Kindred Group Abandoning North American Market

The Stockholm-headquartered sports betting operator Kindred Group, owner of Unibet and Casino, has announced plans to withdraw from the North American market by the conclusion of the second quarter of its 2024 fiscal year. Unibet users are encouraged to explore our other top sports betting apps as alternatives.

Kindred is the most recent foreign provider to exit the thriving U.S. market with an eye toward the future. Earlier this year, Australian sportsbook PointsBet sold its U.S. operations to Fanatics, marking the end of its time as the 7th top sportsbook in the country.

In the last 18 months, Maxim Bet, Fubo Underscoreg, and FOX Bet have all stopped operating in the U.S. market.

The North American market exit by Kindred Group was expected due to intense competition and a shift in strategic direction that was well-known in the North American legal sports betting industry. The company had previously withdrawn from the Iowa sports betting market in the previous year.

Ramifications

Although Kindred and Unibet will not be operating in North America, the company is committed to investing additional resources in expanding its presence in the U.K., France, the Netherlands, and select Scandinavian countries where it currently operates.

Over the next few months, Kindred will be laying off three hundred employees and consultants. Although this decision may not be well-received, it seems to be necessary for the company. This move is expected to save Kindred approximately $51 million per year.

In the words of Nils Andén, Interim CEO of Kindred Group, the cost reduction measures unveiled today are crucial and resolute. Although it is always difficult to announce job cuts to our esteemed colleagues, this move will better position us to ensure sustained growth for Kindred in our key regulated markets. By reallocating our resources and technological capabilities, we can now concentrate on strategic projects and targeted markets with strong potential for expanding our market presence.

The company CEO stated that the cost reduction will enhance the company’s ability to take advantage of core market opportunities and increase market share.

The CEO of Kindred has described growth initiatives in the company’s remaining markets as the creation of “additional brand extensions of hyper local casino brands.”

Third-quarter struggles

Kindred released its third-quarter gross winnings revenue report on Wednesday, revealing disappointing results. The company reported approximately $8 million in gross winnings revenue for the quarter ending Sept. 30, marking an 11% decrease from the previous year’s second-quarter earnings.

On Wednesday, third quarter earnings were reported to be approximately $16 million after taxes, reflecting a significant decrease from the $73 million revenues reported during the same period in 2022.

Market share struggles

Despite having a presence in multiple North American legal betting jurisdictions, Kindred was unable to capture a significant market share in any of them. The company, along with the Unibet brand, operated in five U.S. states including Arizona, Indiana, New Jersey, Pennsylvania, and Virginia. Additionally, they were involved in the sports betting market in Ontario, which is Canada’s sole legal sports betting market.

All of these markets are competitive, with plenty of opportunities for the active providers in the area.

According to a press release from Kindred, the long-term prospects for the company in North America have shifted since its entry into the market. The competitive environment requires a substantial investment of resources to catch up to the market leaders, which is not sustainable with our current capabilities. Despite efforts to improve efficiency in recent quarters, ongoing losses from our North American operations are impacting the profitability and goals of the Group.

Out of Kindred’s five states in the American market, Pennsylvania was Unibet’s best-performing state. Since launching in November 2019, the sportsbook has accumulated $263.2 million in lifetime revenue in the Keystone State, with $43.2 million in bets generated during the first 10 months of 2023.

In the Pennsylvania market with a $5.8 billion handle in the first 10 months of 2023, its overall handle only represents a 0.8% market share, which is disappointing.

The Unibet brand did not achieve a 1% market share in Arizona, Indiana, and Virginia.