Kindred To Exit North America, Cut 300 Jobs

November 29, 2023
Kindred Group has announced plans to exit the North American market and cut 300 staff positions as part of a strategic review that it says will save £40m per year.

Kindred Group has announced plans to exit the North American market and cut 300 staff positions as part of a strategic review that it says will save £40m per year.

The Stockholm-listed company said on Wednesday (November 29) that it will instead focus on growth in “core markets”, adding that has regained its market-leading position in the Netherlands.

Kindred said it will have pulled out of North America by the second quarter of next year.

The exit from Ontario and the US is further evidence that the US market in particular is dominated by the big three of DraftKings, Flutter Entertainment’s FanDuel and BetMGM.

“The competitive nature of the market means significant resource is needed to close the gap to market leaders and at our current capacity this is untenable,” the company said in a statement.

The pullback is “both necessary and decisive”, said Kindred interim chief executive Nils Andén.

“While it is never a desire to inform valued colleagues of redundancies, this puts us in a stronger position to secure long-term growth for Kindred across our locally regulated core markets,” he said.

“We can now focus our resources and tech capacity towards strategic initiatives and selected markets where we see clear potential to grow our market share.”

North America gross winnings revenue fell 11 percent in the third quarter to £6.4m, Kindred said.

In the quarter, North America cost the company £6.5m in EBITDA, which was an improvement over a £9.8m decline in the year-earlier period.

As recently as April, Kindred announced that it was opening Unibet-branded betting kiosks and over-the-counter betting at casinos by the Swinomish Indian Tribal Community in Washington State.

In July, it launched its technology platform in Pennsylvania with Mohegan Sun Pocono.

Exiting its Ohio partnership agreement will cost it $5m, Kindred said.

The company exited Iowa late last year, but in February, under former CEO Henrik Tjärnström, it had repeated plans to break even by 2026, in line with a strategy of focusing on states that allow online casino as well as sports betting.

Long-time CEO Tjärnström abruptly resigned in May and the company named Andén as interim replacement.

In the third quarter, Kindred revenue rose 2 percent to £283.9m, while post-tax profit plummeted to £12.6m from £57.9m in the same quarter last year, Kindred said.

In early trading, Kindred’s Stockholm shares fell 5.8 percent to SEK86.9.

The company has reported gains in the UK, Netherlands, Denmark and Romania, but has seen declines in Norway and Belgium.

Belgium has set deposit limits, while Kindred is exiting the Norwegian market under pressure from the government and regulator, which have moved to protect its gambling monopoly.  

Kindred said it expects so-called underlying EBITDA for 2024 to be £250m.

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