Kindred reverses Netherlands stance and warns of £12m monthly EBITDA damage
Stockholm-listed operator will temporarily cease to offer services to Dutch consumers after carefully evaluating the “uncertainty that was prevailing”
Kindred Group has now taken the decision to temporarily pull the plug on any services towards Dutch consumers as of 1 October 2021 to coincide with the launch of the licensed market.
The operator yesterday suggested it would adopt a passive approach to the new regulations by allowing players in the Netherlands to access its products without directly targeting them.
This unexpected decision saw the firm’s share price fall by more than 8% on Nasdaq Stockholm as investors speculated about the long-term ramifications of ‘going rogue’.
That stance changed overnight in a last-minute volte-face and Kindred has now pledged to withdraw its international offering to Dutch users, bringing its strategy in line with rivals including Entain and Betsson.
These operators remain subject to the Netherlands Gambling Authority’s (KSA) cooling-off period after being sanctioned for illegally targeting Dutch consumers under the interpretation of the KSA while the market was still unregulated.
Kindred is more exposed to headwinds in the Netherlands than many of its rivals. As a result, the operator expects a negative EBITDA impact of approximately £12m per month, compared to £5m for Entain and £2.1m for Betsson.
Based on Kindred’s Q2 2021 EBITDA of £114.3m, a monthly hit of around £12m would equate to its quarterly EBITDA plunging by more than 30%.
When asked if a direct conversation with the KSA had persuaded Kindred to alter its approach, CEO Henrik Tjärnström told EGR: “There was no dialogue as such. It was more doing our evaluation of the of the current situation and the uncertainty that was prevailing.
“Out of caution, we took the decision to temporarily cease our services,” he added.
Kindred Group CEO Henrik Tjärnström
Kindred did however double down on its position that a letter published by Dutch Minister for Legal Protection Sander Dekker on 20 September did not explicitly request that operators cease to offer their services to Dutch citizens if they are compliant with the country’s prioritisation criteria.
“Kindred’s ambition is to be a sustainable operator in the Netherlands contributing to the Dutch society once a licence is awarded,” said Kindred in a statement.
“This decision has been taken due to recent policy changes in the Netherlands, on which Kindred will seek further clarification.”
Kindred expects to submit a licence application in Q4 2021 and to receive a licence in Q2 2022.
The KSA granted its first 10 licenses this week.
Bet365, LiveScore, GGPoker and tombola were among the international recipients, although KSA chairman René Jansen was clear that the market is only just beginning and that a full picture is yet to emerge.
‘There are still applications pending,” he said. “There is a category of providers that has not yet been allowed to submit a permit application.
“Other providers may also be interested, but are waiting to submit an application because they are not ready yet.
“Strict conditions must be met and strict testing is carried out but there will certainly be more licence holders,” he added.