Monday, July 22, 2024

Super Group To Leave U.S. Sports Betting Marketplace

Must read

Super Group, the parent company of the sportsbook Betway, announced Wednesday it will be leaving the U.S. sports betting marketplace to focus its energies on internet casino gaming in New Jersey and Pennsylvania.

“As a global business, we constantly evaluate the optimal use of our resources across all markets in which we operate,” Super Group CEO Neal Menashe said in a statement. “We have recently concluded an extensive review of our U.S. operations and, at present, we do not see a long-term path to profitability for the sportsbook product.

“The vast majority of Super Group’s revenue is generated in iGaming and, in line with that strategy, we will continue to offer our leading casino product in New Jersey and Pennsylvania. We are open to expanding our U.S. footprint if the right investment or strategic opportunities arise.”

Betway is currently offering mobile sports betting in nine states, and New Jersey and Pennsylvania are the only two where internet casino gaming is also available for wagering. Super Group did not offer a timetable as to when Betway would fully exit the sports betting marketplace.

It had also twice applied for one of three online-only mobile sports betting licenses available in Illinois but withdrew from the process on each occasion. The second time it withdrew was last October after being named a finalist for the $20 million license nearly 12 months ago.

Limited Levels of Success in Sports Betting

Among the six states where handle and gross revenue are available, it was clear Betway had not made much headway in terms of obtaining market share beyond Pennsylvania, where it also has an iGaming platform. The $25.6 million in handle accumulated since entering Arizona in February 2022 accounted for less than 0.2% of the $14.8 billion wagered through sports betting apps there.

Arizona was the only state where Betway topped $2 million in total gross revenue, but it did have a 10.7% hold through its first 17 months in Ohio while claiming $1.4 million in winnings. It posted a middling 6.5% win rate in Virginia but struggled against the betting public in the Keystone State, Iowa, and Indiana, failing to attain a 3% hold in all three.

Sign Up For The Sports Handle Newsletter!

Additionally, in states where promotional revenue was available this year, Betway’s spend was notably cutting into its gross winnings. It had a 9% hold this year in Arizona, but the $437,936 in promotional bonuses and credits represented 66% of its $662,500 in winnings.

Betway could not deduct promotional offers in Ohio, but the $240,236 spend was nearly 66% of its $365,900 in year-to-date revenue.

Because of internet casino gaming, Betway did not have promotional spend in Pennsylvania for mobile sports betting after entering in June 2021, and it had a 2.7% hold on $51.5 million in handle to generate close to $1.4 million in winnings.

Exit Costs Not Expected to Impact Plans

Super Group noted it expects to incur costs and charges across the multiple jurisdictions where it conducts sports betting. It said that, “Such costs and charges, while not insignificant, will not have any impact on Super Group’s previously communicated capital allocation or operating plans.”

Super Group expects to further detail its exit costs and charges at its next quarterly earnings call to be held in August. It was trading at $3.16 on the New York Stock Exchange as of 11:15 a.m. EDT on Wednesday, practically unchanged from its opening at $3.17.

Latest article