Nginx if $arg rule 404ing requests, why? - nginx

Question

I have written the following rule in a nginx server block:
location /s/sport(/)$ {
if ($args ~ country){
rewrite ^(.*) /s/sport/country/$arg_country? break;
}
}
The goal here is to transform legacy URLs such as http://example.com/rankings/soccer?country=de to http://example.com/rankings/soccer/country/de. This could of course be implemented in the app itself, but we need to do it before hitting the app for performance reasons; these URLs break our caching strategy.
The trouble is when this rule is applied, the following URL formats start to 404:
/s/sport
/s/sport?country={iso_code}
/s/sport/country/{iso_code}
nginx reports that the request failed (2: No such file or directory) which leads me to believe that it is now looking for a physical file with that name instead of passing the path to the app.
How do I fix the rule?
EDIT: Here's the full server config I'm trying to add on to:
server {
listen *:80;
server_name example.com;
passenger_enabled on;
access_log /path/to/app/logs/access.log main;
error_log /path/to/app/logs/error.log error;
root /path/to/app/current/public;
location ~* \.(ico|css|js|gif|jp?g|png|swf)(\?[0-9]+)?$ {
expires max;
break;
}
if (-f $document_root/maintenance.html) {
return 503;
}
error_page 503 #maintenance;
location #maintenance {
rewrite ^(.*)$ /maintenance.html break;
}
}