Super Group is set to pursue three online gambling licenses in New Zealand, preparing for participation in an upcoming auction organized by the Department of Internal Affairs (DIA). Despite a cut in marketing expenses, the group, which has been operating its Betway brand in New Zealand for a significant period, reported a 14% growth in regional revenue year-over-year in the second quarter.
CEO Neal Menashe noted that the New Zealand market has bolstered its overall revenue outside the region, contributing to a 6% increase globally. CFO Alinda Van Wyk elaborated during the results call, saying, "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 plans to likely apply for three of the 15 licenses available for tender. The New Zealand government started its expression of interest window in July, inviting companies to bid for online gambling licenses as the market is gearing up for a launch in 2027. Each operator will be allowed to secure a maximum of three licenses. Entain, which currently operates the TAB sports betting monopoly, has also announced its intention to apply for three licenses.
The total market cap of 15 licenses underscores the government’s strategy to restrict access to a select group of well-capitalized, established operators, with a minimum capital requirement of NZ$7.5 million to ensure adequate financial backing.
In the UK, analysts inquired about Super Group's market positioning during the results call. Although the operator does not disclose revenue figures separately for the UK, its performance contributed to a 19% increase in overall European revenue, reaching $132 million. Menashe indicated that their market share in the UK has been growing since the Remote Gaming Duty tax hike that took effect in April, stating, "We’re not a major player in the UK, so there’s a lot of market share we are getting."
Van Wyk added, "Our marketing is really returning to what we’re spending at the moment, which is really a good strategy and we’re happy with that performance. It is so important to note that by optimizing marketing to become efficient in the way we operate in that market, we would just deliver better margins in that jurisdiction."
This week, Super Group finalized a noteworthy sponsorship deal with Premier League club Manchester United to enhance its brand exposure in the UK and globally, especially in Africa. Following the call, Van Wyk expressed that the company is in a "fortunate position" in the UK.
Regarding potential mergers and acquisitions, Van Wyk hinted at the possibility of acquiring smaller operators looking to reevaluate their standing in the UK market, saying, "Somewhere down the line, I 100% believe there would be some operators, which we could plug market share into our business. We’re quite excited."
Historically, Betway has concentrated on sports betting, but Van Wyk mentioned a shift towards bolstering its online casino offerings. Recent improvements have been made across their product suite, with a completed project to centralize their technology and product platforms. These initiatives, coupled with marketing efficiencies, have increased World Cup casino cross-sell to 50% of new customers.
Super Group has also raised its full-year revenue guidance to exceed $2.6 billion, up from a previous estimate of $2.55 billion. Adjusted EBITDA is anticipated to surpass $710 million. In the second quarter, adjusted EBITDA reached $204 million, a rise from $157 million in 2022, while profits jumped to $123 million, a notable improvement from a loss of $3 million last year.
