When Super Group announced in April it intended to go public through a merger with a special purpose acquisition company, or SPAC, Sports Entertainment Acquisition Corp., and acquire Digital Gaming Corporation (DGC) and become the holding company for online gaming brands Betway and Spin, its American intentions were clear.
With Betway and online casino platform Spin, Super Group is licensed in 23 jurisdictions in Europe, North and South America and Africa, counting more than 2.5 million customers and racking up more than $42 billion in bets globally the year before the deal was announced. With DGC already licensed to operate in 10 states – including Pennsylvania, New Jersey and Colorado – Super Group would immediately leap into some of the most fertile US sports betting markets pending regulator approval.
The toddler stage American sports betting market is different than the rest of the world, though. And Super Group’s members know it. That’s why the company’s president Richard Hasson told PlayUSA that Betway will treat each state as an individual country, applying what has made the platform successful in so many other nations.
In an extensive interview with Hasson and Super Group board member and former NFL and NHL executive John Collins, the principals lay out the vision for Betway in the US.
Super Group execs break it down
Why was this worth doing and why will it be successful?
Richard Hasson: Referring back to the SPAC announcement back in April, I think what makes it pretty interesting and pretty unique is, as a business, we weren’t out there specifically looking for a SPAC. We created this, really, through a mutual advisor, someone we’ve been working with for a while and he recommended to us that we met with [former NFL executive and Super Group chairman] Eric [Grubman] and John. And I think during the first meeting – we still talk about it – was a really great meeting.
I think it felt like a perfect match, and I think it really … when you take what Eric and John bring to the table with their history and experience in the US with sports and entertainment, with Eric’s previous experience in capital markets, when you combine that and you put that with us as a business, it really felt like a great match.
I think, moving forward a few months from that first meeting to even through the process prior to the announcement, it felt like a real team, a real partnership, and they’ve been in constant communication with us, and I think it really has been something when we look back, we always talk about that first meeting and what felt like a great match.
John Collins: Eric and I, along with our third partner Chris Shumway, a very serious investor, formerly Tiger Management and then Shumway Capital, which was about a $10 billion fund …
We had identified a number of opportunities in the sports and entertainment sector. But I can tell you that the center of the bullseye was really if we could figure out whether there was a global online-only sports betting and casino company that was a real company and had real revenues and real EBIDTA. But every one of our advisors said that doesn’t exist and, in fact, when we were introduced to the Super Group, some of the advisors said ‘I don’t believe it. Like, there’s no way that there’s a company out there that’s been operating for 20 years who’s got the scale, more than 20 countries and 23 or 26 different languages, doing $1.7 million in net gaming revenues and more than $350 million of EBIDTA. If there were, we would have heard of them.’
They were quietly building this really successful, very vast business, but they were doing it as a private company, and so, when you’re private, you can do things under the radar because you’re self-funding and you’re not really using capital markets, so you don’t have to show anyone what you’re doing.
There’s a lot of people with capital, but, the key to the success of a potential partnership was going to be whether or not you know the company. The target company saw value in Eric and I and whether or not we were able to provide value to them, because if somebody was just looking for the best capital or the biggest valuation and they were just going to hold a public auction, we weren’t going to be interested in doing it. So I think that’s the secret recipe to the strength of the relationship.
Is there an inherent advantage for a global company entering the new US market?
RH: You’re bringing a combination of businesses that’s been around for more than two decades, you’re applying all of that experience and expertise. We’ve shown historically that we are able to enter markets profitably. We’ve shown we’ve got the ability to replicate the success as we expand the footprint more and more around the world, and I think very closely linked to that is how this whole business, from end to end is underwritten by data, and this is something here from day one of the business.
It’s looking at return on investment, looking at how you can use data to understand your customer to enhance the customer experience … as we build a loyal, loyal customer base.
I think another component is when we’re talking to people and potential partners in the US, they know what comes with that. They are familiar with the brand. It is not a new introduction about ‘Brand X.’ They see what we’ve been able to build in other parts of the world. Yeah, when we look at the US, today this is market access in place for up to an initial 10 states. Obviously, very exciting. The brand is live today in three of those with two more to come in the near term.
Every state to us is another country. It’s unique regulations, unique product, unique market, and when you take what we’ve done in the rest of the world, you put together the brand, the fact we’ve done it many times before, the technology with data. you put all that together, that’s, why we think we will be able to do it. We’ve done it beforehand. We’ll back ourselves to do in the US.
I think another point is to add, that the US to us is different to what the US represents to perhaps another operator. We don’t need to end up with 35% or 40% market share for a state to make sense to us.
Is the US a crowded market for sportsbook operators?
RH: I think it is probably a state-by-state answer. I think you got some states with a handful of operators and others with obviously many more. I think, if you look at our experience, we have successfully built the brand around the business in competitive regulated markets, so I think when we look at some of the states and we focus on what we do best, which is growing the brand, growing the business. other operators out there may approach things somewhat differently. We stick to what we know. Even if there is competition there, we will apply what we have applied in other markets. We have the brand we’ve successfully built over many years, we have the people. I can’t overestimate the importance in the uniqueness of this team, which, when you take the experience and you apply that into another market I just think will speak to what we know and create market share.
JC: I think [there is crowding] though there’s clearly the sense that there’s going to be a lot of consolidation coming.
Maybe not today. Feels like a bit of an arms race, the market access licenses, and there are a lot of people who are basically just chasing those licenses, building it up and trying to get into those markets. That’s one of the reasons when I talk to a lot of the commercial guys at the [professional] clubs, the leagues, that’s one of the things I love about Super Group.
They know that they’re going to be one of the guys left standing because execution is such a big part of this business and these guys have been executing on a global basis for 20 years.
This is not their first rodeo. But clearly, clearly, the industry is probably getting ready for consolidation a year or two down the road.
Does the US gambling market have an identity yet?
RH: Our view on this is the US is a marathon and not a sprint. We are in the early, early days. Can you go and define certain customers in certain states and that they like certain event types? Maybe. This will probably go back to the point I mentioned earlier on data. When you take what we have, the ability to understand our customers, regardless, even as a trend moves, with our analytics engine or behavioral science platforms, the stuff we built over many years, that will be applied to every customer in every state and looking to provide them with the most bespoke, the most personalized the most engaging experienced that they can get. And I think, yeah, that applies to a betting customer in Colorado or in the UK. It’s the same mentality that will apply.
Does our data analytics engine put us at an advantage and give us a greater understanding of our customers? Absolutely. We have millions of customers come through the system, historically, millions of data points and great experience in understanding our customers and then ultimately providing the customers what they want, and when they want it.
Who do you consider your main competition?
JC: I think the only one from a capital market standpoint that we looked at, or that we’ve discussed, investors have discussed with us is Flutter. But they’re different because they built their business through, really, M&A. So they don’t have the Betway global brand. They’ll be FanDuel in the US, and will be Paddy Power over in Ireland.
RH: I was going to make two points, one is what John referenced earlier. We’ve been heads-down building this business for the last many years and it’s a lot more focused on ourselves than what competitors are doing. But what is really unique is that we are running a single brand across so many markets and there’s not many other operators that do that within the industry. You may have a bet365 running one sports betting brand. We are a very unique business and continue growing.
What’s the genesis of that name? How super have you been as a group?
RH: I’ll answer the second part first. I think we’re doing great continuing to grow the business around the world, and we are launching additional markets, we are continuing to show great growth both in revenue and in EBIDTA and continue to expand this global footprint that we built and build a robust and diversified revenue stream.
In terms of the origins of the name, so it’s a name which we used to use internally and came up in one of our first conversations, actually, with Eric and John, that this was what we refer to ourselves as. We were thinking that they might think it’s the worst name they’ve ever heard. And they loved it. We’ve always loved it, and that’s the name.