The growth in Betway’s Middle Eastern, African and European operations partly offset the decline in revenue in the company’s North American Division.
Super Group Chief Executive Neal Menashe has praised the “solid” result of Q1 and stressed that the company remains focused on revenue and profit growth.
He said: “During the month March, the net gaming revenue reached a new record, and the operational EBITDA was over 20%. This is a reminder of the importance of operating leverage for our business.”
“We are confident we will continue to build upon another strong quarter in igaming, sports betting and across the globe.”
Ontario’s regulation throttles North American segment
Super Group has reported EUR338.5m in revenue for the first quarter of 2023. This is a 1% increase from the EUR334.5m that the company had achieved during the same period last year.
Super Group’s Betway Sports Betting and Gaming business generated EUR198.2m, while its online casino subsidiary generated EUR140.2m.
North American operations accounted for EUR130.2 or 39% of the total. The business reported EUR150.5m in 2022.
The main cause of this fall, according to the company, was the Ontario-regulated market.
Gaming consultants Regulus Partners said the results showed “just how little money is made per state, and how inefficient a Tier Three (or Lower) US operator’s cost base is.”
Regulus noted that North America has evolved from a regional cash cow into “a more challenging set” of jurisdictions.
Super Group, through its two branded businesses, was heavily involved in this market prior to April 2022 when the Ontario market will be regulated.
International growth offsets decline
Asia-Pacific also saw a decline in revenue, from EUR79.2m to EUR58m between Q1 2022 and this year.
Super Group offset these declines with increases in revenue from other regions. Africa and Middle East, the business’s segment, increased to EUR87.9m from EUR65.1m the year before. Super Group’s European operation also increased from EUR32.7m up to EUR55.8m.
Alinda Van Wyk, CFO, said that the results of the third quarter show the value of the continued investments in growth. Our balance sheet is robust, and provides us with a solid foundation for scaling our business. We constantly optimise our cost efficiencies to further enhance future profitability.
Super Group Q1 financial results
Super Group reported a loss of EUR1.9m for the three-month period. This was due to a EUR2.2m charge for non-cash relating the company’s purchase of Digital Gaming Corporation.
It was a much better result than Super Group’s EUR163.2m Q1 2022 loss. The result in that case was due to the costs and fees associated with the listing as a publicly traded company, which took place in January 2022.
The company also reported an operating earnings before interest tax, depreciation, and amortization (EBITDA), of EUR34.7m, for the first quarter 2023. This is a 44.9% drop from the EUR63.0 the company recorded last year. However, the company said that this was due to increased investment in the US business after the DGC acquisition.
Super Group’s US Expansion Plans
Super Group has announced its plans to expand into the US after acquiring DGC.
The company stated that it’s legacy business “continues generating cash which will finance investment in the US.”
The company stated that its primary plan was to expand by rolling out Betway to US customers, in states where they have market access.
Super Group stated that it intends to concentrate on existing markets and optimise return on investment.
The company said it would “leverage its global brand” to minimise targeted marketing expenditure “until correct infrastructure is in position for each state”.
Super Group has stated that in 2023 it will invest approximately EUR70m into its US operations. Super Group forecasts that by 2024, this figure will rise to EUR80m.
Super Group said that its goal is to have its first EBITDA-positive quarter in the US in 2026 and its first EBITDA-positive year in 2027.