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Its youthful population, mobile penetration and enthusiasm for gaming could make Africa the industry’s next major marketplace.  

Want to find a rapidly growing region with enormous potential for gaming? 

Try Africa. 

While investors are fixated on the Vegas Strip and Macau, wondering if mega-resorts can survive and thrive in places like the United Arab Emirates, Africa is booming. Regulated gaming revenues exceed $6 billion and will double by 2030, H2 Gambling Capital estimates. 

Yet the continent is very under-penetrated, with just a handful of countries generating significant gaming revenue. Among them: South Africa at $3.3 billion, Nigeria $1.1 billion, Ghana $880 million and Kenya at $680 million. 

The old line is that demographics is the future. Africa has demographics. Its population of 1.5 billion is projected to grow to 2.5 billion by 2050. Economies are growing 4 percent to 4.5 percent annually. 

Gaming investors don’t know much about Africa, partly because they have been occupied fulfilling growth in established markets like the U.S., Europe and emerging markets in Asia and Latin America. American information sources focus on older markets, and investors focus on countries developed initially with brick-and-mortar casinos. Thus casino operator Sun International, with annual revenues of more than US$700 million, is the one African gamer well-known to investors. Yet African nations are digital-first, with online gaming thriving where no physical casino has ever stood. 

Much of the ignorance is, well, simply ignorance. How many people can place Ghana on a map? Who has a visual image of the skyline of Nairobi? The answer: very few, likely including you, dear reader. 

That ignorance represents opportunity.  

A Super Way To Play Africa? 

Interestingly, there’s a very successful NYSE-listed, digital-first gaming company that’s deeply into Africa: Super Group Ltd. (SGHC). The online gaming and sports betting company has been profitably growing, and even pays a quarterly cash dividend. 

In its first quarter, SGHC reported that EBITDA grew 36 percent to $152 million. Active users jumped 18 percent to 6.4 million. It has no debt, and sits on $422 million in cash. EBITDA margins rose 324 basis points to 25 percent. It forecasts full-year EBITDA at $680 million or more. SGHC has “buy” ratings from the likes of Oppenheimer, Ganaccord Genuity and Craig-Hallum, and “outperform” by Macquarie. 

Clearly, this is a solid, profitable growth company, not a penny stock on some questionable exchange. And Africa is a big part of its story. It generated 44 percent of company revenues versus 39 percent last year. First quarter EBITDA attributed to Africa operations rose 21 percent to $98 million. In short, Africa can be a source of significant and growing profits to companies, and hence, to investors.  

Skeptics will point to the risks of emerging markets. Laws, regulations and tax regimes evolve. There may be concerns about political instability. But there’s one certainty: Africa’s enormous economic growth and untapped opportunity. 

As Financial Advisor Satchel Paige Would Say… 

“…Don’t look back, something might be gaining on you.” 

The great pitcher may have been talking about baseball, but he could as easily have been talking about accelerating technology overtaking the very gaming tech companies that were supposed to be the pick-and-shovel purveyors in the online gaming gold rush. 

 Remember when affiliates were all the rage? The media companies would attract readers to their publications, then market them to online operators. It seemed like a slam dunk in a world where online play was growing double digits. But operators were spending away their incomes in customer acquisition wars. Catena Media was a market darling then, trading more than SEK139 a share. It’s now SEK2 and change. 

Gambling.com Group (GAMB) reached more than $16 a share just 18 months ago, winning analyst accolades. Now it’s running at about $2 and change. 

In retrospect, affiliates were built on a model disappearing as fast as your daily newspaper. Bettors now have a world of information at their fingertips in large-language AI models and elsewhere. B2B customers can set up their own data teams and skip the third parties. 

Then there were data companies, fortresses of information with the financial backing of the deepest pockets in sports, like Major League Baseball. Well, guess what? Sportradar, once more than $32 a share, is now just over $13. Genius Sports has fallen from a high near $25 to $5 plus. 

Or, what could be a simpler, more practical business than aggregating the explosive number of online game titles from a mind-boggling number of providers, so online operators could have one-stop shopping for games? Well, Bragg can boast about its games library, but not its stock price, which peaked at more than $25 and is now under $2. 

Of course, the game isn’t over. These companies are offering new information services and using AI to grow beyond their original models. Indeed, GAMB is set to use AI to cut expenses by 25 percent while providing leading-edge services to customers. Catena recently reported significant earnings growth, with the promise of more to come. 

We’ll see how it works out. Meanwhile, it’s easy for management to talk about transitions, promising to grow with new products and platforms. We won’t count them out, but in our technology age, you never know who might be gaining on you. 

Frank Fantini is principal at Fantini Advisors, investors and consultants with a focus on gaming.