Spin Palace Casino Leaving the US Market Under Super Group's Direction
Spin Palace Casino (formerly Betway) in Pennsylvania and New Jersey and other online casino operations under Super Group have just announced that it is halting its operations in the United States. The CEO of Super Group, Neal Menashe, says it's a difficult but necessary decision as recent developments in regulatory policies make it near impossible for Super Group to meet its targets. Super Group, the parent company of Betway and Spin brands, announced it is exiting the US online casino market, citing shifting regulatory conditions and capital allocation concerns. The decision comes less than a year after the company pulled out of the US sports betting space and mere months after it rebranded its online casino operations from Betway to Spin Palace Casino. "This is a difficult decision, particularly because our US team has worked hard and made progress over recent quarters," said Chief Executive Officer Neal Menashe in a press release issued Tuesday. "Nonetheless, recent regulatory developments combined with ongoing assessment of capital allocation requirements have led us to believe that our stringent hurdle for return on capital will likely not be met in this market any time soon." Instead, the company will now concentrate its focus on markets that offer "scalable, sustainable, profitable super growth," with an emphasis on operational efficiency and long-term return on investment. Regulatory pressure in New Jersey and Pennsylvania While Super Group did not single out specific policy changes, the reference to 'recent regulatory developments' likely includes the recent tax hike in New Jersey, one of just two US markets in which the company operated its online casino business. New Jersey recently raised the effective tax rate on online casino, sports betting, and daily fantasy sports operators to 19.75%. The company had previously acknowledged the proposed tax hike but did not hint at any plans to abandon the US market. On Super Group's first-quarter earnings call, Menashe said the company was "satisfied with the progress" in the US and reiterated its aim to break even by 2027. That optimism now appears to have faded. Exit strategy could cost up to $40 million The exact future of Super Group's US operations, including Spin Palace Casino in Pennsylvania and New Jersey, remains undecided. However, the company has forecast significant costs associated with the exit. "Various strategic exit options are under consideration," said Chief Financial Officer Alinda Van Wyk. "We are still early in the process but nonetheless would expect to incur a one-time cash restructuring cost of approximately $30 million to $40 million in connection with such an exit and are actively pursuing multiple efforts to minimize the impact thereof." Super Group's decision to shutter its online casino business comes just months after a significant rebranding effort in the US. In March, the company transitioned from the Betway brand to Spin Palace Casino. This followed the announcement in July 2024 that it was abandoning its US sports betting operations. At the time, Menashe had expressed confidence in the company's US outlook, noting that the casino operations were meeting key performance indicators and progressing toward long-term breakeven targets. However, the outlook has changed dramatically in the face of mounting regulatory and financial pressures. Strong growth outside the US While Super Group is scaling back in the US, it is enjoying strong performance in its international markets. The company reported record second-quarter results in its non-US business, driven by robust customer retention, improved pricing models, and record deposit levels. "We are very pleased with our performance in the second quarter," said Menashe. "We remain focused on driving profitable and sustainable growth through consistent execution and continue to be super-confident in the long-term growth potential of our business." Super Group has raised its full-year 2025 revenue guidance for non-US operations to over $2 billion - an increase of nearly 4% from its earlier projection. Adjusted EBITDA expectations have also been bumped up to more than $480 million, reflecting a 5% increase over previous guidance.