Super Group is set to pursue three online gambling licenses in New Zealand in anticipation of the upcoming licensing auction by the Department of Internal Affairs (DIA). The company, which has been operating its Betway brand in the region for some time, reported a 14% year-over-year increase in revenue for Q2, despite a reduction in marketing expenditures.
CEO Neal Menashe noted that this growth contributed to a 6% rise in revenue in the ‘rest of world’ segment compared to the previous year. Following an earnings call on Wednesday, CFO Alinda Van Wyk explained, "We’ve been operating in New Zealand for many years and it already has quite a significant tax regime. At the time of the re-regulation, there was a lot of noise around marketing; we didn’t market there because you don’t want to fall into the trap of a bad actor."
Van Wyk confirmed that Super Group intends to apply for three of the 15 licenses available for tender. The government of New Zealand opened its expression of interest (EOI) window in July, providing operators the chance to acquire a license in a market projected to launch in 2027. Operators can apply for a maximum of three licenses, and currently, Entain, which manages the TAB sports betting monopoly, has also expressed intent to seek three licenses. The requirement for operators to demonstrate access to at least NZ$7.5 million in capital indicates the government's strategy to attract a limited number of financially stable and established operators.
In the UK, Super Group faced inquiries during the earnings call regarding its market position. While the company does not break down its UK revenue in its results, it reported a 19% revenue increase across Europe year-over-year, reaching $132 million. Menashe stated that Super Group is gaining market share in the UK since the Remote Gaming Duty tax hike was implemented in April.
"We’re not a major player in the UK, so there’s a lot of market share we are getting," he remarked. Van Wyk added that marketing strategies are returning to pre-adjustment spending levels, which she described as a positive development. "By optimizing marketing to become efficient in the way we operate in that market, we’ll deliver better margins in that jurisdiction," she explained.
Recently, Super Group concluded a significant sponsorship agreement with Manchester United, aimed at enhancing its brand visibility in the UK and worldwide, especially in Africa. Van Wyk noted in an interview after the call that the group is in a strong position in the UK market.
Regarding potential acquisitions as smaller operators reassess their strategies in the UK, Van Wyk expressed, "Somewhere down the line, I 100% believe that there would also be some operators we could plug market share into our business. We’re quite excited."
Despite the Betway brand historically emphasizing sports betting, Van Wyk pointed out an ongoing focus on improving the online casino product. Recent initiatives have centralized the operator’s tech and product platforms, and together with marketing efficiencies, they have boosted World Cup casino cross-sell to 50% of new customers.
As for financial projections, Super Group has adjusted its full-year revenue guidance to exceed $2.6 billion, up from the previous estimate of $2.55 billion, with adjusted EBITDA expected to surpass $710 million. For the latest quarter, adjusted EBITDA reached $204 million, an increase from $157 million in 2022. Profit also experienced a substantial rise to $123 million, compared to a loss of $3 million last year.
