Kindred Group CEO: North America exit a “painful but correct” decision
Nils Andén offers his thoughts on the move which will see Unibet leave the region by the end of Q2 amid rising costs and competition
Kindred Group CEO Nils Andén has described the firm’s upcoming exit from North America as a “painful but correct” decision.
Writing in the Stockholm-listed operator’s Annual and Sustainability Report 2023, Andén further lifted the lid on the Unibet parent company’s decision to leave North America by the end of Q2.
The operator communicated the decision in November 2023, citing rising costs and lacking the sufficient scale to truly challenge.
Unibet had previously shifted to an igaming-only state strategy in an attempt to focus on online casino gains, but this ultimately failed to come to fruition.
Andén said: “Our decision in 2019 to enter the US market was taken with a view to building our presence in the world’s fastest growing and most exciting market.
“With the repeal of the PASPA regulations the opportunities in the US were seen to be endless by operators, investors, and suppliers.
“Ultimately, the path to profitability in North America proved to be unreasonably long, and significantly more investment was required in order to build sufficient scale. Our decision to exit North America in November 2023 was painful but correct.”
As detailed in the report, Kindred noted £33.8m in market closure of contract termination fees for the US, along with £20.8m in impairment losses on assets relating to the decision to exit the US.
Those figures come as part of a further 300-person reduction in headcount, which Kindred said, combined with the North America exit, should return annualized cost savings of around £40m.
Kindred had previously been live in New Jersey, Pennsylvania, Arizona, Indiana, and Virgina and had penned market-access deals for other states.
In New Jersey and Pennsylvania, Kindred had also deployed its proprietary tech stack to gain an edge in the market.
Andén said the business would like to drive those tech gains into its European and rest of world operations following the US exit.
He added: “Our investment into building a truly global technology stack as part of the North American project will continue to directly support our growth plans in Europe and Australia.
“The decision to exit North America was taken as part of a larger cost optimization effort in order to refocus resources into our core European markets. This also meant that we had to make a number of trusted and respected colleagues redundant.”
Kindred was subject of a £2.1bn bid from French operator FDJ earlier this year in a move that could result in the formation of one of Europe’s largest gambling firms.