{"id":3554,"date":"2022-01-24T12:10:55","date_gmt":"2022-01-24T20:10:55","guid":{"rendered":"https:\/\/wagers.com\/staging\/4285\/?p=3554"},"modified":"2022-02-07T23:00:16","modified_gmt":"2022-02-08T07:00:16","slug":"analyzing-super-group-and-its-market-share-claims","status":"publish","type":"post","link":"https:\/\/wagers.com\/staging\/4285\/news\/analyzing-super-group-and-its-market-share-claims\/","title":{"rendered":"Analyzing Super Group and its market share claims"},"content":{"rendered":"

In all the hype surrounding the U.S. market right now, the positioning of Betway parent Super Group is interesting.<\/span><\/p>\n

Speaking during a recent digital fireside chat with the analysts at Needham & Co, the management of Super Group spoke about its ambitions in the U.S.<\/span><\/p>\n

Super Group hopes to complete its merger with the Sports Entertainment Acquisition Corp. (SEAC) SPAC within days.<\/span><\/p>\n

As part of that transaction, Super Group will also become the owner of Digital Gaming Corporation, an entity with market access agreements in 10 states. Betway already has a presence in five states via the DGC linkup including in New Jersey and Pennsylvania.<\/span><\/p>\n

Not worried about leading<\/b><\/h2>\n

During the Needham discussion, Eric Grubman, the man leading SEAC, made the argument that Super Group was \u201cin so many markets but with no leading market shares.”<\/span><\/p>\n

This, he suggested, gave the company a distinct advantage: \u201cThey (the management) can deploy the capital with a very disciplined ROI or (according to) where do we want to make strategic moves.\u201d<\/span><\/p>\n

It remains early days for Betway, but it is fair to suggest that Grubman isn\u2019t over-selling Betway\u2019s ambitions.\u00a0<\/span><\/p>\n

Looking at the performance of Betway to date, it certainly isn\u2019t making a play for leadership in any of the states it has launched in so far.<\/span><\/p>\n

According to the data from EKG, only in Colorado does the brand manage anything like a positive market share and that is still less than 1% for the last three months.<\/span><\/p>\n

North American focus<\/b><\/h2>\n

The U.S. remains nascent for Betway, it would seem. But as per the company\u2019s investor presentation, North America is very much the bedrock of the business.<\/span><\/p>\n

The region contributed 48% of total net gaming revenue of $1.1bn in the 12 months to June last year.\u00a0<\/span><\/p>\n

But for North America, we should read Canada. During the Needham event, Grubman made mention of Betway\u2019s plans for Ontario where he said it was \u201cjust waiting for the regulator to give us the go-ahead\u201d.<\/span><\/p>\n

Canada received no further comment. Yet, contrary to what the company claimed about not having a leading position in any given market, it must be assumed that this isn\u2019t the case there at least.<\/span><\/p>\n

The management might have deemed this an inappropriate moment to talk about its main market. But it has huge implications for Betway\u2019s U.S. plans.<\/span><\/p>\n

Fighting on home turf<\/b><\/h2>\n

Alun Bowden, the analyst with Eilers & Krejcik Gaming (EKG), points out that Betway\u2019s hopes of establishing even a middle-tier positioning in the U.S. hinge on it having a \u201cstrong locally-based\u201d market.\u00a0<\/span><\/p>\n

The assumption for Betway is that this will be Canada. \u201cBut that might not be the best strategy for the U.S,\u201d Bowden warns. \u201cThe U.S. and Canada are not quite the same markets. Translating their success in Canada will be hard.\u201d<\/span><\/p>\n

At issue is the revenue profile for Super Group. Betway is the sports-betting-led brand while under the Spin name it owns an agglomeration of more than 20 iGaming brands. In the same November presentation, the company said that 49% of group NGR was derived from the Betway brand or ~$540m.<\/span><\/p>\n

But as mentioned, Betway is sports-betting-<\/span>led<\/span><\/i>; of that ~$540m, at least half as likely to be iGaming revenues.<\/span><\/p>\n

Which U.S. markets fit the bill<\/b><\/h2>\n

Betway\u2019s heritage is instructive. It is borne out of the same group as online casino supplier Microgaming, its major supplier and with which it also shares a major shareholder. \u201cThey have online casino written through them like a stick of rock,\u201d Bowden said.<\/span><\/p>\n

Its strategy flows directly from its perceived strengths. It succeeds – as is the case in the U.K. where it has achieved a single-digit market share – by \u201cdoing what they have always done.”<\/span><\/p>\n

\u201cThey secure some high-profile sponsorships and follow that up by strong affiliate and digital marketing efforts,\u201d Bowden said.<\/span><\/p>\n

For this to work, it needs iCasino to complement sports betting. \u201cTo horribly mix metaphors, sports-betting is their shop window and iCasino is the engine room,\u201d Bowden said.<\/span><\/p>\n

This means the markets where Betway can profitably exist by not being a market leader are pretty slim. \u201cNew Jersey feels unlikely, as does Pennsylvania,\u201d Bowden said. \u201cSo maybe Michigan?\u201d<\/span><\/p>\n

Spelling it out to investors<\/b><\/h2>\n

That Super Group isn\u2019t spelling any of this out to investors is no surprise. As and when Ontario launches, the company will have a job on its hands protecting its market share against the onslaught likely to come from new regulated-market entrants.<\/span><\/p>\n

As Grubman appointed out, it is at least in the happy position of being cash generative at present and has to decide how to deploy that cash \u201cin a way that\u2019s smart and add value to shareholders.”<\/span><\/p>\n

It will soon become evident whether attempting to establish more than just a toehold in the U.S. is the smart way or not.<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"

In all the hype surrounding the U.S. market right now, the positioning of Betway parent Super Group is interesting. Speaking during a recent digital fireside chat with the analysts at Needham & Co, the management of Super Group spoke about its ambitions in the U.S. Super Group hopes to complete its merger with the Sports […]<\/p>\n","protected":false},"author":9,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"nf_dc_page":"","footnotes":""},"categories":[324],"tags":[],"class_list":["post-3554","post","type-post","status-publish","format-standard","hentry","category-news"],"_links":{"self":[{"href":"https:\/\/wagers.com\/staging\/4285\/wp-json\/wp\/v2\/posts\/3554","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/wagers.com\/staging\/4285\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/wagers.com\/staging\/4285\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/wagers.com\/staging\/4285\/wp-json\/wp\/v2\/users\/9"}],"replies":[{"embeddable":true,"href":"https:\/\/wagers.com\/staging\/4285\/wp-json\/wp\/v2\/comments?post=3554"}],"version-history":[{"count":6,"href":"https:\/\/wagers.com\/staging\/4285\/wp-json\/wp\/v2\/posts\/3554\/revisions"}],"predecessor-version":[{"id":4374,"href":"https:\/\/wagers.com\/staging\/4285\/wp-json\/wp\/v2\/posts\/3554\/revisions\/4374"}],"wp:attachment":[{"href":"https:\/\/wagers.com\/staging\/4285\/wp-json\/wp\/v2\/media?parent=3554"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/wagers.com\/staging\/4285\/wp-json\/wp\/v2\/categories?post=3554"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/wagers.com\/staging\/4285\/wp-json\/wp\/v2\/tags?post=3554"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}