Super Group Accused of Accounting Gimmickry by Spruce Point
Posted on: February 16, 2026, 01:12h.
Last updated on: February 16, 2026, 01:12h.
- Bearish research firm alleges Super Group is improperly booking revenue from a South African subsidiary
- The short seller says the gaming company claims to own 100% of the unit when documents indicate it does not
- The stock is struggling this year
Spruce Point Capital Management, a money manager focusing on bearish opportunities, claims Super Group (NYSE: SGHC) may be overstating financial results from a South African subsidiary, potentially misleading investors in the process.
Ben Axler’s research firm conducted a forensic review of the internet casino and sportsbook operator’s financials, discovering that the gaming company’s 2025 Form 20-F filed with the Securities and Exchange Commission (SEC) indicates Super Group owns 100% of Raging River Trading (Pty) Ltd when it in fact does not.
Why is it material? We believe the subsidiary’s 2025E EBITDA is approximately $287 million or ~52% of SGHC’s total 2025E earnings before interest, taxes, depreciation, and amortization (EBITDA),” notes Spruce Point. “SGHC’s financials show that Raging River has produced a very attractive 36.5% EBITDA margin. SGHC’s financial reporting, as currently presented, captures 100% of the subsidiary’s extremely strong economics.”
The short seller points to a May 2024 notice from South Africa’s Western Cape Gambling and Racing Board indicating 10.71% of Raging River was to be transferred to an entity known as Betway Cares Foundation NPC, meaning Super Group owns 89.29% of that unit, not all of it.
Why it Matters to Super Group Investors
With the stock down 25% year-to-date, it may feel like an eternity ago, but in 2025, Super Group was one of the best-performing iGaming/sports wagering stocks and Africa figured prominently in that equation.
The company has “podium” positioning in internet casinos and/or sports wagering in all of the nearly 10 African markets, including South Africa, in which it operates and the continent is home to millions of younger prospective bettors, that like their Western counterparts, are tied to their mobile devices. Super Group also does business in Canada and Europe.
The operator’s Africa strategy and subsequent growth there played in validating its departure from the US. Last year, Super Group pulled the plug on its US iGaming operations, an announcement that arrived about a year after the company said it would leave the US sports betting arena. Assuming Spruce Point’s allegations are accurate, the implication is that Super Group is painting a rosier picture of its South African operations than really exists.
“If SGHC is improperly consolidating 100% of Raging River’s financial results rather than 89.29%, we estimate it may be overstating 2025E EBITDA by approximately $30.7 million which represents the 10.71% non-controlling (minority) interest,” observes the research firm. “This would represent a material misstatement that strikes at the heart of SGHC’s reported profitability and raises fundamental questions why the Company recently changed auditors and whether past material weaknesses of internal controls have been remediated as claimed.”
Spruce Point Has History with Gaming Stocks
Spruce Point is likely familiar to some gaming investors because the firm has issued multiple bearish reports on industry members with the most recent prior to Super Group being an October 2025 missive on DraftKings (NASDAQ: DKNG) being vulnerable to disruption by prediction markets.
While there’s debate regarding how much market share companies like Kalshi are taking from operators such as DraftKings — data indicate not much in states where DraftKings offers sports betting — that stock traded around $35 the day the Spruce Point report was published and closed at $21.76 last Friday.
As for Super Group, Spruce Point says that company has a history of “material weakness,” noting it changed auditors last year. The research firm adds the Betway parent’s corporate structure is “complex.”
“We believe the level of complexity adds unique risks to the investment story such as overlooked movements in ownership of these entities,” said the short seller.
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