Super Group is working on “a number of geographic opportunities” to deliver future growth, with the company on-track to finalise its Digital Gaming Corporation purchase by the end of the year.
The comments come in a second quarter earnings call, which saw Neal Menashe, Super Group Chief Executive Officer, assert that the firm is “uniquely positioned to take full advantage” of a global online betting and gaming market that it expects to exceed $140bn by 2025.
“One, I believe that our year-on-year results do not properly reflect our treatment over the last 12 months,” he said on the group’s performance.
“Our continued progress across the globe is better reflected by growing global tabs on loan growth in active customer numbers.
“Two, ongoing regulatory change post-COVID normalisation will ultimately benefit Super Group because we have an efficient cost structure and only – over 20 years track record of trading profitably through thick and thin. Importantly, our control over marketing, our products, and our operating costs gives us a number of levers to optimise them.”
In the US, the Betway and Spin casino parent company noted that the purchase of DGC, a brand licensee of the former that’s currently live in seven states and has market access in up to 12, is on track but is subject to various regulatory timelines.
“DGC will be a tremendous addition to Super Group”
In addition to acknowledging that there’s “a number of licences” that need to be granted before closing, Menashe said: “DGC will be a tremendous addition to Super Group and the fastest and most efficient way for us to enter the US.
“We look forward to completing the regulatory approvals and having DGC become part of Super Group as soon as possible.”
Furthermore, a number of geographical updates were also offered, with it not expected that “the same level of unsustainable price competition that happened in the United States” will be witnessed in Ontario due to the regulatory restrictions of public advertising of bonuses.
“We remain confident from past experience that regulation will be favourable for us in the medium and long run, and we hope to see regulation introduced to Canada’s other provinces in due course,” Menashe commented.
“In the meantime, we will continue to trade as before, and we expect that Canada will continue to underpin our 20-year track record of consistent profitability and cash generation. Some of our historically key Western European markets continue to be on hold.”
Elsewhere, in Germany, where the group is still operating sports betting, an assessment into the “ongoing viability” of igaming has not concluded, with the group awaiting a Dutch licence that is “not in any of our guidance for 2022”.
“…online gaming businesses are resilient, but they are not immune to macroeconomic pressures”
Looking ahead to the group’s US performance, EBITDA through 2023, assuming that the DGC purchase has concluded, is expected to be between €50m-€70m and a target to break even has been set for either the end of 2024 or beginning of 2025.
To close, Menashe addressed the global economic pressures that are being encountered by many digital incumbents.
“We believe that online gaming businesses are resilient, but they are not immune to macroeconomic pressures,” he stated.
“What Super Group has is a global footprint and a competitive cost structure that we intend to keep and improve. We are experiencing these pressures, but our underlying business is healthy and we continue and will continue to grow over time.
“Our balance sheet remains strong, our business fundamentals are sound, and we’ll stay focused on long-term opportunities around the world.”
This sees a number of potential considerations being assessed, including investing in brand and other marketing channels to generate profitable long-term growth, M&A for expansion to new and existing markets or the acquisition of skills or technology.