CEO Says Kindred “Focused” on Expansion in North America

Henrik Tjärnström says the European online gaming giant will work to increase its presence in Ontario and Pennsylvania in Q3 2022.
CEO Says Kindred "Focused" on Expansion in North America
By
July 29, 2022

The Kindred Group wants to expand its presence in North America but will do so on its terms — meaning launches in select US states and without spending large amounts of money on marketing and trying to woo players to use its gaming platform.

The European online gaming giant also conceded there was some downside when it launched its Unibet brand in Ontario during the quarter.

Specifically, the company lost money when it had to shut down its 32Red online casino in Ontario, and it lost some players in the province when Unibet migrated from offshore to Ontario’s regulated market for online poker, casino gaming, and sports betting.

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Increased Presence in Ontario and Pennsylvania Planned in Q3

During an earnings call last Friday to discuss Q2 2022, CEO Henrik Tjärnström said expansion in North America requires a “focused” approach. Still, the CEO added that Kindred would deploy its Unibet brand in select states, not all of them.

When we see iGaming regulation developing in other states, we’ll be increasing pressure in those states going forward. We’re really keeping our focus on long-term profitable growth. “We’ve always highlighted that we have a long-term view on the North American market,” Tjärnström said. “That remains firmly in place. We know the value of putting the fundamentals in place and then scaling.

“We’re also not going for all the states across North America — we’re doing a select focus on states to start with, especially focusing on the multi-product states.”

Unibet is currently live in Ontario and six US states — Arizona, Indiana, Iowa, New Jersey, Pennsylvania, and Virginia. Tjärnström called Unibet’s launch in New Jersey in September 2019 “a key milestone” for Kindred and said the company would focus on increasing its presence in Ontario and Pennsylvania through Q3 2022.

“We’re doing it our way, in a focused way, and really going for those [states],” he said. “And then when we see iGaming regulation developing in other states, we’ll be increasing pressure in those states going forward. We’re really keeping our focus on long-term profitable growth.”

CEO Says Marketing Pressure “Easing”

Tjärnström also said Kindred was “encouraged” to see some of its rivals coming around to the idea that spending on marketing and promotions to attract players had gotten out of hand and had reached an unsustainable level. The CEO characterized the competition in North America as “fierce.”

We’re really looking forward to the long-term opportunity in the US. “This is nothing unusual for us,” Tjärnström said. “We’re used to this, and the US is no different. At the same time, we’ve seen some behaviors sort of normalizing. We’re encouraged also to see quite a few operators starting to talk the same language as we started talking about the unsustainability of some of the behaviors that have been seen.

“We can also see that, from a marketing point of view, the pressure seems to be easing off a little bit. That again plays to our advantage — now we can put our platform in place, scale, and have the fundamentals in place to get a good return on the investments we will be doing.

“We’re really looking forward to the long-term opportunity in the US.”

Revenue Down in Ontario After 32Red Closure, Unibet Migration

Kindred reported that its North America operations generated $8.8 million in gross winnings revenue (GWR) in Q2 2022, compared to $8.5 million in the year-ago quarter. The company said GWR decreased 8% year-over-year in constant currency.

GWR from its six US states grew 13% year-over-year (1% in constant currency) “with strong development in sports betting,” Kindred said in a slide from its investor presentation for Q2 2022. It added that GWR from Canada “was negatively impacted by the closure of the 32Red business in Ontario and some lost customers upon the migration of Unibet to the licensed domain.”

Regulators in Ontario require operators to exit the gray market before entering the province’s regulated market. Provincial regulators have also warned operators like Kindred not to operate brands in both the regulated and gray markets — hence Kindred’s move to block Ontarians’ access to its 32Red Casino brand in the gray market.

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