Super Group: Early positive Canada signs after regulated market transition

Super Group is seeing early positive signs in Canada from its switch to the Ontario regulated market during the third quarter.
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Super Group has declared it is seeing early positive signs in Canada from its switch to the regulated market in the province of Ontario during the third quarter.

The positive Canada indications come despite the group reporting a 2% loss in overall Q3 revenue year-over-year to $315.81m, as sports betting income was not able to mitigate a decline in online casino net revenue and brand license fee income.

Positive Canada after regulated market switch

During Super Group’s Q3 earnings call, CEO Neal Menashe highlighted the group’s performance in Canada, noting that its online sportsbook Betway and casino Spin operations have been “in line with expectations” so far and that Ontario remains profitable for the group following the transition to the regulated market.

Menashe said on the call: “In Canada, we successfully transitioned Betway to Ontario’s regulated environment. 

“Our performance there has been in line with our expectations, including the excavation and engagement of historic Ontario customers with the new Ontario-specific platform. Overall, Canada continues to perform and remains profitable for us.”

Meanwhile, in the US, Menashe stated that Super Group hopes to close the acquisition of Digital Gaming Corporation in January, adding that Betway is expected to go live in Louisiana and Ohio in Q1 next year.

In terms of expansion across the US, Super Group intends to only enter states “that will provide opportunities for long-term growth and profitability”. Currently, it is operational in seven states with market access in up to 12 states.

Super Group Q3 financials

As previously mentioned, Super Group reported overall Q3 revenue of $315.81m, a 2% drop YoY (Q3 2021: $320.74m) due to “a decline in online casino net revenue and brand license fee income” that was “partially offset by an increase in sports betting net revenue”.

Betway generated 54% of all net revenue during the quarter with $173.2m (2021: $165.6m), while Spin operations produced the remaining 46% with $142.6m (2021: $155.1m).

Per vertical, sports betting produced $107.36m in revenue (2021: $93.77m), online casino operations earned $201.71m (2021: $209.72m), while brand licensing achieved $5.58m (2021: $17.05m).

Per region, North America led the way with 40% of the total revenue generated, standing at $126.2m (2021: $136.2m), followed by Africa & Middle East with $71.93m (2021: $65.28m), Asia-Pacific with $70.27m (2021: $77.04m), Europe with $39.42m (2021: $33.02m), and Latin America with $7.97m (2021: $9.17m).

Super Group’s monthly average customers for the quarter grew by 7% to 2.7 million (2021: 2.5 million) excluding customers of Jumpman Gaming which was acquired on September 1, 2022.

Menashe commented: “Super Group’s online-only business model and ongoing focus on improved customer experience through enhanced global technology platforms continues to ensure optimal customer engagement and value. 

“Together with effective investment in our brands and efficient allocation of our capital, this provides us with a sound path for long-term growth.”

Super Group’s adjusted EBITDA for Q3 decreased 26% YoY to $57.56m (2021: $77.88m), its profit after tax was $35.81m (2021: $51.81m), while cash and cash equivalents were $272.92m as of September 30, 2022.

Alinda van Wyk, CFO of Super Group, added: “Super Group remains financially strong and we continue to optimize our global footprint and operate more efficiently to leverage our scale. 

“We remain focused on investing into technology and marketing, as well as other opportunities that will provide us with long-term growth and profitability.”

During the earnings call, van Wyk also reaffirmed Super Group’s 2022 full-year guidance of total revenue between $1.18bn and $1.28bn, and operational EBITA between $205m and $221m.