Betway Leaving U.S. Market

The parent company of the sportsbook Betway, Super Group, said recently that it will be withdrawing from the American sports betting market in order to concentrate its efforts on online casino gambling in Pennsylvania and New Jersey. “As a global business, we constantly evaluate the optimal use of our resources across all markets in which we operate,” Super Group CEO Neal Menashe said in a press release. “We have recently concluded an extensive review of our U.S. operations and, at present, we do not see a long-term path to profitability for the sportsbook product. 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 U.S. footprint if the right investment or strategic opportunities arise.”

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There are nine states where Betway currently offers mobile sports betting. The only two where online casino gaming is also offered for wagering are New Jersey and Pennsylvania. Super Group did not provide an estimated timeline for when Betway would completely leave the sports betting industry.

Additionally, Super Group had twice applied for one of Illinois’ three licenses for mobile sports betting that are exclusively available online, but had dropped out of the running each time. It had withdrawn once before, in October of last year, following its designation as a finalist for the $20 million license almost a full year prior.

Beyond Pennsylvania, where it also operates an iGaming platform, it was evident that Betway had not made any progress toward gaining market share among the six states where handle and gross revenue data were accessible. The $25.6 million in handle that has been amassed since the company’s February 2022 entry into Arizona is less than 0.2% of the $14.8 billion that has been wagered through sports betting apps in that state.

Betway had more than $2 million in gross revenue overall in Arizona, but that was the only state where the gross topped $2 million. Betway had a 10.7% hold percentage in Ohio in their first 17 months and had winnings of $1.4 million but their rate was just 6.5% in Virginia and even worse in Pennsylvania, Iowa and Indiana with the hold percentage not even reaching three percent. 

Additionally, Betway’s expenditure was significantly reducing its gross winnings in the states where promotional money was available this year. Although it held a 9% hold in Arizona this year, 66% of its $662,500 in profits came from the $437,936 in promotional bonuses and credits.

Although Betway was unable to deduct promotional offerings in Ohio, the $240,236 expenditure accounted for over 66% of its $365,900 in income thus far this year.

After launching in June 2021, Betway did not invest any promotional money in Pennsylvania for mobile sports betting due to the presence of online casinos. Instead, it retained 2.7% of the $51.5 million in handling, which resulted in earnings of about $1.4 million.

Super Group said in the release that they expect to have costs and charges associated with the sports betting closures. “Such costs and charges, while not insignificant, will not have any impact on Super Group’s previously communicated capital allocation or operating plans.” Super Group said that they will detail the costs and charges in their August earnings call.

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