During Kindred’s Q3 investors call, CEO Henrik Tjärnström dived further into the operator’s current position in the North American market, stating that he expects profitability to occur for the company in the region by 2026.
Within its recent quarterly report, Kindred highlighted its North American expansion with the Unibet brand as an “important long-term growth opportunity”.
The group’s gross winnings revenue (GWR) from the region came in at $9m for Q3 (2021: $7.86m). GWR from the US was 12% higher YoY, as well as a “strong development” in sports betting.
However, the operator noted that its underlying EBITDA for the region came in at a negative $15.42m (2021: $11.02m). The group also stated it is pulling out of the state of Iowa by the end of the year.
Kindred expects positive North American contribution by 2026
Reflecting on this, and when asked exactly how Kindred expects its North American operations to develop during their recent investors call, Tjärnström stated that the company expects a positive contribution, or to break even in the region by 2026.
The CEO said: “We are now live in seven states, we’re going to reduce that to six after Iowa, and we’re going to increase it to seven again with Washington at the beginning of next year, so we have been on an investment position across our state footprint. That is what we’ve been saying all along that it will take some time, a few years to get to profitability in the US.
“We’re expecting the contribution for 2022 to be negative from a further investment compared to 2021, but then, from 2023 onwards, we will see a gradual improvement. As we said at the CMD, we will be on positive contribution or breakeven, in 2026, across our current state footprint.”
Kindred’s US operations GWR for Q3 were $7.5m (2021: $6.7m), while Canadian GWR stood at C$2.05m, a 30% increase YoY (2021: C$1.57m).
North American quarterly actives grew by 11% YoY, while Ontario accounted for over 10% of the total licensed GWR in North America.
The group also recently partnered with the Swinomish Tribe to open a sportsbook lounge in Washington state in 2023, while its proprietary platform is set to go live in New Jersey in the coming months following regulatory approval.
Following the exit from Iowa, Kindred will only have operations in New Jersey, Pennsylvania, Indiana, Virginia, Arizona, and Ontario. The group’s goal is to be a top ten operator in selected states in North America in the next five years.
Tjärnström added: “We’re very confident that this is a good investment, still for the longer term and we know exactly what we need to put in place and we are doing that. We see already now, with the existing setup, we see some positive signs of developments, and we’re expecting those to become more visible over the coming quarters.”