Kindred remains dedicated to the American marketplace, but they don’t envision reaching profitability until 2026.
Kindred’s chief executive, Henrik Tjärnström, stated during the company’s third-quarter earnings conference call that they anticipate achieving profitability in the states where they operate within the US by 2026, but they will maintain their focus on the market.
“We are currently active in seven states,” he remarked. “We will be withdrawing from Iowa, reducing the number to six, and then expanding back to seven in Washington.”
“We are in a phase of investment in each state, and it will require some time, a few years, to become profitable.”
“We anticipate our contribution in 2022 to be less than in 2021, but we will lessen these losses in 2023, and by 2026 we will be achieving profitability in the states we currently operate in.”
Recently, FuboTV became one of the well-known operators to leave the American market, emphasizing the challenges faced by operators with a small market share in achieving profitability. However, Tjärnström asserted that Kindred will continue to be committed to the market.
Were making great strides and anticipate even more substantial advancements in the future,” he remarked.
Kindred’s new approach in Norway
Besides updating information for markets like the Netherlands and the UK, Tjärnström also discussed Kindred’s recent choice to cease targeting Norwegian patrons after the Norwegian regulator Lotteritilsynet threatened to impose fines.
“We can discuss this later, but we believe the Norwegian market is comparable to other locally regulated markets,” he stated. “It follows a similar pattern to what we’ve observed in Sweden and the Netherlands, where introducing local regulation will be advantageous for everyone.
“We are fully convinced that Norway will move in this direction over the long haul, but this is merely a typical transitional phase before local regulation is put into effect.”
Tjärnström also mentioned that while he couldn’t reveal the expected impact on revenue alterations, he believes that the indications from similar actions taken in the Netherlands before Kindred completely blocked customers there suggest the effect will be minor.
“We can’t provide commentary on [revenue impact], but we made similar changes in the Netherlands, where we didn’t witness a significant impact,” he said. “Naturally, the situation in Norway remains to be observed.”
The Kindred CEO also addressed Belgium, which is on the verge of introducing a decree prohibiting all non-lottery gambling advertising.
The head of Kindred, Tjärnström, stated that although their brand is robust and they are less impacted by the prohibition compared to other operators, he still believes it’s not the ideal strategy.
“As a leading player in the Belgian market, we are likely one of the companies least affected,” he mentioned. “However, overall, it’s a very complex situation.
“Restricting free expression, even for commercial purposes, has negative repercussions. Nevertheless, we are confident in our ability to manage the consequences.”
When discussing returning funds to investors, Tjärnström stated that Kindred will strive for a blend of dividends and stock repurchases instead of concentrating solely on one.
“It’s a combination,” he said. “That’s our usual approach, and we intend to continue doing so.”
