Spruce Point Capital is short Super Group (SGHC) Ltd (NYSE: SGHC), an online sports betting and gaming company and 2022 vintage SPAC transaction domiciled in Guernsey. Spruce Point identified a material omission of a minority ownership interest in its crown-jewel South African subsidiary, Raging River Trading (Pty) Ltd. SGHC's 20-F claims 100% ownership, but a May 2024 public notice from the Western Cape Gambling and Racing Board and a November 2024 B-BBEE verification certificate confirm a 10.71% minority interest (Betway Cares Foundation NPC), reducing SGHC's ownership to 89.29%. If improperly consolidating 100% rather than 89.29%, SGHC may be overstating 2025E EBITDA by approximately $30.7 million. Spruce Point estimates 20-50% downside to $4.25-$6.80 per share.
We did not write this report. We catalogued it. The underlying research was published by Spruce Point Capital. The Forensic Ledger does not endorse its conclusions. Always read the original document.
The Core Allegation
Super Group (SGHC) Ltd (NYSE: SGHC) has serious issues with the integrity of its financial reporting and transactions with a closely connected shareholder. Spruce Point identified a material omission of a minority ownership interest in its crown-jewel South African subsidiary, Raging River Trading (Pty) Ltd.
The 100% Ownership Claim
SGHC designates Raging River as a 'principal subsidiary' and its 20-F filed in 2025 claims it owns 100% as of year-end 2024.
Why It's Material
- Raging River's 2025E EBITDA is approximately $287 million — ~52% of SGHC's total 2025E EBITDA
- 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 Documentary Evidence
- A public notice from May 2024 at South Africa's Western Cape Gambling and Racing Board discloses that Betway Cares Foundation NPC will acquire a 10.71% direct financial interest in Raging River, reducing SGHC's ownership to 89.29%
- Spruce Point obtained a November 2024 B-BBEE verification certificate issued by SANAS-accredited agency EmpowerLogic which confirms that Raging River has 10.71% Black ownership, with a measurement period ending December 31, 2023
- This potentially proves this ownership structure existed more than a year before SGHC's December 31, 2024 fiscal year-end
The EBITDA Overstatement
If SGHC is improperly consolidating 100% of Raging River's financial results rather than 89.29%:
- 2025E EBITDA may be overstated by approximately $30.7 million
- This represents the 10.71% non-controlling (minority) interest
- A material misstatement that strikes at the heart of SGHC's reported profitability
Auditor Change and Internal Controls
This raises fundamental questions:
- Why the Company recently changed auditors
- Whether past material weaknesses of internal controls have been remediated as claimed
Additional Concerns
- Complex corporate structure and transactions with its largest connected shareholder
- Exposure to rising regulatory and tax costs
- Disruption from prediction markets
The Downside
If we adjust SGHC's EBITDA for the minority interest and value the Company at 4.0x – 6.0x EBITDA (consistent with its valuation range in 2024 when it started missing financial projections):
- Approximately 20% – 50% downside risk
- Target range: $4.25 – $6.80 per share
- Expected to significantly underperform the equity market and the gaming industry
subsequent events
- 2024-05Western Cape Gambling and Racing Board public notice: Betway Cares Foundation NPC to acquire 10.71% interest in Raging River
“Reducing SGHC's ownership to 89.29%”
- 2024-11B-BBEE verification certificate confirms 10.71% Black ownership with measurement period ending Dec 31, 2023
“Potentially proving this ownership structure existed more than a year before SGHC's December 31, 2024, fiscal year-end”
- 2025SGHC files 20-F claiming 100% ownership of Raging River as of year-end 2024
“SGHC states that it owns 100% of the subsidiary but our documentary evidence contradicts this claim”
- 2026-02-12Spruce Point publishes short report on Super Group
“We estimate approximately 20% – 50% downside risk to $4.25 – $6.80 per share”
Source — https://www.sprucepointcap.com/research/super-group-sghc-limited
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