Super Group Faces Allegations of Overstating Earnings from South African Subsidiary
Allegations Against Super Group
Super Group, a major player in the iGaming and sportsbook industry, is currently facing scrutiny following claims by a short-seller report. The report alleges that the company may have exaggerated the earnings reported by its South African subsidiary, Raging River. These accusations come from Spruce Point Capital Management, a money management firm, which argues that investors might have been misled by the company’s financial disclosures.
Ownership Discrepancies Highlighted
Spruce Point points out that Raging River is expected to contribute approximately $287 million in EBITDA for 2025, which represents around 52% of Super Group’s total projected EBITDA. According to the firm, Super Group’s financials indicate a strong 36.5% EBITDA margin for the subsidiary, and the company’s financial reporting assumes full ownership of these earnings.
However, the issue lies in the actual ownership stake. Official filings suggest that Super Group holds 100% ownership, but a May 2024 notice from South Africa’s Western Cape Gambling and Racing Board reveals that 10.71% ownership was transferred to Betway Cares Foundation NPC. This means Super Group’s effective ownership is only 89.29%, not full control.
Consequently, if Super Group consolidated 100% of Raging River’s earnings, the EBITDA could be overstated by about $30.7 million, which corresponds to the minority stake. The report also questions the reasons behind Super Group’s recent auditor change and whether previously noted internal control weaknesses were adequately resolved.
Strategic Shifts and Financial Challenges
Super Group has previously made strategic decisions such as exiting the US market due to unprofitable operations. In 2024, CEO Neal Menashe disclosed that the sportsbook product in the US suffered a loss of $21.7 million and experienced a 13% revenue decline in May of that year. The company intends to redirect its capital and resources toward markets with stronger growth prospects.
Additionally, CFO Alinda Van Wyk pointed out that restructuring costs related to the exit might range between $30 million and $40 million.
Complex Corporate Structure and Expansion Efforts
Despite these setbacks, Super Group continues to expand its Betway brand globally. A notable recent move includes renewing a sponsorship deal with the esports organizer BLAST, which started in 2019, allowing exclusive access to esports players at major events to promote the brand.
Spruce Point raises concerns about the company’s complex corporate structure, noting a history of material weaknesses and the recent change in auditors. They emphasize that this complexity introduces unique risks, especially regarding potential overlooked changes in ownership stakes.
Industry Impact and Market Reactions
Founded in 2009 and led by Ben Axler, Spruce Point has a history of issuing bearish reports in the gaming sector. One such report from October 2025 warned about the potential impact of prediction markets on DraftKings. Although these risks may be limited in certain states where DraftKings operates, the company’s stock price fell significantly following the release of that report.
