SBC News Voice of the Sports Betting Industry
Stormy forecasts continue to besiege the leadership of global gambling PLCs as they navigate arduous journeys towards growth and regulatory resolutions.
Perhaps a foreboding of leadership’s current malaise, the morning of Day Two of the SBC Summit was beset by an Atlantic storm over Lisbon, with conditions locals deemed not for the faint-hearted.
Rushed to the Summit’s media HQ, Neal Menashe, CEO of Super Group, lays down his first ultimatum: “You can ask me anything, but I don’t want to talk anymore about regulation.”
The demand is understandable as Menashe has just finished a one-hour leadership panel, where once more, the subject in focus is European gambling regulatory balance, from which, like the Atlantic storm, there is no hiding.
Putting regulatory questions aside, Super Group’s CEO is asked whether he is a happy captain with a positive outlook on industry developments.
“If you told me 25 years ago, this is where we would be, I would have thought you had lost your mind.
“It’s important to recognise that we have come a long way, where every market appears to be pushing towards regulation, and we can build off that.
“Honestly, it blows my mind—the growth of our tech, our people, and the volume of bets we are taking every minute. As an industry, we are not going away, and we have further to grow.”
Yet, 25 years on from witnessing online gambling’s evolution and its adjustment to the demands of regulated markets, Menashe is probed on whether a regulated sector has reached its definitive context and whether current conditions represent an end-game for the leadership of PLCs.
“Yes, reality does bite… but for leadership, it’s much more than that.”
“The decisions you make and the changes you make to your tech are done at scale, and the scale is immense and has to be understood.”
“I would never have thought that we’d be processing this kind of deposits and volume per day through our system 25 years ago… when we started by taking just one bet.”
Though some will complain about the intensity of regulatory conditions and competition, Menashe views online gambling as a mature tech market in which he welcomes its “cross-pollination with other mass-market sectors”.
Thus far, Menashe believes that Super Group has managed the first 25 years of online gambling’s evolution, but he acknowledges that tougher challenges await regarding how the company will function as a PLC.
Super Group is unique among online gambling PLCs, having executed its global expansion via its primary sportsbook brand Betway and its Spin iGaming portfolio – contradicting the industry’s multi-brand approach and many strategic trends, which Menashe is proud to have rejected.
“Remember, we are not a business that grew out of merging brands together. Our business was built on the principle of netting a marketing return from day one.
“Super Group is built on return on marketing: spend €1, and get it back, spend the next and keep going. And that’s how we’ve done it… we are obsessed with ROI and retention rates of Betway and Spin, and nothing will change that.”
Yet, at a time of PLC prioritising cost controls, Menashe is questioned on the sustainability of Betway and Spin’s media strategy and outlay, in which he views marketing ROI as the optimal solution.
“We spend over €400m a year. Is all of that fully optimised? Not likely. So think about it—if 10% is not completely effective, or 15%, that’s €40-60m a year. If you optimise this, the ball rolls even faster.”
However, by sticking to the firm’s founding principles, Super Group has also adapted to the new realities of being a publicly listed company. Menashe reflects on how the listed status brings new challenges and a different pace of decision-making.
“When you’re private, you have the luxury to delay decisions. However, in a publicly listed company, quarter-end and month-end come quickly. You’re always under the spotlight to deliver results and meet expectations.”
Super Group’s PLC transition has exposed areas where further innovation and automation are needed to stay competitive.
“Public listing isn’t for everyone. Some roles that worked when we were private might not be right anymore for the new structure. For us, it’s about making sure we have the right people in the right seats, and this involves tough choices.”
With decisions taken quickly and at scale, the growth demands and pressures on gambling PLCs are relentless. The reality sees Menashe point to Super Group’s calculated decisions to exit unprofitable markets, such as the US sports betting sector.
“Our approach is straightforward: if we don’t see a clear path to profitability in a market, we leave. That’s what we did in the US with our sportsbook product; and in other countries like France and Belgium. You can’t be everything to everyone in every region. We need to focus on where we can win.”
On leadership’s agenda, Brazil’s forthcoming ‘Bets’ market enters the horizon, where Menashe and Super Group executives will be asked if they have the stomach for another standoff.
“I think the US taught a lesson to lots of us and the industry, that you can’t be everywhere, right?
“Choose your battles and decide, it’s that simple: is the net gaming revenue you need to achieve in each market achievable so you can make a profit? We’re not here just to make revenue and hold losses.
“That’s not really what it’s about; it’s got to turn profitable. The hard question is which ones do you give up and which do you keep, but the ones you keep, you have to be all-in on, and the product has to be the best it can be.”
As such, there is only one guarantee, that online gambling PLCs compete in a relentless and brutal landscape, in which there is no escaping from the storm.
