The operator said it had taken the “difficult decision” to withdraw its application for sportsbook and virtual slots licences, and cease all operations from 1 July.
“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,” Kindred explained.
It said the current application processes, and the terms and restrictions for product offerings, meant the regulated market was not sustainable nor competitive enough to withstand offshore competition.
“Therefore, we do not see a foundation for long-term shareholder value and customer experience at the moment.”
As its current operations in Germany are limited, the withdrawal would have an “insignificant” financial impact on the business.
Germany’s Fourth State Treaty on Gambling included a number of strict terms for operators. These include a €1 stake limit for online slots, and a €1,000 loss limit that applies across all operators, with only limited exceptions. A 5.3% tax on turnover, which was extended from online sports betting to online slots, has been widely criticised as unworkable by operators and associations.
Kindred had initially intended to participate in the market, filing an application for a sports betting licence in February 2020, then for its virtual slots permit in 2021, after the new State Treaty came into force from 1 July. A Kindred spokesperson told iGB that the triggering factor for the withdrawal – after previous indications that the operator planned to stay in the market – was that the operator was specifically informed that authorities had made no decision on the applications.
“We were expecting to receive a positive decision on the licence application,” the spokesperson told iGB. “Instead, we were informed that no decision was reached, meaning our application would be pending for an unknown period of time. Which is not sustainable.”
The operator has not ruled out a return, however, noting that its position “may change in the future”.
New players are already unable to register with Unibet’s German site, while deposits are also blocked. However, the site will remain open until 30 June, with players able to bet with their existing balances and withdraw funds until this date.
As a result of its withdrawal, Kindred added, it would focus instead on other strategic projects.
“We are dedicating full attention to growing our North American market, achieving greater product control with the Kindred sportsbook platform and the acquisition of Relax Gaming, expanding our single platform vision, and achieving our ‘Journey towards zero’.”
The business is also poised to return to the Netherlands igaming market in the near future. It withdraw from the Dutch market in October 2021 as local gambling laws required all businesses without licences to block Dutch customers – something it failed to do before that point. However, it received a licence earlier this month that will allow it to relaunch.
Kindred’s share price has largely been resilient in the face of the news. Its share price declined from SEK99.00 on 10 June to SEK93.08 at the time of writing (17 June), a decline of 6.0%.
Original article: https://igamingbusiness.com/kindred-to-withdraw-from-germany/
