Relatives leaving North America could boost sales
Kindred Group (OTC: KNDGF ) announced Wednesday it is exiting the North American market and cutting 300 jobs. Some industry observers believe this could trigger a sale of the Swedish gaming company.
The operator said the withdrawal from North America should be completed by the end of the second quarter of 2024. Kindred's Unibet brand is popular with European bettors but has failed to gain traction in the United States, operating in just five states: Arizona, Indiana, New Jersey, Pennsylvania and Virginia. Kindred announced a strategic review in April, and Wednesday's news is an update on that process.
In addition to saving on non-employee operating costs, Kindred has overhauled its organizational structure to create a leaner, more efficient organization focused on selective growth initiatives," the company said in a statement. "This includes Reduction of more than 300 employees (including North American employees) and consultants in 2024. The cost reduction initiatives are expected to result in total annual cost savings (opex and capex) of approximately £40 million ($50.51 million). "
Interim chief executive Nils Andén described the austerity measures as "necessary and vital". The company added that these moves will allow it to refocus on its core markets.
Relatives may become takeover targets
While Kindred did not comment in Wednesday's press release, strategic reviews often fuel speculation about a potential sale, as was the case with Unibet's parent company.
In July, reports surfaced that MGM Resorts International (NYSE: MGM ) and an unnamed British gaming company could consider a takeover bid for Kindred. While a deal has yet to be struck, both parties could be considered suitors for Kindred.
Speculation that MGM was interested in Kindred surfaced in May, which makes sense on multiple levels, with Keith Meister's Corvex Management being one of the driving forces behind Kindred considering corporate action. He was also a director of MGM, which was acquired by Sweden's LeoVegas.
Likewise, UK operators such as Flutter Entertainment (OTC: PDYPY ) and Entain Plc (OTC: GMVHY ) may seek to increase their European market share - which could be achieved by acquiring Kindred. A few months ago, Kindred was rumored to be in talks with Entain, Evolution AB, and Flutter.
Another speck of dust falls
With the news that Kindred is planning to exit North America, it’s fair to say that the competitive U.S. sports betting landscape has another casualty.
Since the famous Supreme Court ruling on the Professional and Amateur Sports Protection Act (PASPA) in 2018, many foreign companies have entered the U.S. sports betting market, only to end up selling out or throwing in the towel after failing to find success. sufficient market share.
So far, the only foreign operators to have had significant success in the U.S. are Flutter, through its control of FanDuel, and Entain, through its 50% stake in BetMGM. Even in these cases, FanDuel and BetMGM are largely considered U.S. companies.
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Source: www.casino.org
