The Unibet brand is the latest North American sports betting casualty as Kindred is closing up shop in the US and Canada.
The exit should be completed by the end of the second quarter next year, according to the company’s third quarter release. That, combined with cutting 300 positions, should save about $50 million a year, the company said.
Unibet is live in six markets:
- New Jersey
Investors sold Kindred on the announcement and its earnings report. The stock closed in Stockholm at 88.92 Swedish krona Wednesday, down 4.18% on nearly 13 times its average daily volume.
Kindred changed US plans last year
The news of the Unibet brand disappearing from the US comes a year after Kindred decided it was taking a different approach to the market.
Kindred announced it would pull its sportsbook from Iowa and focus on states that included iGaming during its third quarter update last year.
The company then announced this January that it would cut its marketing until its upgraded platform launched in new markets. While then-CEO Henrik Tjärnström said that launch could be “in the coming weeks,” the platform did not go live in New Jersey until May and Pennsylvania until July.
Strategic review leads to Unibet closure
Kindred announced in April it was undergoing a strategic review, which included the possibility of selling all or part of the company.
Instead, the review concluded leaving North America would be the best choice:
“The long-term outlook for Kindred in North America has changed since entry. The competitive nature of the market means significant resource is needed to close the gap to market leaders and at our current capacity this is untenable.”
Losses continued despite optimization efforts in recent quarters, which included launching that new platform. That led to pressure on Kindred’s overall profitability and its targets, the company said.
Kindred spent less, made less in Q3
Despite the new platform in those two major markets, Kindred saw gross winnings revenue fall 11% in the third quarter compared to last year.
Kindred was not shocked by the dip, though. While the plan was to ramp marketing back up after the new platform launched, the company saw marketing spend fall 19% in the quarter compared to last year.
That “undoubtedly contributed to lower revenues,” the company said. However, Kindred’s underlying EBITDA loss in North America improved based on the “measured approach to investment levels and reducing losses in the market.”
Short-term financial impact
Cash flow will take a negative hit in the fourth quarter and next year, Kindred said.
Despite those losses, exiting North America is the right move for long-term returns, the company added.
Kindred already paid $5 million in the third quarter to exit its agreement with Penn Entertainment for Ohio sports betting access.