Kindred Group, one of the largest gambling operators, has reported gross winning revenue drops for the third quarter of 2019. The recorded drop was measured at a 2% decline…
…which puts this company’s performance at £226.0m so far. Representatives from Kindred were quick to point the finger at Swedish re-regulation of markets as the main culprit for such a drop.
Changing Market Conditions:
The company’s drop in performance isn’t the only such case recorded in Sweden this year. Many other companies are facing the same hurdles that have put Kindred in an unfavorable position. The company has struggled to meet the newly redesigned regulations and adapt to the ever-changing market conditions.
Interestingly enough, the only other market where the brand has recorded a loss is the Dutch market. With the Netherlands slowly shaping up their legal framework for online gambling operations, many operators are finding themselves faced with fines. Dutch regulatory body has recently started to clean house, issuing fines for even the smallest of infractions.
Serving as the company behind Unibet, it was also among the companies that were fined. Namely, they were issued a 470,000 EUR fine in August for ‘offering services to consumers in the country without a license.’
Commenting on the Issues at Hand:
Henrik Tjärnström, chief executive of Kindred Group, shared his input on the whole Swedish situation: “Similar to what we saw in the first half of 2019, re-regulation in Sweden resulted in difficult market conditions in the third quarter. The current terms and conditions make it challenging to attract customers into the system and can lead to worsening channelization. This, in combination with a lower than usual sportsbook margin in September, resulted in significantly lower gross winnings revenue and a £12.8m decline in EBITDA contribution from Sweden compared to the third quarter in 2018.”
When asked to comment regarding the issues Kindred has faced in the Netherlands, Tjärnström only added that the group is facing headwinds in the Netherlands and claims that the root of the problem is the removal of the iDeal payment solution.
With that said, the Group has recorded profit gains in markets other than the Netherlands and Sweden. Its performance in Central, Eastern and Southern Europe have been up 13% compared to the same period last year.
Tjärnström goes on to add: “Outside of Sweden and the Netherlands, we continued to see strong growth in several other markets, including the UK and France. Locally licensed revenue growth was particularly strong with 33% growth, or 13% growth excluding Sweden, compared to the same period last year.”
Being one of the largest online casino operators gives the Group plenty of room to grow and recuperate their losses.
About:
Kindred is one of the largest online gambling companies in Europe. This industry giant has been around for more than 20 years and has since gathered 11 of the most prominent European gambling brands under its wing. The group offers a wide range of services as well as high-end content to their respective clients.
Source: “Swedish difficulties lead to Kindred profit decline” https://www.igamingbusiness.com/news/swedish-difficulties-lead-kindred-profit-decline. iGaming Business.October 25, 2019.
