Global ambitions: Super Group CEO Neal Menashe on the Betway parent company’s next moves

Super Group, the parent company of Betway and multi-brand online casino Spin, has had a whirlwind couple of years. After listing on the New York Stock Exchange via a reverse merger with a SPAC, Sports Entertainment Acquisition Corporation, in January 2022, it ushered in a new era for this previously private operator. With aspirations of cracking America given its success of taking on the rest of the world with its ubiquitous Betway brand and strong marketing presence, the fresh capital of the US investor pool was about elevating the company to the top tier of operators in the space.  

Two consecutive sixth-place finishes in the past two years of the EGR Power 50 were augmented in Q3 2023 as the company posted revenue of €356.9m and EBITDA of €53.8m on strong growth across online casino, while monthly actives jumped 44% year on year to four million. At the helm of the company is CEO Neal Menashe, who has been in situ since 2020. But change could be coming for the operator. Regulatory headwinds in Europe and efforts to make a significant dent in the US are on the docket and will need a laser focus.

For Menashe, who has held various roles with the business for more than two decades, it comes down to making the right decision. Here, the South African explains how gains are set to be made with the group’s marketing expansion, proprietary technology and a continued drive to “eat, sleep and breathe the customer journey”.    

EGR: You’ve been with the business for over 23 years in various roles, so what was it like to step up as CEO in 2020?

Neal Menashe (NM): I’ve been working here for two decades alongside the rest of the executive team so, in truth, it was actually an easy transition. The complicated part, in any CEO role, is that you have to make the hard decisions. You can’t be indecisive. You’re never going to get every decision right but as long as you get more right than wrong, you’re on the right track.

We’ve made tough decisions down the years. We’ve seen markets close and open up, and you can’t win them all. You’ve got to move on and take on the next challenge. We’ve got the right team in place to make the right calls and we will continue to do so.

As a CEO, you have to fly 100,000 feet in the air, so you see the world differently. You have to quickly spot the opportunities, risks and problems. If we make a few great decisions a year, then that is what builds a business, and underneath that you’ve got great teams looking after customers. That is what, ultimately, makes this industry. You have to eat, sleep and breathe the customer journey.    

EGR: It is coming up to two years since the float via the reverse merger with a SPAC. How did the process develop and how does it feel to be running a public company now?

NM: When the business was private, we didn’t report our numbers. So, the problem with that is no one can understand your scale. We wanted to be more transparent about who we are for the bankers and regulators. The SPAC was introduced to us at the time by Oakvale Capital who said we would be a perfect match. It worked very well for us but the work to get from private to public, and become compliant in the US, has been a lot. It hasn’t been a small journey; it was a two-decade one. It was a mind shift and now we are giving the market indications of how we are going every quarter.   

EGR: However, Super Group’s share price has fallen to around the $3 mark from a previous peak of nearly $11 back in April 2022. Are there any concerns here?

NM: There are certain things that impact the share price and other things that won’t. The share price is a function of your profitability going forward. We’ve got a low float, so we have to fix that. We have a mechanism to fix that over time.Our business has strategic investors who are in this for a marathon, not a sprint. It’s about working together. The whole market, perhaps excluding one or two in the US, has faced increased pressure on market caps. I have to remind everyone this business is a return-on-marketing investment. We have to keep our ratios in a certain band. I am not going to go for extra profitability in the short term that could hamper the long term.

EGR: Super Group’s Q3 results showed record group revenue. However, revenue was down in North America where there was also a €10.3m loss. Can you explain your future plans for this region?

NM: The US has got two clear outliers. I don’t think there has been a marketplace where two companies make up 80% of a market – it is pretty unique. But it is still early days in the US and it is going to evolve. Las Vegas today is not the same as it was back in the 1950s. Our investment in the US is about a return on our marketing. We had to go early in that market and use other people’s software, with a combination of Pala and SBTech. It wasn’t ideal but in order to obtain access we needed to do it.

What we’ve been saying now is that we need our own product, Betway Global Technology, which has already launched in a few states. This year will be about getting return on investment on our marketing using a competitive product that we have in the rest of the world.

We have built out this globalised marketing approach with Betway, and in the US it will be no different. We don’t believe we have to be ranked number one in a market. It depends on investment and what is required. It is highly competitive in the UK and other European markets, and we make money there, so it is about doing the same. Some markets we might be in the top three, some we only aim to make a profit. It is about marrying success to our marketing investment.

EGR: While the UK is not one of Super Group’s largest revenue drivers, there is a major marketing presence in the Premier League with the likes of West Ham and Arsenal. How could these relationships change in light of the white paper?

NM: As an anecdote, I once spoke to someone who said they would want a ban on all sports sponsorship but it was fine to keep the shops. I argued we should put the shops in brown paper bags like tobacco shops, as that would be fair. However, on the front-of-shirt sponsorship, I fully understand and I believe it is a fair compromise. As long as it is fair for everyone. You can’t ban all sports advertising and keep shops all over the place.

Over 50% of Premier League matches during a season will feature some kind of Betway branding – whether that’s the West Ham shirt, various LED displays or betting partner deals. But you have to understand the UK is just one country we are operating in. It is all about managing the marketing budget against NGR return. We are never going to spend 100% of our marketing budget on sports sponsorship but it is good to have from a brand awareness perspective. You need all the other things to come in and play a part in your marketing strategy. 

EGR: Staying in the UK, affordability checks have dominated headlines in recent months. Would you say you are facing any financial impact due to safer gambling measures?

NM: We’ve not had or expect any impact or customer leakage because we’ve been ahead of the curve in implementing the measures. We had a few slower years in the UK as a result, but now everyone else is starting to do what we have been doing for the last five years, our business is on the up. It would be easier if the industry were given rules and told what we should do, and we are hoping for that, but it is taking longer than expected. The sooner the changes are finalised the better, because otherwise you don’t know what the middle ground is. But I am especially proud of the fact Betway’s recent Gambling Commission compliance assessment was very successful, with the regulator determining Betway’s safer gambling controls to be of ‘notable practice’. 

EGR: As regulatory headwinds continue to sweep Europe, specifically Germany, is it a case of there finally being a straw that breaks the camel’s back?

NM: Germany is not simple. We’ve taken a view and we are following it. They have high taxes on casino games, so we’ve had to change our games. They’ve also got certain deposit limits. It is a process we have all had to go through in that country, which is fine as long as you regulate the unregulated. There is no point in putting pressure on the regulated sector if customers are going to decide to go to a sportsbook or casino that doesn’t comply with the rules.

Sometimes, I think too much time has gone on finessing regulation and not enough on stopping people who aren’t actually in the regulated regime. Over time they have to find a fair balance, but my view is that they have to be doing more against the black market. Just to make it fairer and protect the customer.

EGR: You pulled out of India due to the hike in Goods and Services Tax to 28%. Was this a difficult choice and are there further market exits on the horizon?

NM: We have to make calls when we’re not seeing returns. It is uneconomical to have Goods and Services Tax at 28% of deposits; no gaming business in the world can make money like that. It isjust not worth it.

Elsewhere, there are some South American markets where the problem is the currency, including devaluation and capital controls, so we have to keep an eye out for that. You also have to monitor the regulation and if it is too prohibitive and you can’t get your systems right, then you have to reassess. It is like a share portfolio. You could have lots of markets and be winning in some and not winning in others. If you can’t win in some, you have to make the hard decisions – that’s what we do.

EGR: On the flipside, are there any markets you are looking at for potential future penetration?

NM: You’ve always got the African markets and there are some more in the Middle East but what it comes down to is if our business model lends itself to the tax and regulation regimes. I think most of the world is becoming regulated. Not only in this industry but across the board. And some regulation will take longer but when it comes it must be fit for purpose. That way, everyone can make good money and, in turn, pay the right taxes to support good causes.

EGR: While industry observers may focus on Betway, Spin is an important part of the Super Group business. Jackpot City is the main brand, but what other sites are in the portfolio and what are the benefits of a multi-brand approach?

NM: Along with Jackpot City, there is Spin Casino, Royal Vegas and Ruby Fortune. There are also a large number of brands under the Jumpman Gaming umbrella. The majority of revenue is driven by four or so brands and then you have others on the lower-shelf space. The idea with online casino is that each brand is a different genre and feel. You might feel luckier at Jackpot City, or you like the experience of Spin Casino more. Ultimately, they are very similar but not so for the end customer.

In Las Vegas they have lots of brands on the Strip, so it is the same online. It is the look and feel of what makes a brand attractive for each customer – but the odds of winning at all of them are exactly the same.

EGR: You’ve been involved in M&A talks with your tech partner, Apricot, since 2022. Can you give us an update on that transaction?

NM: We want to own our sports technology stack. It is imminent and one of our top priorities. We are almost there now and while it has been a long haul, we wanted to make sure it was a good deal for both parties.

Currently, we tell Apricot what to build but, in the future, it will be even more integrated. We know the value of owning our tech. We can deliver that tech across the world. We need to be able to control our product and spend more or less on it as we want. We don’t like being beholden to third parties.

EGR: You acquired Jumpman Gaming last year to expand your UK footprint. How has this shaped up since the acquisition?

NM: They’ve got a lot of different brands, both B2C and B2B. They’ve also just gone live in Ontario, which we are excited about. Hopefully we will look back in 10 years’ time on these businesses making money because they are ‘best in breed’ in their sector. For us, having these different sectors across sports and casino is important because we can cover them all and deliver for the customers.

EGR: Is the M&A pipeline still ready to be exploited given the relatively healthy balance sheet and desire to grow internationally?

NM: We are always looking at M&A and transformational deals. We’re not going to buy for the sake of buying. It has to make sense in the long term. We have to be strategic about it. There will always be a reason why we didn’t action a deal. Being listed now, we have the opportunity to be in play. We can be a market consolidator with our great teams.

EGR: You used the word ‘transformational’ when discussing potential targets. Could you expand on what that means for Super Group?

NM: It would have to be a big deal that allowed us more access to a region or allowed someone else to have access to a region of ours. It also has to mean that one plus one equals three, four or five. It is about making strategic sense long term. We also need to think about what our share price could be going forwards.

EGR: Finally, how did Q4 2023 fare for the business and what is the strategy for 2024 at Super Group?

NM: October wasn’t great but November was much better. October wasn’t the norm, with a lot of favourites winning in key sports, and it is frustrating because we know we are doing things right and we expect to come within our EBITDA guidance. We have to decide as a business if we want revenue growth or profit. I think we want a bit of both. We have to keep a balance with our marketing spend and we will get there.

This sector is not simple. The whole stock market did not perform particularly well in 2023. We have to keep going. Is this a long-term business? Yes. Is there potential for further revenue growth in our markets? Absolutely.

We have to keep enhancing our product, doing more marketing and ensuring every person is working, eating, sleeping and breathing customer journeys.

2020       Year Neal Menashe was appointed CEO

€356.9m        Group revenue for Q3 2023

44%          YoY spike in monthly active customers to four million in Q3 2023

€22.5m         Amount Super Group paid to acquire Jumpman Gaming

6th         Position Super Group ranked in the last two editions of the EGR Power 50

Source: Super Group/EGR