Super Group, the owner of Betway and Spin sportsbook brands, provided a business update last week, which included an announcement that its deal to acquire long-term partner Digital Gaming Corporation (DGC) will officially close in January 2023.
The closure date reflects a small delay from the company's previous announcement that the DGC purchase would be finalized prior to the end of this year.
The acquisition of DGC, first released in April 2021, allows the UK-based Super Group to establish a major beachhead in the U.S. legal sports betting sector, where DGC has access to 12 states, including New Jersey and Pennsylvania — two of the largest American markets.
News of the closing was made public on Friday when Super Group gave investors an advance snapshot of expected Q3 earnings. The operator reiterated previous guidance that it was on track to post full-year revenue of between €1.15 billion ($1.15 billion) and €1.28 billion ($1.28 billion) for 2022 while it forecast FY EBITDA of between €200 million and €215 million.
This forecast maintains the previous revenue and earnings guidance provided by Super Group when it reported second-quarter earnings in August. The company will release its full Q3 earnings report on November 22.
The company also confirmed that it had successfully transitioned its operations for sports betting sites Betway and Spin into the Ontario-regulated market during the second half of 2022, where it hopes to become a major player.
Apricot ripe for the picking?
Meanwhile, Super Group also revealed that Betway is actively negotiating with Apricot Investments, the parent company of Microgaming — Betway's longtime sportsbook tech provider — to "materially increase the dedicated development resources available to Betway as the exclusive licensee of its sportsbook."
Neal Menashe, CEO of Super Group, declared that the operator was committed to its expansion plans but also intends on improving its bottom line by bringing Betway's tech in-house. The company has taken an initial step towards realizing this goal by taking an option to acquire a copy of the Microgaming sports betting platform.
"We are taking steps to strengthen Super Group, simplify the capital structure, and better position the company for growth," Super Group said in a press release. "In relation to discussions regarding our sportsbook, we are exploring with our long-term partner the potential benefits of ownership of the technology."
Under terms of the proposed agreement, Betway would boost its investment expenditure in Apricot's software development over the next several quarters. This additional capital outlay could take the form of a loan of up to a maximum amount of $43 million to defray costs relating to Apricot's upgrading of Betway's existing iGaming and sports betting platform.
Betway expansion on the way
During its FY2021 report in February, the Super Group announced that it was still continuing its ambitious U.S. expansion for Betway via a licensing arrangement with DGC that allows Betway to go live in all states where DGC is active — including the five already active markets in New Jersey, Pennsylvania, Colorado, Iowa, and Indiana.
This means that in the not-too-distant future, Betway could be up and running in as many as 12 states, in addition to Ontario.
The completion of the DGC deal will permit Super Group to become the latest operator to try to gain traction in an increasingly competitive U.S. market that is likely to see a number of smaller players exit several states — either by choice or by force — as the big sportsbooks (FanDuel, DraftKings, Caesars, and BetMGM) — have taken a stranglehold on market share.
Nevertheless, the company indicated in its Q2 earnings report in August that it was actively considering select acquisitions to solidify its strategic ambitions of becoming a "niche player" in iGaming markets spanning Europe, North America, and Asia.
Jump(man)ing further in UK market
Finally, Super Group announced that it had taken a majority stake in Jumpman Gaming, a UK online casino business. Jumpman boosted Super Group's net revenue by €7 million and will be adding positive EBITDA when Q3 earnings are reported later this month.
"This acquisition provides additional opportunities for Super Group in the UK, as well as other international markets into which Jumpman can expand using its proprietary technology," read the statement.
The company also stated that earlier Super Group earnings guidance for 2022 did not include the results of Jumpman.