Super Group to cease US igaming operations
The company’s Spin online casino unit will complete its withdrawal from the market.
US.- Super Group, the parent company of online sports betting and gaming business Betway and online casino Spin, has confirmed that it will cease US igaming operations. The company said it made the decision following a comprehensive evaluation of its global priorities, the evolving regulatory landscape and the US unit’s financial performance.
The group has already decided a year ago to close sportsbook operations in the nine states where it was live, reducing US operations to just two igaming brands from its Spin portfolio, including Jackpot City in New Jersey and Pennsylvania.
Neal Menashe, chief executive officer, stated, “This is a difficult decision, particularly because our US team has worked hard and made progress over recent quarters. Nonetheless, recent regulatory developments combined with ongoing assessment of capital allocation requirements have led us to believe that our stringent hurdle for return on capital will likely not be met in this market any time soon.
“We therefore intend to focus capital and resources on markets where we see the greatest opportunity for scalable, sustainable, profitable super growth, with a disciplined emphasis on operational efficiency.”
Alinda Van Wyk, chief financial officer, added: “Various strategic exit options are under consideration. We are still early in the process but nonetheless would expect to incur a one-time cash restructuring cost of approximately $30m – $40m in connection with such an exit and are actively pursuing multiple efforts to minimize the impact thereof. Further details regarding these potential costs will be shared during our second quarter earnings release.”
Super Group also provided an update on second quarter performance citing revenue growth across all markets driven by strong sports results, improvements in pricing models, more efficient risk management, a full calendar of sporting events and record deposit levels. The Group raised Ex-US guidance to over $2bn in revenue, up from $1.9bn. Adjusted EBITDA is now expected to surpass $480m compared to the prior guidance of $457m.
Menashe commented: “We are very pleased with our performance in the second quarter, reflecting continued momentum and discipline across our core markets and further validating the strength of our operating model and brands. We remain focused on driving profitable and sustainable growth through consistent execution and continue to be super-confident in the long-term growth potential of our business.”
The Group will host an Investor Day in London on September 18.
