Super Group is pulling out of the US online casino market and is considering what to do with the business.
“This is a difficult decision, particularly because our U.S. team has worked hard and made progress over recent quarters,” CEO Neal Menashe said in Tuesday’s release. “Nonetheless, recent regulatory developments combined with ongoing assessment of capital allocation requirements have led us to believe that our stringent hurdle for return on capital will likely not be met in this market any time soon.
“We therefore intend to focus capital and resources on markets where we see the greatest opportunity for scalable, sustainable, profitable super growth, with a disciplined emphasis on operational efficiency.”
Those “recent regulatory developments” most likely include the increased online casino tax rates in New Jersey, one of Super Group’s two US markets. New Jersey raised taxes for iGaming, sports betting and DFS to 19.75%.
Online casino exit to cost $30M-$40M
Despite not knowing exactly what will happen to the Spin Palace Casino operations in New Jersey and Pennsylvania, Super Group does know what it will cost to get out of the country.
“Various strategic exit options are under consideration,” CFO Alinda Van Wyk said. “We are still early in the process but nonetheless would expect to incur a one-time cash restructuring cost of approximately $30 million – $40 million in connection with such an exit and are actively pursuing multiple efforts to minimize the impact thereof.
“Further details regarding these potential costs will be shared during our second quarter earnings release.”
Super Group is scheduled to report second quarter results in August and will provide a longer-term outlook at an investor day on Sept. 18.
Online casino brand changed in Q1
Super Group completed the migration from the Betway brand to Spin Palace Casino in March. The change came after the company announced it was leaving the US sports betting market last July.
Menashe noted the company was monitoring the New Jersey proposal on its first quarter earnings call but gave no clue indication it could be shuttering the business.
“We are monitoring what a proposed tax hike in New Jersey could mean for profitability, but we are currently satisfied with the progress of the U.S. business,” Menashe said. “We are meeting our KPI goals and remain on track for expected breakeven in 2027.
“… So now we’ve got Jackpot City and Spin Palace Casino in New Jersey and Pennsylvania,” he continued later in the call. “And we’ve got more enhancements coming and we’ve got good marketing. And then what we have to do is remember for us to breakeven is a much lesser amount as time goes on. So we are getting closer to what we believe is our net revenue that our operating leverage can then kick in after that. But it’s all about the product, it’s all about the marketing, it’s all about the efficiencies. And that’s what we are all about.”
Super Group raising guidance ex-US
Outside of the US, Super Group had a record second quarter.
Strong results in sports betting, improved pricing models, record deposit levels and “ongoing robust customer engagement and retention across both casino and sports in key markets” led the company to raise 2025 expectations for its business excluding the United States.
Revenue should now come in above $2 billion, up nearly 4% from the prior guidance of $1.925 billion. Adjusted EBITDA should be more than $480 million, a more than 5% increase from the prior $457 million target. “We are very pleased with our performance in the second quarter, reflecting continued momentum and discipline across our core markets and further validating the strength of our operating model and brands,” Menashe said.
“We remain focused on driving profitable and sustainable growth through consistent execution and continue to be super-confident in the long-term growth potential of our business.”
