Kindred to Exit North American Market, Eliminating 300 Jobs

On November 29, 2023, Kindred Group (OTC: KNDGF) made the announcement that it will be exiting the North America market and cutting 300 jobs. This decision has sparked speculation that the Swedish gaming company could be up for sale.

The company plans to complete its departure from North America by the end of the second quarter of 2024. Its Unibet brand, which is popular in Europe, has struggled to gain a foothold in the US and is currently only operational in five states – Arizona, Indiana, New Jersey, Pennsylvania, and Virginia. This announcement comes as an update on Kindred’s strategic review, which began in April.

In addition to leaving the North America market, Kindred announced a cost-cutting initiative that includes reducing over 300 employees and consultants in 2024, resulting in an expected annual cost savings of approximately GBP 40 million ($50.51 million). Interim CEO Nils Andén described these moves as “necessary and decisive” and stated that they will allow the company to refocus on its core markets.

The decision to leave North America has also led to speculation that Kindred could be a takeover target. Reports have emerged suggesting that MGM Resorts International and an unnamed UK-based gaming entity have shown interest in acquiring Kindred. Similarly, UK operators such as Flutter Entertainment and Entain Plc could also be potential suitors for the company, as purchasing Kindred would allow them to bolster their market share in Europe.

The news of Kindred’s exit from North America adds to the list of foreign companies that have struggled to find success in the US sports wagering market since the 2018 Supreme Court ruling on the Professional and Amateur Sports Protection Act (PASPA). Despite this, the only foreign operators that have achieved significant success in the US are Flutter and Entain, largely through their control of FanDuel and their stake in BetMGM, respectively.

Overall, Kindred’s departure from North America and the associated job cuts have raised questions about the challenges that foreign gaming companies face in the highly competitive US market, and whether potential acquisition offers could be in the company’s future.