Kindred Group, one of the behemoths of the gambling industry and the operator behind seminal brands such as Unibet and 32Red, has revealed its third-quarter results for 2023, along with a comprehensive look at the first nine months of the year, and a surprising announcement that the group would be exiting the highly-coveted North American market and cutting 300 jobs in the process.
This is a part of a three-pillar plan to optimize the business and put it in a stronger position for the future, which involves cessation of North American operations, reduction of headcount and slashing operational cost, which result in shifting the available resources on core markets where profitable growth can be achieved, the company believes.
The controlled exit mentioned in the company’s plans begins with an immediate effect and the job cuts will be applied throughout 2024 and will impact various roles. Some specific roles will be less impacted than others, as the company continues to replace and outsource operations to locations with lower costs.
"I am confident that this will create a leaner organization, enhance the Group’s scalability, and improve focus on key growth initiatives," Kindred Group Interim CEO Nils Andén confirmed in an official statement. Andén was similarly confident that owing to these structural changes the company would be able to post an EBITDA of £250m for the full year 2024.
In terms of quarterly performance in Q3 2023, there was more to be desired, but Kindred Group still reported a strong development of its casino segment, adding more active customers. Sports betting activity had subsided a little, however.
The group’s bid for the Dutch gambling market has been a good one, Andén explained, as Kindred had secured a leading position since its re-entry last year and the company’s results also saw a 7% growth in the United Kingdom.
The news that Kindred Group is leaving North America is still received with a heavy heart, though, as the company did invest profoundly in developing its local ecosystem and pursuing further opportunities in the market. Kindred launched a proprietary tech stack in both New Jersey and Pennsylvania, and Unibet’s brand went live in Virginia, Indiana, and Arizona.
This is all good on its own, but Kindred Group has had to face increasing competition not only from established companies but now from new entrants, such as Fanatics Sportsbook and ESPN Bet, meaning rising costs and a less certain future for how well sports gambling would perform for the group locally.
The group argued that it would take considerable resources to make its offer in North America competitive in the face of those new realities.
"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," the chief executive concluded.
Meanwhile, players for the company had hit 1,563,762. Revenue in Q3 reached £283.9m, so ahead of the £277.8m posted over the same period a year ago. The latest update also offered an insight into the company’s performance up to November 23, with B2C down 4% from last year’s results.
Kindred Group has also set out on many ambitious journeys over the past months, one of which is the complete reduction of revenue that originates in harmful gambling.
Image credit: Kindred Group