Betway owner reports ‘smooth’ transition to province’s iGaming marketplace
Super Group is hoping for a similarly smooth debut in Ontario’s regulated online gaming market for the company’s Spin brand.
The Betway owner says he’s had a “smooth” transition to the regulated online sports betting market in Ontario and is aiming for the same soon with his online casino brand.
Guernsey-headquartered Super Group said on Thursday that second-quarter revenue fell to 320.8 million euros, from 355.2 million euros in the same period last year , a decrease of 10%.
Adjusted profit before depreciation, amortization, finance income, financial expense and income tax expense for Super Group, the holding company of Betway online sports betting and Spin online casino, fell 30% for the three months ended June 30, at 63.6 million euros.
But there was also positive news for Super Group. The average monthly number of customers increased by 3% to 2.7 million in the second quarter of 2022, compared to 2.6 million in the second quarter of 2021.
Super Group has also been able to retain customers in Ontario, where it was previously a “grey market” operator before becoming officially regulated and relaunching Betway in the province on August 1.
“We have maintained a smooth licensing process in Ontario with Betway transitioning to the regulated regime with Spin which will follow next week,” Super Group CEO Neal Menashe said on a conference call for analysts on Thursday. and investors.
Sports betting delivers
Despite the slight disappointment resultsMenashe chose to focus on the company’s global model strategy, strong cash position and expected revenue growth now that its flagship brands are rolling out in Ontario after regulatory delays.
“Canada is our biggest sports betting market,” he said after the second quarter results were released. “We saw good growth in key markets such as Africa and Asia-Pacific. [and] our sports betting continued to generate positive growth.”
In response to an analyst’s question, Menashe revealed that Betway’s early Ontario numbers were encouraging.
“[Results from] Betway in the last seven to eight days [are] met our expectations,” he said. “So Spin go next week [and] we learned a lot from Betway…[which] we can implement.”
Betway was one of the largest operators of the so-called “grey market” in Ontario gaming before moving to the regulated online sports betting market in the province.
Menashe, a native of South Africa who now lives in London, was also confident that expanding operations and adding new customers in Ontario would not be a drain on the company’s finances, in the same way that the balance sheets of major sportsbooks remained in the red due to massive advertising and promotional campaigns.
“Given regulatory restrictions on public premium advertising in Ontario, we do not expect to see the same level of unsustainable price competition that has occurred in the United States,” Menashe said on the conference call. of Thursday. the regulations will benefit us in the medium to long term, and we hope to see the regulations being introduced in the other provinces of Canada in due course. In the meantime, we will continue to trade as before, and expect Canada to continue to support our 20-year track record of consistent profitability and cash generation.”
Take an overall goal
Like nearly every other sports betting CEO who has pondered the impact of the current inflationary climate on earnings, Super Group’s Menashe was cautiously optimistic about the outlook for the future.
“Despite the impact of the normalization of post-COVID entertainment spending patterns and the current adverse effects of general economic uncertainty on discretionary spending…Super Group’s balance sheet remains strong,” he said. during Thursday’s call.
Additionally, in February of this year, Betway announced that it had entered into a major brand licensing agreement with DGC to launch sports betting operations in the United States. Betway will eventually go live in ten states as it gains regulatory approval.
“DGC will be a great addition to Super Group in the US market,” Menashe said.
In his closing remarks to industry analysts, the Super Group boss expressed confidence in his firm’s conservative business model, which has seen it run out of debt and undertake select acquisitions as a niche player in various global markets in Europe, Asia and North America.
“We generated a good level of revenue and EBITDA for the quarter and we remain in a unique position in the global online gaming universe,” he said. “We are digital only, we have a diverse global footprint in sports betting and iGaming. We control our technology stack, our data and our algorithms.”