Sun International is actively focused on enhancing its SunBet product following a significant increase in earnings during the first half of the year. The company reported that revenue from SunBet rose 35.5% year-on-year, reaching R1.18 billion ($73.6 million), a performance that notably surpassed the 19% overall growth of South Africa’s online market during the same period.
Overall, the growth in online operations spurred Sun International’s group income to a rise of 7.4%, totaling R6.58 billion for the first half of the year, excluding earnings from the Table Bay Hotel, which the company manages in collaboration with IHG.
During its Capital Markets Day in March, Sun International shared its ambition to double the market share of SunBet from its current 4.5% in the South African online market. While the company did not provide updates on its market share progress on the recent earnings call, CEO Jens von Bengtsson emphasized the importance of product development for the next stages of growth. He also indicated potential opportunities for expansion both locally and internationally.
Bengtsson mentioned, "We have said that many times before. I think it consists of multiple aspects. We are still open to and keen on consolidating minorities if there is opportunity that is being presented.
"In terms of the SunBet business, there might be opportunities to consolidate locally, but there might also be opportunities outside of South Africa. We are looking at all of it, but we have a very high bar for what we deem to be good investments."
In May, SunBet expanded into Namibia, supported by Bede Gaming’s platform, which it also utilizes in its other markets, South Africa and Botswana.
The company is considering further expansions into Zambia, Kenya, and Ghana, as discussed during the Capital Markets Day.
Recently, Sun International introduced a revamped user interface for SunBet in South Africa and Botswana, and Bengtsson said additional developments are in the pipeline. "That work is ongoing. We had a very strong World Cup, which shows that our sportsbook can handle and have the capacity for larger volumes. We’re very encouraged with that momentum, but we’re still not where we want to be," he stated.
The split between casino and sports betting revenue for SunBet currently stands at 90% for casino and 10% for sports. Bengtsson sees this as an opportunity for growth, noting the overall sportsbook market is around 35%-40%. "So that is the delta we have to close by delivering a better product and better operational intensity in our sports business," he commented.
The excitement generated by the recent World Cup contributed to customer acquisition opportunities, maintaining a positive momentum into the latter half of the year, despite a typical slowdown in sportsbook activity during July.
Aside from online growth, Sun International achieved a return to revenue growth in its land-based casino segment for the first time in three years, reporting an increase of 1.5% to R3.42 billion. The company's market share in South Africa rose by 2.3% to 49%. However, land-based gross profit dipped slightly by 0.7% to R2 billion as investments in this area increased during the same timeframe.
Bengtsson believes that the benefits from recent investments will enhance the operating leverage in the casino segment as it continues to grow. He stated, "The sustainability in the operational improvements and in our market share gains is clearly there. Our ambition, as we outlined in March, has always been to change the trajectory of our land-based business, which I think we now have done.
"We continuously leverage off one another. Now, having said that, we know that almost all of us, or at least the vast majority of our land-based customers are playing online, but not all of them are playing with SunBet, so we see that bit as the opportunity."
