Kindred Group, an online gaming operator of casino, poker, bingo, and sports betting, announces that the group will continue to exit the North American market expecting to complete the process by the end of Q2 2024. The Company also announces that it will focus on core markets to ensure growth of its operations, as well as on cost effective initiatives that will include a reduction of more than 300 employees in 2024.
Withdrawal from North America:
The Group expects that these activities will result in annual gross savings of around GBP 40 million ($50.7 million) to set off the $18 million loss sustained in the North American market in 2022. Coupled with the 2022 gross gaming revenue of only $5.3 million standing for a 38% lower revenue level than the one reached in 2021, the 2022 loss made Kindred start withdrawing its operations from North America from December 2022.
Strategic Move:
The ongoing strategic move is a result of the company’s April 2023 strategic review of its operations. The exit from North America, set to complete in 2024, will be simultaneous with the cost reduction activities and the organizational structure adjustments aimed to secure a leading position in the key markets and the increased revenue levels. For this purpose, the group announces re-allocation of marketing investments and tech resources to targeted markets, as well as the provision of exclusive content that will ensure the brand visibility.
Redundancies:
Also, Kindred’s commitment to cost efficiency will result in redundancies of more than 300 employees and consultants from North American and other operations during 2024. But the company considers the North American move necessary to reinforce the operations of all the nine companies within the group. Nils Andén, Interim CEO of Kindred Group, said: “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.”
Pulling Out of Norway:
According to a source, Kindred Group is currently present across a number of US states, including Pennsylvania, New Jersey, Virginia, Arizona and Washington State, as well as in Ontario in Canada. At the same time, the company is reportedly pulling out of Norway by the end of 2023 after a long battle with the Norway’s regulator Lotteritilsynet. The collision between the company and the regulator originates from 2019 when the regulator ordered a Kindred’s subsidiary Trannel to cease operations and imposed a daily fine of NOK1.2m ($112,500) to the operator if the subsidiary failed to leave.
According to the source, lawsuits and appeals filed by Trannel and Kindred against the regulator were finally settled by the Borgarting Court of Appeal. In June 2023, the court ruled that the regulator Lotteritilsynet was correct to issue a cease and desist order to Kindred. The verdict made the operator withdraw from Norway to boost its operation in jurisdictions that will no longer include Norway and North America.