Super Group executives said on the company’s Q2 earnings call on Wednesday that they expect the cost of pulling Betway’s sports betting operations out of the U.S. market could reach nearly $50 million.
The company announced last month that it would be shutting down Betway’s online sports betting operations in the nine U.S. markets where it holds a wagering license in order to focus on iGaming growth in New Jersey, Pennsylvania and beyond. At the time, Super Group said the decision came after an extensive internal review determined there would be a long pathway toward profitability for its U.S. sports betting business.
On Wednesday, speaking on an earnings call after the company published its Q2 2024 results, Super Group CEO Neal Menashe said that the cost of the U.S. online sports betting exit “should not exceed” €45 million ($49 million). That includes redundancy costs, settlement of existing contracts and a maximum provision for the wind-down of the sportsbook product. The company noted the estimate is subject to change, and an updated number will be provided in the next quarterly update.
Menashe added that Super Group may explore opportunities to sell some of its vacated sports betting licenses to offset some of that cost.
“We are looking at the possibility of that, very much on a state-by-state basis depending on the number of access points and who’s active there,” he told investors and analysts. “It’s something we are considering… As contract negotiations are going on, there will be the possibility of recouping some investments.”
Executives will provide an update on that process when Super Group reports its Q3 numbers in the fall.
Betway’s U.S. shutdown is not being mirrored in Canada. The brand will continue to operate as a sportsbook in Ontario’s commercial market. Executives confirmed that the brand has eyes on Alberta and is “ready and waiting” to enter the province, which is set to open an Ontario-style open gaming and betting market.
iGaming the focus
With online sports betting out of the window in the U.S., Super Group’s priority is to grow its iGaming impact. It will operate two online casino brands from the Spin portfolio, including Jackpot City, in New Jersey and Pennsylvania.
President and CCO Richard Hasson noted on the call that across the company, around 80% of revenue is generated from iGaming. That fueled a record-breaking second quarter in 2024 that saw revenues increase 9% to hit €414.7 million ($453.3 million). The earnings release noted that was driven mostly by growth in the Africa and North America (predominantly Canada) markets. Super Group also reported a significant growth in monthly active customers to 4.5 million, a 21% increase from the previous year.
The majority, 66%, of the company’s Spin casino operations’ revenue last quarter came from North America.
Hasson and Menashe both stressed that if they see “appropriate opportunities” to expand iGaming in the U.S., they will assess them. For now, the focus is on making sure that New Jersey and Pennsylvania can be profitable.
“We’re going to treat each iGaming state, New Jersey and Pennsylvania, by themselves as a country and if we can see the path to profitability or not,” said Menashe. “We’ve just started, so we don’t look at the market share… We just have to get to a few million of revenue in each market to start making sure that market’s working.”
Overall, Menashe said Q2 was an “exceptional” quarter for the company, demonstrating “the exceptional progress we continue to make as a business.”
Super Group says its U.S. losses are expected to fall from €30 million to €20 million in the second half of 2024 in light of its online sports betting shutdown.
