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When a company takes a unique approach to doing business compared to its competitors, its leadership ends up being either the smartest people in the room or the people errantly convinced they were the smartest people in the room. One of those labels will ultimately apply to officials at Super Group.
Super Group is shutting down its US online sports betting operations, but keeping its online casino products alive in New Jersey and Pennsylvania. This points to a strategy being both silly and sound.
The final verdict might partially depend on developments outside of Super Group’s control.
Super Group to scale back its US online gambling business
At this time, Super Group offers online sports betting with the Betway brand in nine states. Among those are New Jersey and Pennsylvania, where Super Group also operates the Jackpot City online casino.
At some point, Betway Sportsbook will no longer be available in all of those states. Super Group has not yet shared a timeline for when it plans to shutter those services.
However, CEO Neal Menashe made it clear on the Super Group Q2 2024 earnings call that Jackpot City will continue to operate in both New Jersey and Pennsylvania. Menashe explained that the simple economics of the situation drive that choice.
The numbers for Betway and Jackpot City
Also during the earnings presentation, Menashe shared the breakdown of how the company perceives online gambling revenue.
“Our focus on iGaming aligns with our non-U.S. business, in which about 80% of our revenue is from iGaming.”
Menashe added that “we completed a very extensive review of the full footprint and ended with the view of remaining with iGaming in New Jersey and Pennsylvania. Like we said before, and we apply to all markets, we need to obviously see appropriate returns being generated in those markets.”
Given the company’s direction and Menashe’s comments, the inference is that online sports betting operations in the US weren’t making appropriate returns while, at least so far, online casino products in New Jersey and Pennsylvania have. If you exclude all other information, that makes the decision to slim down to those products quite simple.
However, it’s not exactly that simple. Regardless of how superior the performance of Jackpot City in New Jersey and Pennsylvania may be compared to Betway Sportsbook in the US, Super Group is still running some risk in this move.
Super Group punts a category and assumes with another
By shutting down its online sports betting operations even in New Jersey and Pennsylvania, Super Group is pulling out of competing for a certain type of customer. That is the cross-platform player who values the ability to diversify their plays between casino and sportsbook highly.
It’s uncertain how many of these players exist in either New Jersey or Pennsylvania. Players who feel averse to an online gambling brand that doesn’t offer the full suite of casino and sports betting might represent an insignificant portion of the population.
If that’s the case, then Super Group punting here is inconsequential. There is still an implicit assumption in Super Group’s move here, though.
That is the vast majority of their current monthly active players won’t abandon the brand when sportsbook play is no longer available. Super Group may have mitigated some of that potential liability already by operating separate brands for online casinos and sports.
Should that prove true, then again, this risk is minimal, if at all, tangible. Going forward, the question becomes what Super Group stands to gain from this limitation.
Super Group’s potential benefits from the Betway shutdown
The obvious benefits for Super Group include diminished overhead. While it’s forfeiting any potential revenue as it unloads those costs, Menashe’s comments suggest that Betway’s US operations were probably not profitable.
Keeping Jackpot City going in the New Jersey online casino and Pennsylvania online casino markets allows Super Group to maintain a footprint in the larger US online gambling scene regardless of the Betway exit. That will allow Super Group to act on future opportunities, as Menashe indicated that the company would if the circumstances were right.
The only question is whether Jackpot City in New Jersey and Pennsylvania is profitable enough to not sink Super Group’s entire online division while the company waits for those opportunities. It could be quite some time.
Opportunities absent from the horizon
To date, Super Group has not publicly kicked the tires on taking Jackpot City live in Michigan or West Virginia. US online casino play for real money is legal in both of those states.
It’s unclear what would need to change for that to happen or if Super Group has explored that without publicizing it and simply passed. Regardless, they could be the only options for any expansion for a while.
Several other US states have toyed with the notion of expanding their legal gambling frameworks to include online casinos. However, revisiting our state-by-state online gambling projections shows none of them have come close within the past two years. And prospects for 2025 look slim right now.
If Jackpot City in New Jersey and Pennsylvania is profitable or at least not losing money outside of an acceptable range for Super Group, it can bide its time. If the platform is running a significant loss in both of those states, though, Super Group might already have a countdown running.
Officials with Super Group know their numbers and what they need to change course. For the moment, their strategy is online casino only in New Jersey and Pennsylvania.
In a few years, they could either look like fools or geniuses.
