Betway-owned Super Group is committed to investing heavily in the U.S. legal sports betting market, but when the global digital gaming company will see returns is unclear.
Based on Super Group’s latest third-quarter numbers release, the sports betting operator had a rough go because of soccer losses. However, it still invested $10.7 million into the U.S. market during Q3.
The current plan is to continue migration to the Betway platform in five of its nine remaining states before beginning a heavy U.S. marketing campaign to build customers in a highly competitive market.
"We are aware the U.S. market requires a significant investment to succeed. We are not afraid to invest. That has always been one of our strategies. We do this everywhere else in the world on a calculated, risk-adjusted basis to achieve a sustainable level of certainty apart from the return that we can generate."
- Super Group CEO Neal Manashe
Robust revenue
Overall, it wasn’t a great quarter in terms of sports betting for Super Group. The company saw its margins drop as soccer favorites reigned supreme in September and October, causing net revenue (ex-U.S.) to drop 28% from Q2 to Q3.
Super Group was able to offset those losses because of its strong iGaming performance and recorded Q3 revenue of $373 million, up 13% year-over-year. The operational EBITDA margin was 18% for the quarter.
Much of the company’s success came from Africa and the U.K. revenue, but it also recorded its first quarterly growth in Ontario to show positive signs in that market.
Super Group generated a record four million unique customers per month during Q2 and set a new mark for daily customers at 1.9 million in October.
Sportsbook users grew 45% year-over-year while casino customers went up 37%.
Guidance for 2023 has Super Group confident in reaching its yearly goals, but it’s aware that November and December can bring difficult margins to overcome.
“Our revenue is robust,” Manashe said. “Our customers are loyal and we have more of them than ever before. With a normalized sports (betting) margin, our growth should be really strong. Overall, we are winning.”
Investment plan
Betway’s online sports betting operation is currently active in Arizona, Iowa, Louisiana, Colorado, New Jersey, Pennsylvania, Virginia, Indiana and Ohio. Super Group acquired Digital Gaming Corporation earlier this year and is migrating all of those markets to Betway's technology.
That migration, projected to be complete by Q1 2024, is expected to make a big impact for the company in the U.S. market.
The sportsbook recently dropped its application to be licensed in Illinois, but that wasn’t a sign of less investment.
The plan going into the year was for Super Group to put $70 million into the U.S. market, and despite more than $40 million invested so far this year, the company expects to fall short of that overall number by $5-10 million.
