SPAC Deal Behind Betway to Give the Gambling Operator Greater Global Reach

Betway is on a mission. It wants to conquer the sports gambling market, and not just in a single or a limited number of jurisdictions. It seeks global domination of the market and, while the goal may be lofty, it’s on a dedicated, singularly-focused course to achieve its objective. The recently announced deal between its parent company, Super Group, and Sports Entertainment Acquisition Corp to enter a special purpose acquisition company (SPAC) arrangement is likely to give it further momentum, as well.

SPACs Are the New Green

Using a SPAC is seen as an easier way for companies to be traded publicly. It reduces the paperwork and red tape needed to go public and often leads to a quick introduction to a public exchange. There have been several notable SPAC deals in the past couple of years in the sports gambling market, including the high-profile arrangement DraftKings completed to launch on NASDAQ. Super Group announced its merger with Sports Entertainment, trading under the ticker SEAH on the New York Stock Exchange (NYSE), this past April, giving way to a new SGHC ticker and a $4.75-billion capital market valuation for the gambling company.

In an update this week from Super Group, executives extolled the benefits of the arrangement. CEO Neal Menashe asserted that the company is now a recognized brand because of the deal and no longer just a “private, unknown business.” This, he explains, will give Super Group access to new opportunities because “some never would think of a private business because that’s an unknown business.”

Betway Stays in the Spotlight

Sports Entertainment had an established presence in the US sports world prior to its tie-up with Super Group. It is led by a former executive VP of the NFL, Eric Grubman and a former chief operating officer of the NHL, John Collins. The SPAC will own 9.3% of the new business, according to how the deal is currently to be structured, and Betway has been able to leverage its relationship with the two executives to rapidly expand in the US market, as well as others. It is the official sports betting partner of the NHL and recently inked six sponsorship deals with NBA and NHL teams. In addition, it has been selected as the title sponsor for a number of events ranging from tennis to eSports around the world, and continues to look for new key partnerships that can be leveraged using its new public position.

Giving Super Group an added level of comfort is the fact that it is profitable and debt-free, according to Menashe. DraftKings, for example, has said that it won’t be profitable in the US until the country’s sports gambling market reaches maturity, defined by the company as 65% legalization, but Super Group is reportedly in better shape. It generated $910 million in sales in 2019 from sports and online casino gambling and expects to see net gaming revenue of $1.5 billion this year. Super Group has been silent on its net income, but has assured its investors that it is profitable. Because it only operates a single gambling name, as opposed to operators like Flutter that have multiple names depending on the jurisdiction, Betway is confident that, combined with its parent’s deep pockets, it will achieve world domination.