exciting market for us and the industry if iGaming was to legalize it. There are efforts, as you've read or heard, to legalize it this last year. There'll be additional efforts, I believe, being made again, in the next session. We're actively involved in those discussions and, you know, are advocating for online gaming to be legalized in that jurisdiction, given the size of the population and the fact that in that market, there's a Rivers brand that's already exist as a casino brand. When you add a casino product to a casino, a brand that's known as a casino in the same market, obviously it performs well. We're excited for that. Thank you. Thank you. Our next question comes from Bernie McTernan from Needham. Bernie, please go ahead. Hi, good afternoon. This is Stefanos Crist calling in for Bernie. Thanks for taking our questions. Just on the Ohio launch in Q1, anything different or unique that you saw? Anything we can take away from that? Thanks. Well, yeah, I would say that, you know, Ohio is a market where we, you know, large population, reasonable tax rate adjacent to a bunch of other states that we're operating in. We felt like we would, you know, as I said earlier, evaluate every state on a case-by-case basis, but it came out, you know, in a positive for us for some of those reasons. We were pretty modest in our efforts in terms of marketing, but we have changed our marketing promotions in a way that we think it serves us better and does get a return faster for us in sportsbook markets. We did launch there and, you know, we are, as you know, we're not really focusing on market share as a goal because our goal is to, you know, recover our investments as fast as we can and to be profitable long term. We are only spending, you know, just what we believe we can get a strong return on, and we're staying disciplined and not just marketing for the sake of marketing or trying to grow share in a market like that. To be able to make sure that when we spend on marketing in a launch situation like Ohio. That we are going to be able to get our return quickly. We send to economies that are appropriate for the cost to acquire the customers and make sure that the value they generate is above what we spend for them. That was the approach we took in Ohio. I think we've been happy with that more modest approach to one that, you know, has made a positive contribution for us, you know, sooner than some of the other markets in the past where maybe we had a different strategy. That's great. Thank you. I'm gonna squeeze in one more. In your slide deck, you talk about future potential opportunities in South America, in countries like Brazil, Argentina, and Peru. Any, you know possible timing or anything you can give us on that? Yeah, no, we love that region. We, as you know, we've had success in that markets with Colombia and Mexico. We're really continuing to evaluate different markets down there. Some are different states of legislation, some have legislation passed or regulations not yet published. Others, you know, have both and are relatively small markets that might take some more time to grow. We have a team that's focused on leveraging the strong technology and leadership and operations we have in that region to be able to extend to other markets. We wanna make sure we do it in a thoughtful way that's smart and long-term, delivering the value for us. That's a region that when you look at the populations of Argentina and Brazil, which is another example of a market that has regulated, legalized online sports betting, hasn't yet regulated it, but there are some efforts to do so. So you can imagine we're very involved and active in that region and constantly evaluating what the best opportunity is for us to invest to get to re-returns for our shareholders. That's great. Thank you for taking our questions. Thank you. Our next question comes from Daniel Politzer from Wells Fargo. Dan, please go ahead. Hey, good afternoon, everyone. Thanks for taking my questions. First, I wanted to touch on kind of the EBITDA cadence. I know you guys kind of reiterated the second half of the year should be EBITDA positive. As you look at back historically and just in terms of, you know, the seasonality component, typically, EBITDA improves, you know, from the second quarter relative to the first quarter. Given, you know, I think you printed $9 million of losses in the first quarter, is there any reason to think that that's not gonna improve significantly in the second quarter given, you know, there's a lighter calendar in terms of sports? Yeah, I think so. Appreciate the question, Dan. I think on the first part on the seasonality, there's been so many different launches during the last couple of years, that I think it's hard to make a lot of seasonality, and certainly for us, I couldn't speak for other companies, of course. I think a couple of things to think about. Last year, we had the launch of New York in the first quarter, which actually had negative revenue, and we spent a significant amount in marketing there. So that's a, that's a big change from Q1 to Q2. Maybe I'll wrap in thoughts on revenue cadence with profitability cadence. I think, you know, I mentioned before, I think our Q1 came in about where we expected it to. Things are trending how we'd expect so far this year, obviously still early in the second quarter. A lot of second quarter still to play out. I don't think it'd be unreasonable from seasonal perspective to see a little dip in revenue from Q1 to Q2, given NFL playoffs, Super Bowl, March Madness, all in the first quarter. Growth again in Q3 and in Q4. Thinking about that relative to EBITDA cadence, we did very well in Q1 from an EBITDA perspective, certainly versus analyst expectations and also versus our own expectations as expenses came in lower and our gross margins were a little better than expected. If, if you've got potentially lower revenue in Q2 than Q1, probably some modest amount, we'll see how it plays out. We're expecting to spend a little bit lower in marketing expenses in Q2 than we did in Q1. I think somewhere in the range of what we did in Q1, is fairly reasonable, for EBITDA. I think that's where, as a group, analysts are today. You, you pointed out and we were gonna reiterate it again on the call, we do expect to be profitable for the second half of the year. When thinking about the cadence, clearly we'd expect it to improve from the second quarter into the back half of the year. Got it. That's helpful. This is more of a high level question, right? I think that you made the decision to exit Connecticut. I'm sure there was a lot of considerations that went into that decision. As we take a step back and think about your broader footprint, your broader exposure, you know, the 15 states you're in and, you know, no iGaming getting past the finish line this year, are there other states you're evaluating, maybe pulling back, to the extent that that could, you know, accelerate your EBITDA and, you know, profitability? Right. This is Richard. Yeah, you know, we're comparing all opportunities globally, right? Whether it's South America, North America, Canada, U.S., existing markets, online sports betting only, existing markets with both, and evaluating where the best use of our corporate resources are, where we're gonna get the strongest return. So I think that, you know, our goal is to, as we said before, is to continue to improve our sportsbook experience, which we think we've done a really nice job of, and to improve the way we market and promote that product to ensure that we get to a point of profitability, growing profitability in the sportsbook-only market. As Kyle referenced, we did have a fast growth, you know, in the last several years after 2020, over 100% growth in the markets, where our newer markets, which most of those have been, online sportsbook markets. I would say that we are constantly evaluating the existing markets, new markets, and when we decide there's a change necessary, we will be happy to let everybody know. I think the only thing I'd add is I think that there's... it is an ongoing evaluation. This is not a point in time. I think Connecticut had some specific things about it that were very particular and made it the right move for us to exit that market. I wouldn't take that as a sign that there's a run on market exits in any way. It is a sign that we continually evaluate the opportunities and whether it's money well spent and whether the long-term returns are expected to be there. Understood. Thanks for the color. Thanks, Dan. Thank you. Our next question comes from David Katz from Jefferies. David, please go ahead. Hi. Evening, everyone. Thanks for taking my questions. I wanted to go just a little farther on with respect to Connecticut, where you talked about, you know, likely supporting them through the second half of 2023. Is there, you know, any sort of time limit, you know, on it? Just from the perspective that, you know, if you're choosing to exit, you know, it could potentially be hard for them to get somebody else and, you know, does that leave you in there for a period of time, you know, when you're obviously making a lot of progress in most other areas? Yeah. Without getting into all the details of our agreement, you know, the Connecticut Lottery, they've been a great partner. It probably didn't work out the way we all expected, and that's why we're exiting. There is not a specific timeframe. I know they're going through a process. They've made that public. We're planning to support them through a transitionary period. Obviously, we don't know what's gonna happen and who's gonna be their eventual partner. We'll make sure that it's working out appropriately for us and that we've got the right protections in place for ourselves, of course. I think we're in a good position now. We feel really good about about where it's set up to be for the remainder of the year and then certainly as we're done with it at whatever point that happens. Right. Just as my follow-up, with respect to iGaming, you know, we've seen, you know, such product evolution in sports betting. You know, that's a part of offerings and part of customer education. Richard, can you just talk about sort of how iGaming is evolving as a product and where you think that is and you know, where that puck is headed and how you're positioned for it? Sure. Thanks, David. You know, iGaming is an area I have a particular passion for and, you know, been in this sector for a long time. What's interesting is that in most cases, there's very little differentiation and innovation in the user experience for casino. The reason is simple: Most operators integrate content from third parties and perhaps innovate or exclusively license or develop your own in-house content to try to offer something unique. But in terms of actually creating really innovative, new to the industry experiences that players like and are gonna give you a reason to play with one operator versus another, I would say that we're in the very early innings of that, of that development. Although we are the leader in that space, and we have invested many years of developing unique features and functions in our casino experience. The players that play with our product realize really quickly that even though we might have some similar games to other sites, there's a whole lot of extra experiences that we've built in-house with a proprietary gamified promotional engine that creates an experience that's unique. We have a community chat room, players communicate with each other. We offer trivia games. We offer a real community tied up with other types of features that are unique to us and allow players to have incremental chances to win and play in fun games, whether it's a bingo game, a online slot tournament, as you referenced earlier, whether it's a bad beat bonus, where the players had a bad streak, we deliver an amazing instant award to them in a 3D graphic animated character, or whether it's scratch cards or wheel spins. We'd like to create fun, additional, functions on top of existing casino games, which does create experiences that are unique. I think that direction that we've taken and pioneered has a lot more growth ahead for it, and we're racing ahead with all kinds of exciting innovation and developments in that area as we try to grow our profits in our casino business. Perfect. Thanks very much. Thanks, David. Thank you. Our next question comes from Jordan Bender from JMP Securities. Jordan, please go ahead. Great. Thanks for taking my question. I wanna go back to the future potential opportunities. You know, some of your competitors are starting to, you know, look to Europe and expand their footprint there. You know, for you guys, your cash flow should start to inflect positive, you know, in the near future here. Is there any opportunity within Europe, either on the organic side or, you know, could you use your cash balance to kind of look to acquire something and start to grow your footprint in that market? Thanks. Sure. I mean, years ago, I started to run a business in the U.K., and I'm familiar with the European markets. Our Chief Operating Officer, Mattias, also was the chief commercial officer over one of the larger operators in Europe for almost a decade. We have a lot of knowledge and experience in the market, and we are always open and considering opportunities. The opportunity in the U.S. is extremely large, and what we think is gonna help us is to be very focused on the Americas. We think we have a head start in a lot of ways, and certainly in Latin America, in terms of the quality of the product, technology, operations, the way we operate down in that part of the world. As you're seeing, we're continuing to grow, share, and market to the U.S., you know, a market like Ontario or a very competitive market in West Virginia and others. We think there's ample opportunity for us to focus on the United States and North America and continue to grow there. While it's possible, we always will evaluate our, you know, organic opportunities elsewhere, we wanna remain focused on the opportunity ahead of us, which we think is very significant. Great. My follow-up, I don't think you touched on it, but the gross margin, you know, last call you said it should improve pretty significantly in the back half of 2023, you know, just given kind of the 34% gross margin you did in the first quarter. Should we still kind of assume that, you know, the back half of this year should improve materially over the first half? I think one of the things I mentioned, we probably expect a, you know, several hundred basis point full year improvement over last year, which, you know, puts the full year here in the range of 33%-ish. Our margins in Q1 came in a little better than we expected. Fortunately, as I mentioned before, we've had more of our growth in some of our higher gross margin markets. You know, it does come down to the mix between your different markets and how profitable each of those markets are, tax rates, and then also mix of casino and sports. We had a little bit of a beneficial mix in Q1. I do expect that the back half is likely to be as good or better than the first half. I'd also say the Q1 was a little better than I had originally expected. Great. Thanks for the color. Thanks, Jordan. Thank you. Our next question comes from Edward Engel from ROTH MKM. Edward, please go ahead. Hi. Thanks for taking my question. You maintained your 2023 revenue guidance. You also announced the pullback from Connecticut. Does that revenue guidance that you maintained factor in exiting Connecticut by the end of the year or does it not? Yeah. Really great question. you know, we don't know exactly when the Connecticut wind down is going to happen, as we cooperate with the lottery in that process. We're comfortable that the guidance as we have it today, that range includes different outcomes or time frames that wind down could occur under. The guidance does include exiting Connecticut at some point. I guess on back of that, does that kind of imply the rest of the business might be doing a bit better than what you initially thought? Yeah. I think it's, I think it's modest enough or the impact from Connecticut later in the year is not a dramatic impact on overall revenue. Certainly it has an impact on 2024 revenue, but depending on the timing it's not a substantial impact. In the most absolute of terms, yes, if some revenue's coming out of that bucket, that means that there's more revenue in some other buckets. Probably a little bit, yeah, there, but it's not terribly material. Perfect. Thanks. I guess a bit bigger picture, longer term, you kinda talked about high 20% margins this business kind of once we're kind of in a more mature state. Obviously, we're well far away from there. I guess in the medium term, especially just given it's hard to know when new states are gonna legalize iGaming, is it possible for you to kinda get to that 20-ish% margins with your current footprint, or do you need a lot bigger TAM and just more states to legalize to kind of even get close to there? Thanks. Yeah. I don't think I wanna pick certain points in time or exact number of markets. You know, clearly we saw some of that. Operating leverage this quarter, a good chunk of it, right? We expect to see more of that in the back half of the year. I've mentioned a couple of times already we're growing revenue faster in some of our higher margin jurisdictions. That's obviously good. We're seeing marketing expense come down as a percentage of revenue in many of our markets as they mature. We're still investing in our corporate G&A and technology teams, but we'll get leverage over that over the coming years as well. I think that to get to our target EBITDA margin, we'll need some additional markets to launch or enter into. Certainly, having them include casino will be important part of that. I wouldn't wanna pick, you know, exact point in time or how many. We will for sure make progress and consistent progress towards that goal, regardless of new markets launching, but it'll help when they do. All right. That's helpful. Thank you. Thanks, Ed. Thank you. Our next question comes from Mike Hickey from The Benchmark Company. Mike, please go ahead. Hey, Richard, Kyle. Thanks for taking my question. Guys, great job on your quarter. Just curious, I guess, one of your competitors here is seeking strategic alternatives to their U.S. business. It sounds like they've had some success there, some interest, and apparently they're pretty far along the process. They have access to 14 states. They have a product. I think some of the challenges that they have is, you know, resource constraints, the feeling that consolidation in the market here is inevitable, obviously profitability challenges. Just curious how you guys think about your current situation here in this environment and whether it makes sense or not to pursue perhaps a similar strategy, thinking sort of outside the box in terms of more aggressive alternatives versus staying sort of a independent but low-share operator with constraints on resources. Thanks, guys. Sure. Hey, I'll answer that question, Mike Hickey. You know, we're really proud of the business that we are developing. You know, we've invested $280 million in capital to get to a top five position in the U.S. market with a lesser-known brand, if we're being honest. You know, when you look at that, it's a pretty nice accomplishment. Having said that, you know, there are opportunities that we have to always look at, different partnerships and ways, approaches that might generate shareholder value in the future. I think we have to be open-minded about opportunities, but recognize that we have a clear path ahead. We have the capital to support that path, and we've been able to show that we've been able to grow and scale this business with substantially less capital than others have. We feel very confident in our ability to continue to grow. Thank you for that. The, I guess the follow-up, obviously you're pulling out of states here, that I guess from a high-level look, pretty important market share, you know, eventually thinking about sort of Massachusetts and pulling out of Connecticut. Obviously, that's been a challenging state, but there's only sort of three operators with you guys. I guess when you look at your business today, Richard, I think you were telling me you've got a great product. You've got access to all the key states. Now that's kinda going in reverse. I mean, is this simply a database challenge for you, a brand challenge? If so, is there an opportunity for you to sort of align yourself with the database, that can sort of complement the database that you have on the retail casino side to sort of, I guess, reset and drive business in online sports betting? Right. You know, and the first to admit it, going back to the brand that, you know, as I said just a minute ago, that we don't have the most recognizable brand nationally. Even it's not recognizable in some parts, some regions of the country. You know, it's certainly not the same level as some of our competitors. You know, what we've been able to accomplish with that, it comes down to the quality of the user experience, the product, customer service, and the way we treat our customers. One of the things is that great brands and business can be built over time. It's not usually immediate. When you have a very loud, high intensity, competitive environment, you know, sometimes it takes a little longer to build that brand because it's harder to get the attention. Although as we're seeing some of the intensity in terms of the volume of unique operators spending has declined a little bit. I would say that, you know, always having access to larger databases or a stronger brand or having more time to build that brand is certainly gonna help us be, deliver stronger results in the future. That's something that we're evaluating and constantly looking at ways we can improve how we're performing. I would say that we have some examples where we show that we've been able to grow, share in whether it's casino or even sportsbook markets, successfully. We think we have what it takes, certainly we have to be very strategic and smart about which markets we enter and which ones we don't. It doesn't really make a lot of sense for us to spend aggressively to enter markets at this point where you don't think iGaming is gonna be legal anytime soon, where you have a very large competitive intensity that's very intense, where you think you might get a very small share that might not be worth all the corporate effort to support and market at scale if you don't think there's a opportunity in the nearer term to shift to online casino in that market. Those are all factors that we look at. Do you wanna add anything else, Kyle? No, I think that's right. Thanks, guys. Thanks, Mike. Thank you. Our next question comes from Joseph Stauff from Susquehanna Financial Group, LLLP. Joe, please go ahead. Hey, Richard. Hey, Kyle. How are you? I had a couple questions just on iCasino ops. You know, is it fair to assume that, you know, Michigan and Ontario are really gonna be, say, the biggest growth drivers for results this year? That's my first question. The second question really is on Pennsylvania and New Jersey, which you described as more mature. You have a rebranding in New Jersey, I'm wondering, you know, if, you know, you reenter that market with the rebranding if you might be able to flip that into, say, more of a growth state. Yeah, I can start real quick. I think, for sure your point about Ontario and Michigan, those should be nice growth drivers for us. We talked about on the call, Latin America has been growing really nicely for us even in, you know, with pretty decent currency headwind for us in the first quarter here and still grew very nicely down there. There's also, we're also seeing some nice growth in some of our sportsbook only markets. I think it'll be a little more broad-based than that. There's opportunities to grow in a lot of the markets that we're participating in. What I had mentioned earlier was that some of these, a couple of the larger, more mature markets like Pennsylvania, New Jersey, Illinois, probably offer a little lower growth profile for us this year. Okay. When it comes to, you know, a market like Pennsylvania, we got off to a, you know, a strong start. It's unlimited licenses in that market, so, you know, the competition is growing as more entrants arrive. You know, our goal is to continue growing as we have been in that market, and to be able to continue to focus on those slot players that we think we built a lot of unique features to support to try to keep growing that part of the business because that's an area that we think plays very well to the product offering that we offer. In New Jersey, in terms of your rebranding expectations or strategy to possibly penetrate that market more? Yeah, we're certainly looking at that. The rebrand was necessary. We think it was the right decision. It does take some time to rebrand it because that brand had been there since the very beginning of our business. It was the first real money gaming market we launched in many years ago. It's gonna make it more efficient for us. It takes some time to establish the new brand, but we feel it's the right decision, and we think that with the efforts we're putting into the casino category, there's gonna be an opportunity for us to grow that market in the future. Thank you. Thanks, Joe. Thank you. Our final question comes from Ryan Sigdahl from Craig-Hallum. Hello, Ryan, please go ahead. Good afternoon, guys. Wanna start with, I know Connecticut talked a lot about the rationale for it, but there was rumors about a fairly significant minimum guarantee that you guys had there. Curious if you're willing to comment on that and if there's potentially any impact if, or depending on whoever takes over that contract? Yeah. Hey, Ryan. Thanks for the question. In terms of the second part of your question and what that means to, whatever next relationship happens that we're not part of, that don't really have any information on that. Won't have any impact on us either. Yeah, correct. Doesn't have any impact on us. As we mentioned in the prepared remarks, there was no separation fee in either direction, between us and the Connecticut Lottery. There was, as part of the initial announcement, when we entered into that agreement, there was up to $170 million over 10 years, that could go to the Connecticut Lottery from us. That would include payments to the state as well, dependent on how many retail locations were up and running, some other factors. That's. So whether that applies wholly, partially, not at all to the next participant, we wouldn't have any insight into that. I guess just a clarification, Kyle. That $170 million, is any part of that guaranteed, or was that just an estimate on revenue share over the 10 years? Yeah. It depended on a bunch of different factors, but there were guarantees as part of that, and that's what we don't have as an obligation any longer. Gotcha. Okay, second question. I don't believe you commented on MAUs, but it appears kind of 20% revenue growth, 23% ARPMAU, it implies MAUs were down year-over-year. I guess is that correct implication? Any commentary around that would be helpful. Thanks. Yeah. MAUs were 147,000 during the quarter, excluding New York. We had a large number of MAUs last year in New York. You might recall that impacted our MAU as well. Excluding New York, our MAUs were up 3% year-over-year. Including New York, they were down 3%. In markets with iCasino in North America, it was actually up 11%. In raw numbers, 147,000. Helpful. Thanks, guys. Good luck. Thanks, Ryan. Thank you. We currently have no further questions, so I'll now hand back over to Richard Schwartz for closing remarks. Thank you again for joining us today. We look forward to updating you on our progress when we share our second quarter results in a few months. This concludes today's call. Thank you for joining. You may now disconnect your line.