Kindred Group, a gaming firm, discloses its exit from North America and workforce downsizing.
In a move that aligns with other European gambling companies, Kindred Group has announced its withdrawal from the North American gambling market by the end of Q2 2024. The decision comes as a result of the challenging regulatory environment, high operational costs, and prolonged timelines to profitability experienced by European operators in the US.
The regulatory complexities and the competitive landscape, dominated by established US operators such as FanDuel and DraftKings, have proven difficult to navigate profitably. This strategic exit is part of an ongoing review initiated in April 2023, aimed at reducing costs and optimizing operations. At one point, a sale of the company was even considered.
Kindred Group, founded by Anders Ström in London in 1997, is one of the largest online gambling providers in the world, boasting millions of registered players. The company offers a variety of products, including sports betting, casino games, and poker. Unibet, a significant part of Kindred, went live online in 1999 and has been operational in additional US states since July 2023, including Virginia, Arizona, and Washington State (in partnership with the Swinomish Tribe).
Despite the positive figures in Europe, the sports betting levels in core markets and a lower sports betting margin have had a negative impact on Kindred's overall performance. However, Kindred has regained its leading position in the Netherlands and sees positive momentum in the UK, as stated by Kindred's Interim CEO, Nils Andén.
Kindred wants to focus on attractive markets in Europe, where it has a strong presence and a competitive edge. The withdrawal from North America is expected to result in the loss of 300 jobs. The company remains committed to a safe gaming experience and holds licenses from several European countries.
The impact on Kindred's stock price due to this decision is not detailed in the available sources. However, given the strategic repositioning in light of challenging US market conditions, the move likely reflects a strategic re-evaluation rather than an unforeseen negative event. Publicly traded companies often experience mixed stock impacts in such scenarios, depending on investor sentiment about the company’s future growth prospects and cost management.
Unibet was listed on the Stockholm Stock Exchange in Sweden in 2004. Due to the German gambling state treaty, German players can only use slot machines in the Unibet online casino. The company has been offering legal sports betting in the US state of Pennsylvania since September 2019.
[1] The Guardian [2] Reuters [3] Bloomberg
- kindred Group is considering divesting from the finance-intensive and highly competitive online casino-and-gambling industry in North America, citing regulatory complexities and the dominance of established US operators like FanDuel and DraftKings.
- Despite its strong presence and competitive edge in European markets, Kindred Group sees opportunity for more efficient operations and growth by focusing its business efforts on online casinos Germany and other attractive markets in Europe, while adjusting its strategy to account for the challenging regulatory environment in the US.
