How Kindred is addressing regulatory changes in key jurisdictions

Kindred Group has changed dramatically since it was founded by Anders Ström in his London flat in 1997. The Kindred Group, which started with flagship brand Unibet way back when now encompasses 11 gambling brands, some of which are among the most successful in Europe, including brands like Maria Casino and 32Red.

But as any observer of the industry will tell you, the gambling sector has also changed dramatically since Ström set up shop during those halcyon days. The number of consumers of gambling has massively increased, while at the same time there has been a technological revolution in the way that gambling is embraced by the consumer.

However, in that technological revolution the regulatory and compliance requirements for gambling operators, be they land-based or online, have also mushroomed. Operational standards are higher than ever, and more and more operators are running afoul of regulators, not only in Europe but worldwide.

Navigating these regulatory tides in one market is a challenge, but with a company like Kindred Group, which operates in several markets, those challenges are multiplied exponentially. However, as Ewout Keuleers, group general counsel for Kindred Group, explains the wider challenge is maintaining sustainability in your business model.

Ewout Keuleers, group general counsel, Kindred Group

For Kindred that encompasses several values, but in the compliance arena the central value is building on trust. “It implies that in our DNA we take a proactive stance towards compliance as a positive value adding thing. As we are in a regulated industry, one cannot have a sustainable business without compliance.  No licence means no customer,” he says.

Consistency is essential to this approach, keeping the business in line with both market trends and helping to raise standards within its wider group sustainability framework. But it isn’t just about adhering to rules and trends, it’s about inclusivity across the business as Keuleers explains: “We believe that in a highly complex and competitive business, compliance complexity also creates sustainable growth opportunities.”

Complex regulatory standards affect not only those existing markets, where governments and regulators are aiming to raise standards but new markets, where compliance standards can bar entry for operators. “So, it is not only that the business is getting more complex, but also compliance on its own is getting more complex: more rules, more audits, more society scrutiny, increasing standards etc,” Keuleers adds.

The increasing complexity of operating a group business in a multi-jurisdiction, multi-product, multi-channel ecosystem with increasing but legitimate demands from consumers, politicians and societal stakeholders could leave Kindred with a massive headache when it comes to compliance. However, Keuleers believes when addressed with such complexity, a proactive “value adding” approach to compliance is essential, together with a commitment to go beyond current legal requirements.

Swede chariot

One of Kindred’s biggest markets, certainly based on Q1 2019 figures, is Sweden, whose own compliance standards have grown even more complex with the advent of regulation. Kindred, together with several other international operators, have been present in the Swedish market for many years prior to regulation, sheltered under the protection of EU law. However, despite the fact this regulation has changed the market irrevocably, licensing hasn’t changed Kindred’s model for Sweden as much as might be thought. For Keuleers, regulation isn’t just about a licence, it’s about being able to “really show who we are and what we do” for the first time.

“We have been saying from the very beginning that we wanted to contribute more to the Swedish society but have been restricted in doing so,” he adds, highlighting Kindred’s sponsorship deal with Swedish Elite Football as proof of this. The sponsorship deal totalled SEK1bn, the biggest deal in Swedish sports history and includes commitments to combat match fixing and further develop Swedish football.

Indeed, Keuleers believes the Swedish market has a “bright future” ahead of it, given the massive transformation that has occurred over the last 12 months, which has brought many operators out of the shadows and into the light of regulation. There’s now an “increased focus on sustainability” and pressure on operators to be responsible in the eyes of the consumers they serve. “Gambling is not as bad as it is currently portrayed, however we as an industry need to take actions to prove this by being much better at self-regulation,” he explains. This for Keuleers is the second part of showing the wider public who Kindred is.

Promoting a responsible, sustainable industry while also seeking to acquire new customers and generate market share in the new Swedish market was always going to be a balancing act. However, overexuberance by operators, coupled with a hardening regulatory stance, has made that balance even more precarious, creating to some degree the Swedish government’s push for an advertising ban on gambling.

For Keuleers, gambling advertising in Sweden was always going to increase dramatically following regulation, as Sweden has gone overnight from a monopoly system to over 70 operators, all vying for Swedish consumers, while regulations have given them new outlets in which to advertise. On the other side of the coin, Keuleers understands the public’s reaction to this increase, and the need to pursue a more temperate approach to gambling advertising.

Kindred Group’s responsible gaming campaign with ice hockey player Henrik Lundqvist

As Keuleers explains, “we have chosen a different type of mannerism when it comes to how we communicate – with a more distinct focus on a sound and sustainable gambling experience. Such as our responsible gaming campaign with ice hockey player Henrik Lundqvist.” Kindred’s commitment to Sweden remains strong, despite the changes in regulation and the fluctuating nature of the regulator’s interaction with the market.

Put a block on it

Steering a sustainable, compliant gambling business can be a tricky task in an even-handed regulatory environment can be challenging for even the biggest operators. However, when regulatory impediments are placed in a company’s way, what started out as a sure thing can turn into a potentially dangerous loss. For every Sweden and the UK there are hundreds of other potential markets where doors are persistently slammed in the face of operators seeking entry and Norway is no exception.

A significant regulatory impediment has hit Kindred’s Norway ambitions in recent years with the Norwegian government’s hardening stance against international operators, as exemplified in its pursuit of payment blocking measures against firms such as Kindred.

Under Norwegian law, it is not illegal to place a bet from Norway, something which players are entitled to do, and Kindred can exploit thanks to the supremacy of EU law over local laws. In addition, it is not illegal to transfer money out of Norway through foreign payment service providers. However, the same cannot be said of the reverse, as the Norwegian regulator aggressively pursues both banks and operators found to be processing transactions in Norway. The difficult relationship between Kindred and the Norwegian authorities hit boiling point when Kindred was served with a cease and desist letter. Since then it has confirmed it will appeal to the Norwegian Ministry of Culture, Lottery Complaints Board and finally, if that fails, through the Norwegian courts.

Keuleers believes payment blocking and notice to cease activities letters just “underline the weakness in the current regulation and supervision of the Norwegian market”. He further asserts the only way to cure these weaknesses is to end the current monopoly structure and regulate.

Keuleers disputes the legal basis for the Norwegian Gaming Authority’s decision that Kindred should not accept Norwegian customers. He believes the barring of operators from operating licensed activities that they are authorised to operate in other EU jurisdictions is a decision which “is illegal and goes far beyond” the jurisdiction of the NGA. Indeed, Keuleers believes even the Norwegian government does not have the authority to intervene against activities that are lawfully operated in other countries, citing the lack of enforcement powers beyond Norway as proof of this lack of jurisdiction.

Despite quite a stinging assessment of Norwegian regulatory power, Keuleers believes he has a solution for the Norwegian gambling market, and that is to follow the example of its nearest neighbour: Sweden. As he explains: “We have seen examples of other countries, other sectors that have tried to protect old domestic structures just for the sake of it when the modern customers choice, mostly due to new technology and innovation, have forced through a change.”

In a move which could pave the way for this change, Kindred has teamed up with GiG, Betsson and ComeOn! to set up the Norsk Bransjeforening trade association, the primary aim of which for Keuleers is to “enhance the knowledge of the industry in Norway and work on a licensing model for the Norwegian market.” Explaining how this would play out he adds: “Being in dialogue with authorities, NGOs and other stakeholders that are focused on the challenges that are connected with gambling is very important for us. We are convinced that the debate in Norway will benefit from this.”

Responsible gambling

Independent of the individual jurisdictions Kindred operates in, it has always had a strong focus on responsible gambling, something which Keuleers asserts has been part of Kindred’s DNA for over 20 years. In October 2018 Kindred’s Belgium subsidiary ran a full 360-degree campaign with a sole focus on responsible gaming.

As part of this campaign, which aimed to raise awareness of gambling-related harm, Unibet ran a series of initiatives highlighting its different responsible gaming tools “to install a consciousness with customers on the risks of gambling and the help we can provide them with if needed”.

Elaborating on the impact of this campaign, Keuleers explains it received wide ranging appreciation from Belgian players, adding that: “It answered existing concerns within the general public and contributed to building a sustainable relationship with our customers and even with non-customers.”

Aside from flash-in-the-pan advertising campaigns, responsible gambling forms part of Kindred’s commitment to becoming a sustainable company, featuring in its sustainability framework. Keuleers says Kindred is working continuously to improving its work within this field, including collaborating with industry stakeholders and governing bodies alike. To support this collaborative stance, the company hosts a yearly, free-to-attend Sustainable Gambling Conference to facilitate debate and the exchange of ideas, information and best practice around the topic of problem gambling.  Because of this commitment to sustainability, Kindred has now received an AAA-rating from online analysts MSCI, a company which assesses company sustainability within ESG (Environmental, Social Governance) practices.

In the UK, Kindred’s 32Red brand announced a major investment into a new mental health programme in Derby as part of a plan to “reinvent” football sponsorships for the better. Kindred, which sponsors five Championship clubs including Derby County, has committed to investing and developing hubs across Derby where men can seek advice and discuss mental health.

For Keuleers, the real benefits of football sponsorships are that they give the company a link not just to a particular team or club but also to communities that the operator is connected to. Known as ‘Team talk’, 32Red, in conjunction with the Derby County Community Trust, supports men who have mild mental health issues like depression and anxiety using the power of football to engage and offers a secure and friendly space to socialise and talk openly.

Frank Lampard at a Team talk session in Derby

However, for Kindred the redefining of sponsorships towards a more community friendly approach doesn’t only encompass football. In Holland, the operator has previously donated its cycling sponsorship to the Dutch Handicap Sports fund (FGS), an organisation that is committed to increasing participation in sport for disabled individuals, improving the range of sports available and raising awareness.

More recently, Kindred gave FGS its sponsorship rights to the Premier League of Darts event in Rotterdam, where Dutch darts player Raymond van Barneveld played his last competitive darts event. Keuleers believes the campaign led to “massive awareness” of FGS in Dutch society, via its use of TV, social media posts and print advertising.

Looking deeper into Kindred’s philosophy, Keuleers explains that as a customer centric company, “we have always put responsible gambling and providing a safe and secure experience for our players at the centre of our activities.” Highlighting the company’s “strong track record” of responsible gambling enhancements, as evidenced by the number of awards it has won in this area, Keuleers says the company “remains committed to doing the right thing for our customers, and by extension other society stakeholders”.

Looking ahead, Keuleers cites multi-channel awareness campaigns on responsible gambling and self-control measures as evidence of this commitment, adding that the company will always look to develop “new innovative tools and approaches” to addressing responsible gambling.