Residents of the Keystone State will say goodbye to one of the currently-operating online casinos in Pennsylvania by the end of June.
The Kindred Group announced Wednesday that it will cease its operations in North America by the end of Q2 2024. The European igaming powerhouse deployed its Unibet brand in the US and Canada for online casino and sports betting.
Unibet is currently live in PA for both verticals. It also operates online casinos in New Jersey and Ontario and has online sportsbooks in Arizona, Indiana, New Jersey, Ontario, and Virginia.
Mohegan Sun Pocono is the land-based partner for Unibet Casino PA and Unibet Sportsbook PA. Kindred launched its online casino and sportsbook in Pennsylvania in September 2019.
Unibet Casino PA has never been a large operator in the Keystone State. It accounted for just 1% of the market in October, with $1.5 million in revenue, according to data from the Pennsylvania Gaming Control Board (PGCB).
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Kindred Struggled in North America
Kindred’s upcoming exit from North America is not a surprise — it hinted at such a move seven months ago.
The company announced in late April that its board had retained three firms as financial advisors to assist with a strategic review of its assets and for a possible sale.
At the time, Kindred’s financials for Q1 2023 showed its North American operations had underlying negative EBITDA (earnings before interest, depreciation, and amortization) of £5.5 million, then valued at about $6.8 million USD.
Unfortunately for Kindred, the bad news from North America has continued since then. The company said EBITDA was negatively impacted in Q2 2023 and Q3 2023 as well — with negative marks of £5.1 million and £6.5 million, respectively.
An interim strategic review update included in Kindred’s Q3 presentation on Wednesday outlines a “controlled exit from North America.”
The company cited a “highly competitive market” in North America and said it wants to reallocate resources to core markets “where we see more attractive return on investment prospects.”
Kindred said it hopes to exit from five US states and Ontario by the end of Q2 2024, with the exits subject to regulatory approval.
“The strategic review initiated by the board remains ongoing, and we continue to advance a number of options to deliver shareholder value,” Interim CEO Nils Andén said in a statement. “The board currently believes that shareholder value will be maximized through a third-party transaction.”
In the wake of the asset review, CEO Henrik Tjärnström resigned immediately, and CFO Johan Wilsby said he would step down in the fall.
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The company plans to reduce its global headcount by more than 300 employees in 2024. It’s expected that most of the layoffs will occur in North America.
Andén said in a separate statement Wednesday that “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.”
Kindred also has operations in Australia and Europe. Most (62%) of the company’s gross revenue in Q3 came from Western Europe, followed by the Nordics (24%) and Central and Eastern Europe (10%).
