iGaming Daily

Martyn (00:04.814)
Late on Friday, Superbet announced that it secured

Let's just start again. Even by my standards, that's quite early to have fucked that up.

Ted (00:14.177)
Mm-hmm.

Martyn (00:17.689)
Late on Friday, Superbet announced that it had secured terms for a €1.3 billion refinancing package, led by private equity giant Blackstone and related funds. Reaction to the news sent industry rumours into overdrive, raising questions about Blackstone's intent to fund Superbet's expansion into new markets, and the firm's ambitions to become iGaming's fastest growing competitor.

&A movements will be closely monitored as Superbet targets rapid market share growth in Brazil. Yet, is there more to Blackstone's funding of Superbet than a simple &A play? And what can 1.3 billion euros get you in iGaming as valuations reach a premium for Latam ventures? I'm Martin Elliott and welcome to today's iGaming Daily, brought to you in partnership with Octomove, the number one CRM marketing solution for the iGaming industry.

and I'm delighted to be joined today by SBC's content director, Ted Menmure, to discuss all things Super. Hi Ted, how are you?

Ted (01:23.107)
Very well, Martin, and I would like to thank Superbet and Blackstone because had they not dropped this news, we would be covering the UK Gamling Commission's data sets. So thank you to the deal makers of the industry.

Martyn (01:36.868)
Yeah. Yeah.

Martyn (01:42.767)
Yeah, it's not often that private equity gets a thank you from anyone. they'll be very pleased with that, I'm sure. So, well, it's a big story. So let's dive straight into it. You know, it's unusual to get breaking news late on Friday afternoon unless somebody is trying to bury bad news. So this was a nice turn of events for us who work in the media. Can you just sort of begin by...

Ted (01:46.91)
yeah.

Okay.

Martyn (02:11.023)
taking us through the announcement, what exactly the party said.

Ted (02:14.895)
Yes, so as you mentioned last Friday at the close of play, Superbet announced that it had secured a refinancing package of 1.3 billion led by Blackstone and its funds related to HPS investment partners. And that has kind of triggered on instant rumors and speculation as to what

super fund is going to do with this new financing and which markets it will kind of expand into and also who are its kind of potential &A targets. I think to put it simply, it's as you know, Martin, big money moves in this industry always leads to speculation. Nothing really changes that. But I think that Superbet is really aiming to secure kind of its giant status as I wrote in the write up. And it's at a point of transition where I think

wants to kind of it's it's a company that's being prepped to join the kind of top table of gaming it's really down to them whether they can do that or not

Martyn (03:23.986)
Yeah, it's interesting, isn't it? It's something of a challenge for them to take the next step from where they are currently to sit alongside, know, Bet365, Bitano, and the various Flutter brands and so on. what do you think Superbet, I know what Superbet sees in Superbet, what does Blackstone see in Superbet, do think, Ted?

Ted (03:44.441)
Hehehe.

Ted (03:48.471)
So look, just to take the audiences back, Blackstone has invested in Superbet since 2019, helping it kind of expand from its home market in Romania into central and Eastern European markets, especially the Balkan territory. To the sense, kind of Superbet has proven its capacity somewhat in those markets. It's taken podiums in Poland, Serbia and Romania. And as stands, it's active in 10 territories.

Furthermore, last year Superbet kind of did its first major acquisition acquiring Napoleon Casinos and Sportsbooks in Belgium. So it's got polling places now in four markets. It's very much a brand that is solely focused on itself as Superbet. It targets a very kind of hyper localized strategy. And as kind of all top leading brands, it's very much focused on the development

of its proprietary technology and add-on components and modules. It's very much a kind of first tech-focused operator, but also with a heavy investment in localized operations, customer services, and its day-to-day operations.

Martyn (05:10.173)
Sure, huge investment in marketing everywhere they go and sponsorships and so on. mean if you go to Bucharest you will see Superbet is very fond of out of home advertising. It's absolutely everywhere. One thing I'm really interested in here is what, it's a lot of money this. How do you think Superbet sort of plans to spend it? Has it got a plan to allocate this?

Ted (05:14.669)
Yeah.

Ted (05:24.451)
Mm-hmm.

Ted (05:39.311)
As stands, think that it is clear that Superbet is targeting an aggressive expansion and I think this is not just a process of securing the funds but it's a process of it's changed its kind of internal outlook and internal leadership.

As you know, company founder, Sasha Dragich came back to the business last year and he led the recruitment of Jimmy My Man as new CEO, who's the former chief executive of the Huffington Post. Also further changes saw...

Superbet recruit Hans Holger Albert who was the former executive chairman of Dizzer, a French entertainment and music group. look, last year the speculation was that are Superbet being prepped for an IPO? I think under that it's now shown its hand as in with this refinancing package in securing a billion point three in funding.

Martyn (06:21.123)
Bye.

Ted (06:45.167)
It's going to be interesting, you know, that totally means that they're going to be kind of more scrutinized. I think the market's going to move, eye their movements a lot closely. And I also think that kind of that funding, some of it will be geared towards kind of strengthening their position within those kind of podium place markets. Now, I think Superbet believes that from those podium places, it can build kind of a ramp for further kind of acquisitions and new markets.

It's like you said it's a lot of funding it's gonna be interesting to see how they invest it.

Martyn (07:20.296)
Sure, I mean I know the announcement mentioned part of investment in innovative technologies as everyone does when they get this kind of money but also hinted there might be some acquisitions in the offing.

Ted (07:30.851)
Mm-hmm.

Ted (07:39.701)
Yeah, I mean, yes, yes, that's where kind of the rumor mill starts. Now, then, you know, if we revert back to that, it's what are the targets and at what value? And obviously, look, I mean, everyone kind of pointed pointed out this and said, well, they're going to do one in Brazil. But I think I mean, you speaking to colleagues and speak to you.

Martyn (07:40.973)
Yeah.

Ted (08:06.647)
kind of industry observers on this, it may be a bit too early to do an &A in Brazil considering the valuations that have been touted.

And especially as the market, you just get to be kind of settled in terms of like its definitive plays and its definitive regulatory kind of regulatory proceedings. mean, case in point, one valuation here that you can take is how much Flutter paid for Betnationale at 1.2 billion. Whether that kind of strategy works is yet to be seen.

And the other thing is that I also think that...

If you are sitting on the top table of Superbet, you're also kind of looking at what's happening at the other groups. I still think that one of the players that they will be monitoring is Entain and it's kind of inflated portfolio and seeing whether it can kind of acquire any assets out of that. As you know, Entain are still keen to kind of get rid of Crystal Bet. That could be some movement there. They could expand either East or in Western Europe. So again, a lot

look at a narrative to look out for.

Martyn (09:23.796)
Yeah, I would agree with that. It would seem a very odd time to be pursuing an acquisition in Brazil at the moment because we have no idea really how that market is going to shake out and what a realistic valuation is for some of these operators.

Ted (09:39.115)
Yeah, but I think there was like the &A play in Brazil. think people kind of keep on attaching the same kind of context as what happened in the States, but it's very, very different markets. And in the States, it was kind of a rapid saturation of like, these are the players and these are the companies that you can acquire. I think you're looking at a market that has started with...

91 operators getting licensed. You don't know what the market share profile is of each. You don't know who's kind of leading in each market or leading within, you know, the leading brand for consumers just yet. But I do think that there will be a big acquisition in Brazil this year, but whether it's the right thing to do, no one knows.

Martyn (10:24.924)
Yeah, yeah, well, I'm One other thing to take into account in Brazil is that the level of competition on day one, not quite day one, but when we get to the start of March, the level of competition then is going to be huge. There will be some failures fairly rapidly. can see that, particularly the guys who aren't funded particularly well.

Ted (10:48.239)
But know talking about inflated values, mean going back to your introduction, I think part of this discussion is the financing super bet but it's also what does a billion get you in iGaming now?

Martyn (11:01.832)
Well, that's a very good question, isn't it? if you're buying operators, it can be difficult apart from the very established ones, which you would probably need more money than this for. I mean, the other option is buying in some technology, I guess.

Ted (11:02.83)
Hehehehehe

Ted (11:26.443)
Yeah, but that carries risk too. mean, you know, that's the test of how good you are operationally and how good you are at integrating the new technologies. I think again, black.

Martyn (11:27.359)
Yeah. Yeah.

Ted (11:40.223)
It's funny how the narrative has changed for SuperBert from a year ago where it was kind of being touted as are these guys chasing an IPO and is this why they're changing, why they are kind of transforming their leadership team to now that they've got this kind of these expansion funds and it's where they're going to invest, where are, and I think the other thing here is that especially in Europe,

I think you can kind of take that picture and go well you can see where they can expand in Latin America. But I think it's much tougher in Europe and they're going to have to be quite selective in which markets they enter.

Martyn (12:22.151)
Sure, Right, let's just take a quick break there and when we come back we'll perhaps just take a quick look at where this leaves the overall sort of picture for investment in iGame and operators.

Ted (12:40.216)
Mm-hmm.

Martyn (12:44.191)
So welcome back to part two of iGaming Daily. We're continuing to discuss this vast sort of funding deal that SuperBet has secured from private equity. Before we just talk a little bit more generally about the market at Tad, where do you think this leaves SuperBet then, just to wrap up our chat about them, in terms of...

their position against the established tier one global players.

Ted (13:21.774)
Look, a better place, you prefer to have deep pockets of 1.3 billion. But think now the pressure is, we need to find out the underlying strategy, seems to be pressure there, especially from the investors. Is it just spend on acquisition, spend internally? Is it rectify your podium places in Serbia, in Belgium and Romania?

Martyn (13:22.963)
You

Ted (13:48.351)
And also, you the pressure of you refinance for 1.3 billion. But now you're going to then I now think that they are going to operate to a much more heightened valuation and whether they can prove that. think I may perhaps Blackstone views that there is a chance now with the ruptures that we're seeing, especially the regulatory ruptures that we're seeing in Europe, how you've got to be kind of much more disciplined in a market by market basis.

that they could be very good case, like with the right funding and the right kind of leadership teams, that you could be upsetting the top table of gaming.

And I think that they might be looking at super bets saying like, this is the brand to do it. And like they're, they're operationally efficient. They know how to of expand their, their teams within each individual market and they're at marketing, as you said, which we've seen kind of a lot of operators kind of redraw retreat from. This could be their, their surprise bet. And the other thing here to say about Blackstone is that

It's actually quite out of the blue because they normally just go for quite kind of self-assured bets in gambling. As we've seen with like Lottomatica and Cerser in Spain, yeah.

Martyn (15:12.958)
Yeah, mean, there's one thing that Blackstone is, let's say, famous rather than notorious for, and that it really demands results from its investment. So it must have some kind of ambition to get the huge returns that would come with Superbat climbing up right into that top table, if I haven't mixed my metaphors there to completely obscure the point.

Ted (15:22.156)
Mm-hmm. Mm-hmm.

Martyn (15:42.772)
Why, I suppose one thing here is another option that Superbet's owners may have considered would be the IPO route, which I think was rumored previously. Why do you think they've decided against that at this time?

Ted (16:00.399)
Good question. It's good of you to highlight that. I think maybe, especially in the case of European IPO, it would have been quite difficult this year. Also, I think that you can see kind of an IPO for clear route for an IPO.

such as in the case of like Lottomatica, very kind of focused on one single market. You you know that you can kind of sell into kind of the Milan, the Milan Borsa or in the case of Tessa for Madrid, it's quite a safe route to listing. I think for a company like Superbet that's targeting.

multi markets that is active across 10, that is a pan-European eye gaming group primarily. I think that they didn't have necessarily that confidence in a European listing. The other thing is I don't think that they would have pursued a US IPO for such a brand that's so kind of heavily concentrated in European markets. I don't think that would have worked out and that would have had an appeal to US investors.

I think again, maybe kind of gambling stocks are still kind of viewed as highly risky in Europe and there's not kind of that liquidity for them just yet. And I think that that would have played in Blackstone. But again, look, Blackstone has got the funds to do this, as you know.

Martyn (17:36.02)
Yeah.

Ted (17:37.166)
I don't think that it necessarily means that there is no IPO lane for Superbet. I just think that maybe they've kind of restructured that part of the process for four years down the line, dependent on how this financing proceeds.

Martyn (17:53.047)
Yeah, I mean, hugely difficult to get an IPO off the ground. By the time you get to a billion pound plus thing, need a lot of institutional investors to buy into you. And that is difficult for a gambling company. There's no doubt about that. A lot of institutional investors don't want to be in this industry. But it's interesting. This is the second one this year, or perhaps it was late last year. NoviBet.

Ted (18:01.368)
Mm-hmm.

Ted (18:22.125)
Mm-hmm.

Martyn (18:22.537)
had previously talked a lot about an IPO. In fact, I think they went as far as try that a SPAC deal arranged at one point, which didn't come through because the market view on those deals changed and they were, they, in the end they sold a majority share to all when I think didn't they rather than pursue the IPO. So it's interesting to see, it'll be interesting to see over the next

Ted (18:30.176)
Yeah.

Ted (18:33.806)
Mm-hmm.

Ted (18:43.436)
Yeah.

Martyn (18:48.735)
two or three years, whether that continues, that European operators really sort of shying away from the stock exchange or moving towards it.

Ted (18:54.306)
Mm-hmm.

Ted (19:00.271)
Absolutely, absolutely. And again, you have to kind of reiterate that. Look, I think...

IPOs, SPAC deals were very kind of favorable three years ago. The conditions have changed now, but it doesn't necessarily mean that it leads your business, yeah, you know, leads your business to more liquidity, but it doesn't necessarily lead your business to a better platform for growth. As we've seen in like many of those companies, you know, that took the listings and that may now have to move to completely different operational structure, you know, reporting on quarterly basis. And it doesn't necessarily suit the betting and getting

module.

Martyn (19:38.197)
No, you build in a huge additional layer of cost by going public and you also, you reduce your flexibility to do things at speed, which you have as a private company. So yeah, it'd be really interesting to see as somebody who's perhaps as interested in financial gambles as ones on the weekend sporting action, be interested to see how this plays out. Anyway.

Ted (19:43.437)
Yeah.

Martyn (20:07.562)
I think that's it for today, so thanks for joining me Ted to discuss this. I'm like you, I'm very pleased we weren't talking through those UK GC data sets from the back end of last week. yeah, thanks for that and thanks to all of you for listening and join us again for another episode of iGaming Daily tomorrow.