Kindred Q1 US revenue up 203% as operator continues measured long-term strategy

Unibet operator Kindred Group recorded US gross winnings revenue of £7.4m ($10.3m) in Q1, up 203% on the previous period for 2020 in local currency.

Kindred CEO Henrik Tjärnström said the rise was due to strong player acquisition performance through focused marketing and bonusing efforts during the Super Bowl and March Madness tournaments.

Marketing spend for the quarter came in at £5.4m ($7.5m), while cost of sales and admin expenses reached £8.3m ($11.5m), resulting in an EBITDA loss of -£6.3m ($8.7m).

In the past 12 months the US business has contributed £29m ($40.3m) in gross winnings revenue, which Tjärnström said was significant considering Kindred only launched in the US in Q4 2019.

During Q1, active users increased by 92% year on year across New Jersey, Pennsylvania, and Indiana where the operator was live in the quarter.

Last week, Kindred was granted one of seven online betting licenses awarded by the Virginia Lottery.

The operator launched in the East Coast state today, marking its fourth state to go live in the US to date.

“For us it will be a key state and we are planning to open up a separate office in Virginia and have that as an important part of our rollout into upcoming states,” Tjärnström told analysts and investors this morning.

“We will be the seventh operator to go live [in the state] and as we’ve seen from Pennsylvania that’s a very important metric to follow.

“As in the UK market where we have had a very long-term view and strategy, we’re also confident that that approach will pay dividends for us in the US market, especially over time,” Tjärnström added.

Kindred expects Virginia to reach annual sports betting revenue of more than $370m once the state matures.

Tjärnström said the operator was still in its investment phase in the US and would continue to be throughout 2021.

“We’re expecting to launch in up to two more states during this year and we expect all the states we’re live in to still be in the investment phase,” he said.

“It’s getting to the point where it is more of a conscious decision for us to show profitability or continue to invest in the long-term opportunity.

“As long as we see good growth and strong developments in our portfolio markets, we will continue to invest now rather than later in the US and seize that longer-term opportunity,” Tjärnström added.

He hinted once again at the operator’s long-term plan to bring its in-house platform to the US.

Despite the strong financial performance, Kindred shares were down almost 7% at the time of writing to SEK153 ($18).