The gaming group, as part of a strategic overhaul to streamline its operations and shed costs, has announced a significant change in direction with the decision to exit North American markets. This decision comes on the heels of a review initiated in April, which was tasked with identifying opportunities to trim expenses. At the outset, Kindred did not discount the possibility of a full or partial sale of its business, signaling the extent of the transformation it was willing to undertake.
The withdrawal from North America is set to commence without delay, and Kindred aims to complete the process within a six-month time frame. However, this plan remains at the mercy of regulatory procedures. If successful, Kindred intends to reroute its financial and technological resources towards bolstering its positions in its core markets, which it believes will not only enhance its ability to compete but also extend its market share.
Kindred has established a footprint in numerous U.S. states. Notably, in Pennsylvania, Kindred’s Unibet brand has been operational since September 2019. Starting out as a retail sportsbook in collaboration with Mohegan Sun Pocono, Kindred made strides in July with the deployment of its proprietary technology platform in Pennsylvania.
The company has also achieved a presence in New Jersey, where it introduced the same tech platform following the New Jersey Division of Gaming Enforcement’s earlier approval in the year. Unibet had already been active in the state prior to this development. Furthermore, the business is operational in Virginia, Arizona, and Washington State in association with the Swinomish Tribe, in addition to a presence in Ontario, Canada, under the Unibet brand.
As the review extends its reach, an organizational reshuffle will see Kindred slashing over 300 positions, which will affect employees in North America as well as consultants, with these redundancies expected to transpire in the forthcoming year. Kindred has expressed that revising its organizational structure is essential for honing a more streamlined and efficient operation as it pursues growth.
Through these measures, Kindred anticipates savings of approximately £40.0 million (€46.2 million/$50.8 million), which it asserts will underpin other ventures in its key markets. These ventures include the potential expansion of hyper-local casino brands in specific markets and enhancing product distinctiveness through unique content.
Nils Andén, the interim CEO of Kindred, emphasized the critical nature of the cost reduction efforts, despite the unfortunate implications for the affected staff members. Andén stressed that this reorganization places the company in a much more robust position to achieve sustained growth in regulated markets where Kindred is set to concentrate its resources and technological capabilities.
Since May, following the resignation of the then-CEO Henrik Tjärnström, Andén has filled the role of interim CEO. Tjärnström, who had initiated the cost-saving strategy at the start of the fiscal year amid declines in revenue and net profit for 2022, had asserted the importance of scrutinizing all areas of cost for improved fiscal management.
The North American withdrawal is not the only geographic retreat for Kindred. The company is also finalizing its departure from the Norwegian market, in accordance with Lotteritilsynet, Norway’s regulator. This marks the culmination of a drawn-out legal tussle that began in 2019 and has seen various twists and turns, including fines, legal defiance, and ultimately, regulatory enforcement.
Simultaneously with this announcement, Kindred has disclosed its financial results for the third quarter of 2023. As the company navigates through this period of transition, these results, coupled with the strategic refocusing, will be telling of Kindred’s trajectory as it reinvents itself to adapt to the ever-evolving gaming market landscape.
