Kindred’s Unibet will exit the German igaming market due to slow licensing and tight regulations.
Germany.- The Swedish igaming operator Kindred Group has announced that it will withdraw its Unibet brand from the German market due to slow progress with licensing and the tight restrictions in the regulated market. It has withdrawn its sportsbook and online slots licence applications and will halt operations in the country from July 1.
New players can no longer register on Unibet’s German site and deposits have been blocked. The site will remain open for existing players to bet and withdraw funds until June 30.
Kindred said it has been a “difficult decision” but suggested that it had doubts about the financial viability of the German market. It said the application processes, and the terms and restrictions on the market, were unsustainable and would not allow it to stand up against competition from unlicensed offerings.
It said: “Our long-term strategic direction sets out locally regulated markets as the core engine for our growth, however, licence application procedures, licence conditions and the regulatory environment need to be transparent, sustainable and financially viable for a market to be competitive.”
It added: “We do not see a foundation for long-term shareholder value and customer experience at the moment.”
Kindred said the withdrawal will not have a significant impact on its results since its operations in Germany were already limited.
Many observers have suggested that Germany’s new regulated igaming market will struggle to channel players due to a €1 stake limit for online slots, €1,000 monthly loss limit and a 5.3 per cent tax on turnover.
Kindred had applied for a sports betting licence in February 2020 and for online slots last year but said the process was taking too long, with it yet to receive a decision. It has not ruled out returning to the market in the future.
Unibet returns to the Netherlands
Meanwhile, Kindred has obtained a licence from the Dutch gambling regulator, de Kansspelautoriteit (KSA), to launch its Unibet brand in the Netherlands. It had been blocking Dutch players since the launch of the regulated igaming market in October while it took steps to secure a license, a process that required it to wait for a cooling-off period to pass.
Kindred had seen a significant impact on revenue as a result. Revenue for the first quarter was down 31 per cent year-on-year.
Gross winnings revenue (B2C) was down 31 per cent to £242.4m, largely because of the block on customers in the Netherlands. Outside of the Netherlands, gross winnings were down 7 per cent (or 3 per cent in constant currency).
The New York hedge fund Corvex Management is pushing Kindred Group‘s board to investigate selling the company after it reported that it now owns 10 per cent of the group’s shares and voting rights. The activist investor, which is run by Keith Arlyn Meister, made a statement disclosing its stake to comply with Swedish regulations.