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Kindred is preparing to pay £7.1m for a fine it expects to receive following reviews by the UK Gambling Commission, according to a statement in its Q4 2022 report.
“The amount provided is based on current discussions with the Gambling Commission and the group awaits the final outcome,” the report states. A spokesperson for the company said it has no further comments.
The announcement is reminiscent of 888’s revelation in the process of acquiring William Hill that it had set aside £15m for potential regulatory action as a result of an ongoing licence review by the Gambling Commission into William Hill. That penalty has yet to be publicly issued.
Separately, Stockholm-listed Kindred's year-end report publication covering January through to December 2022 was accompanied by a presentation from CEO Henrik Tjärnström.
Tjärnström’s main message was that “immediate actions are being taken to improve profitability following weaker than expected performance in the quarter”.
In 2022, Kindred’s total revenue, from both B2B and B2C operations, was £1.07bn, compared with £1.26bn the previous year.
Gross winnings revenue (B2C) decreased by 17 percent to £1.04bn. Excluding the Netherlands, it decreased by 3 percent. Kindred launched in the Netherlands market in July 2022.
Underlying EBITDA also took a hit, as it decreased by 61 percent to £129.2m.
Profit after tax was £120.1m, compared with £295.3m the previous year.
One reason given for the faltering performance was that the FIFA 2022 World Cup, which took place for the first time during the winter and postponed hundreds of sports matches, did not compensate for the disruption it caused to Kindred.
However, “marketing investments before and during the 2022 World Cup resulted in the second highest active customer base ever of 1.83m, and it is expected to improve activity at the start of 2023”, according to the report.
Regulatory headwinds in Belgium and Norway also affected revenue, the operator said.
Regulatory changes in Belgium mean increased requirements on customer duty of care and responsible gambling limitations.
In Norway, where Kindred has been in a long-standing legal battle with local authorities over its right to offer its services in the country, “changes made to our offering also had a negative impact”.
Norwegian authorities have threatened Kindred with daily fines.
Some core markets did continue to perform well during the fourth quarter, when the FIFA World Cup took place.
France, Sweden, the UK and the Netherlands contributed £305.5m in total revenue, an increase of 25 percent compared with the same period the previous year.
“The Netherlands continued to exceed our expectations with daily average gross winnings revenue of £0.6m, and we remain firmly on track to be the number one operator in 2023,” Kindred added.
