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Kindred Group announced its plans to exit the US and Canada. The Swedish operator expects to fully withdraw operations in the North American market by the end of Q2 2024.
A cost reduction initiative is part of the withdrawal and includes a reduction of hundreds of employees and consultants during 2024.
Kindred, which operates the Unibet and Casino brand, will exit all North American markets:
- Arizona
- Indiana
- New Jersey
- Pennsylvania
- Virginia
- Ontario
The company saw the US online casinos market as a huge opportunity. After having a rough year in North America, it said it would now concentrate on its “core market footprint”, which involves the UK, Scandinavia and France.
Kindred cut 300 jobs due to its struggles in the US
The reduction process has already started, with Kindred saying it hopes to complete the withdrawal in the next seven months, subject to the regulatory process.
Kindred’s departure and cost reduction initiatives, which include cutting 300 positions, should save about $50 million annually, according to the company’s third-quarter release.
In a Kindred Group news release, Interim CEO Nils Andén, said the move was “necessary and decisive:”
“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.”
Kindred Group’s Q3 financial report showed the company’s struggles in the US online gambling market. In the Q3 results statement, Kindred said its North American operations made a gross win of over $8.0 million, an 11% year-over-year decrease in constant currency.
During the first three quarters, the company’s EBITDA losses amounted to more than $21.6 million. In addition, Kindred’s Q3 North American losses rose to more than $8.2 million. And Cumulative losses since Q1 2021 totaled over $93.0 million.
Kindred Group announced possibility of a sale in April
Kindred announced in April that its Board of Directors unanimously decided to “initiate a process to explore strategic alternatives” for the company. In an April press release, Kindred Group emphasized it would consider “all potential alternatives” to deliver value to shareholders.
As noted, such alternatives could include a sale of the company (entirely or partly) or other possible strategic transactions.
The announcement came shortly after Kindred received final approval from the New Jersey Division of Gaming Enforcement to launch Unibet in the Garden State. The company also had plans to enter Pennsylvania in mid-May, which was when talks of a Kindred sale continued to heat up.
Sources told Bloomberg that a possible buyer could be MGM Resorts International and that Kindred approached other companies like Entain and Flutter.
