Kindred Group Abandoning North American Market
Stockholm-based sports betting operator Kindred Group, which runs Unibet Sportsbook and Casino, has signaled its desire to exit the North American market by the end of the second quarter of its 2024 fiscal year. Many Unibet users can pivot and take advantage of our other best sports betting apps.
Kindred is the latest overseas provider to depart the bustling U.S. scene with a focus on the future. In the spring/summer, Australian-based sportsbook PointsBet announced the sale of its U.S. assets to Fanatics, ending its tenure as the 7th most popular sportsbook on American soil.
Maxim Bet, Fubo Sportsbook, and FOX Bet have also ceased operations in the U.S. market in the last 18 months.
Kindred Group's decision to exit the North American market didn't come as much of a surprise as competition and a different strategic direction for the company were well-known among insiders of the North American legal sports betting industry. The company had already pulled out of the Iowa sports betting market last year.
Ramifications
Kindred and Unibet will be non-existent in the North American markets. Still, the company vows to put extra resources into its presence in the U.K., France, the Netherlands, and the few Scandinavian countries in which it currently has a presence.
Three hundred employees and consultants will be laid off over the next few months. While not a popular decision, it appears to be one that the company had no choice in making. The move will save Kindred an estimated $51 million annually.
According to Nils Andén, Interim CEO of Kindred Group: “The cost reduction actions announced today are both necessary and decisive. 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. 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.”
That cost reduction, according to the company CEO, "will improve ability to capitalize on core market potential and gain market share."
Growth initiatives in Kindred's remaining markets include what the CEO calls “additional brand extensions of hyper local casino brands.”
Third-quarter struggles
On Wednesday, Kindred released its third-quarter gross winnings revenue report, which was disappointing. The company reported gross winnings revenue of about $8 million for the quarter ending Sept. 30. It is about an 11% drop from second-quarter earnings from last year.
Third quarter earnings reported Wednesday, after taxes amounted to about $16 million. It marks a troubling drop in year-over-year earnings from the $73 million revenues from the same period in 2022.
Market share struggles
Kindred had a presence in a host of North American legal betting jurisdictions but failed to generate a reasonable market share in any. Kindred and the Unibet brand were active in five U.S. states - Arizona, Indiana, New Jersey, Pennsylvania, and Virginia. It was also in the Ontario sports betting scene, Canada's only legal sports betting market.
All are competitive markets with seemingly enough to go around among the active providers in the jurisdiction.
"The long-term outlook for Kindred in North America has changed since entry," a Kindred press release claimed. "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. Despite optimisation efforts in recent quarters, continued losses from our North American operations place pressure on Group profitability and targets."
Pennsylvania was Unibet's top-performing state out of Kindred's five in the American market. The sportsbook took in $263.2 million lifetime since launch in the Keystone State in November 2019 and generated just $43.2 million in bets during the first 10 months of 2023.
Its overall 2023 handle equates to a disappointing 0.8% market share in a Pennsylvania market with a $5.8 billion handle through the first 10 months of this year.
The Unibet handle on Arizona, Indiana, and Virginia also failed to result in a 1% market share in those states.
