Super Group CEO sees UK tax-driven consolidation as a chance to win share while Africa grows

Super Group believes the shake-out in the UK licensed market will work in its favour, according to chief executive Neal Menashe. Speaking to iGB, he said the company has coped with the heavier tax burden better than expected because it runs a lean structure and has merged its UK businesses to soften the impact of the levies.

The UK sector has faced a near doubling of remote gaming duty, from 21% to 40%, since 1 April. Last month's Autumn Budget also announced a rise in machine games duty for land-based operators, from 20% to 25%. Several operators have left the market, and some larger groups have announced shop closures and job losses. Menashe argued that, with smaller competitors gone, Super Group can start picking up the revenue they leave behind. He also called the UK sector overtaxed and urged the government to find a happy medium, warning that excessive rates push operators into the black market, where no tax is paid and there are no consumer protections or responsible gambling measures.

The company's third-quarter figures show UK revenue from Betway and Spin up 13% year on year. Group revenue rose 10% to $611 million, adjusted EBITDA climbed 8% to $165 million, and net profit for the period was $142 million.

Africa contributed 43% of group revenue in the quarter. Revenue there grew almost 17% to $262 million, with iGaming up 21.3% to $205 million. Super Group operates in eight African countries and expects to launch in Namibia next year. It has applied for authorisation in Kenya, where it previously held a licence but surrendered it before its 2022 New York Stock Exchange listing. Menashe said the company now regrets leaving and described Kenya as the cheapest market in Africa. It has also secured sports betting and casino licences in Rwanda, where taxes are high, so it can increase marketing if rates fall.

Menashe described the African sportsbook as radically different from the group's international betting business. Parlays make up about 70% of activity, with an average of 13 to 14 legs and some reaching 30, which he compared to a lottery business and which can cause large margin swings depending on results.

Super Group ended the quarter with $602 million in cash and equivalents. Menashe said the company takes a conservative approach to acquisitions, noting that prices for comparable businesses have been too high, and that any deal must add value and bolt onto existing operations rather than involve heavy debt.