Sun International is focused on enhancing its SunBet product following impressive earnings in the first half of the year. The operator reported that revenues from SunBet rose 35.5% year-on-year to R1.18 billion ($73.6 million) in H1, significantly surpassing the 19% growth of South Africa's online market during the same timeframe.
Sun International’s group income increased by 7.4% to R6.58 billion in H1, not including the Table Bay Hotel, which the company operates under a management agreement with IHG. During its Capital Markets Day in March, Sun International discussed ambitions to double SunBet’s share of the South African online market from its current 4.5%.
Although the company did not specify its market share performance since then, CEO Bengtsson emphasized the importance of product development for future expansion in the post-H1 earnings call on Monday. He indicated that the firm is exploring both local and international opportunities for growth.
On the earnings call, Bengtsson remarked, "We have said that many times before… 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."
SunBet launched its services in Namibia in May, utilizing a platform provided by Bede Gaming, which is also used in South Africa and Botswana, the latter of which was introduced in 2024. Furthermore, during the Capital Markets Day, Sun International expressed interest in expanding into Zambia, Kenya, and Ghana.
In terms of product enhancements, the company recently introduced a new user interface for SunBet in South Africa and Botswana, with plans for additional developments. Bengtsson commented, "That work is ongoing… We had a very strong World Cup, which shows that our sportsbook can handle larger volumes.
“We’re very encouraged with the trajectory of that, but we’re still not where we want to be. But a lot of the work… has been done, and we have a lot more planned for the rest of the year. So bear with us. It is happening."
Currently, SunBet's revenue distribution favors casino play, with about 90% of revenue coming from casinos and only 10% from sports betting. However, Bengtsson sees this as an opportunity since he estimates that the market shares roughly 35%-40% for sportsbooks. He stated, "That is the delta we have to close by delivering a better product and better operational intensity in our sports business."
The momentum from this summer's World Cup has persisted into the latter half of the year. Bengtsson noted, "The World Cup is largely a customer acquisition opportunity and it was also combined with a good turnover period for us… Yes, that has continued. Now, having said that, we’ve also been in a low sportsbook activity environment during July when most football leagues have been closed. But we have that underlying improvement in momentum, and we continue that now throughout the rest of the year."
Another significant highlight for Sun International in H1 was the return to growth for its land-based casino segment, marking its first increase in three years. Revenues from land-based casinos rose by 1.5% to R3.42 billion, and the market share in South Africa grew by 2.3% to 49%. However, land-based gross profit decreased by 0.7% to R2 billion as the company raised investments in this segment.
Bengtsson believes that revenues from recent investments should lead to improved operating leverage as the casino business continues to expand. He stated, "The sustainability in the operational improvements and in our market share gains are clearly there. Those are real, and they are happening right now. Our ambition… has always been to change the trajectory of our land-based business, which I think we now have done. Our ambition is now to continue to take market share in the land-based casinos."
The CEO also pointed out the synergies between Sun International’s land-based and online businesses, highlighting the potential to capture more online activity from existing customers. "We look increasingly at our business as one customer ecosystem or one customer platform… I keep saying that SunBet probably wouldn’t be where it is today without a land-based business, and a land-based business probably wouldn’t be where it is today without SunBet. 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."
