In a significant move that underscores the challenges facing operators in the competitive US sports betting landscape, Super Group has announced its decision to exit the market. The company, known for its Betway brand, will cease sportsbook operations in nine states while maintaining a focused presence in online gambling.
Scaling Back US Operations
On July 10, Super Group revealed plans to close its sportsbook operations in Pennsylvania, Iowa, New Jersey, Arizona, Colorado, Indiana, Virginia, Ohio, and Louisiana. CEO Neal Menashe cited the lack of a “long-term path to profitability” as the primary reason for this strategic shift.
While withdrawing from sports betting, the company will maintain its online gambling offerings in New Jersey and Pennsylvania, focusing on two brands from its Spin portfolio, including the Jackpot City brand.
Menashe elaborated on the decision: “The vast majority of Super Group’s revenue is generated in igaming and, in line with that strategy, we will continue to offer our leading casino product in New Jersey and Pennsylvania. We are open to expanding our US footprint if the right investment or strategic opportunities arise.”
Financial Implications and Background
Super Group expects to incur costs related to this closure in its Q2 results but asserts that these expenses will not impact the group’s capital allocation plans. This decision comes after Super Group’s acquisition of Digital Gaming Corporation (DGC) in January 2022, which held the US rights to the Betway brand and was already operational in eight states at the time.
Signs of Trouble
Hints of this exit strategy were evident during the group’s Q1 earnings call. Menashe had stated then: “We are not happy with the status quo. Nothing is off the table at this stage, and it ranges from say, a complete exit all the way to status quo and everything in between. For us, really, the US states are no different to the countries. If we can see a way to profitability, we will then do them. And if we can’t, then we have to take other action.”
Industry-Wide Trend
Super Group’s withdrawal is part of a broader trend of operators reassessing their position in the US market. The landscape is dominated by a few major players like FanDuel, DraftKings, and BetMGM, making it challenging for other brands to gain significant market share.
Other companies that have recently exited or scaled back US operations include:
- Kindred: Shuttered entire US operations earlier this year
- Tipico: Sold its sports betting business to MGM in June
- 888: US assets acquired by Hard Rock Digital in March
- Betfred: Announced exit from Maryland on June 21
This trend suggests a consolidation in the US sports betting market, with smaller operators finding it increasingly difficult to compete against established giants. As the industry continues to evolve, it’s likely that we’ll see further strategic shifts and consolidations in the coming months.