The Kindred Group is up next on the conference line, as publicly traded gambling companies continue to present their quarterly earnings reports.
When compared to the same period last year, Kindred’s online poker revenue increased 47 percent during Q3 2018. The total came to £4.4 million ($5.7 million) for the quarter, pulling the year-to-date tally up to £13 million ($16.85 million).
Poker revenue is also increasing as a percentage of the group’s business. While the absolute share is still tiny at just 1.9 percent, that’s up 23 percent from last year’s figure of 1.5 percent.
In addition to a few smaller brands, Kindred most notably operates Unibet, which provides online gambling and sports betting in more than 100 countries. Its poker platform ranks just outside the top ten in worldwide traffic, according to PokerScout.
Given the landscape, there’s a good chance you’ll be seeing a US version of the platform in the near future.
The Q3 figures for the rest of Kindred’s sports betting and online casino businesses dwarf those for poker, of course. The company’s financial highlights showed:
Here’s CEO Henrik Tjärnström offered the top-down view to investors:
“Despite a 33 per cent increase in betting duties and marketing investments up 24 per cent this quarter, our underlying EBITDA grew by 24 per cent in constant currencies compared to the same period last year (+19 per cent in GBP), showing the scalability of our business model and our continued good cost control.”
Tjärnström indicated that strong margins, a busy 2018 World Cup and overall growth in mobile sports betting contributed to the performance:
“Gross winnings revenue increased by 22 per cent in constant currencies which means that we are continuing to gain market share. Gross winnings revenue from mobile grew by 24 per cent compared with the third quarter last year and amounted to 74 per cent of our total Gross winnings revenue. Of the Group’s Gross winnings revenue 42 per cent came from locally regulated markets.”
In mid-August, Kindred announced that it had paved a path into the US under a partnership with Hard Rock Atlantic City. At the time, Kindred US executive Manuel Stan said the US would likely become the largest betting market in the world.
Tjärnström offered an update for investors in his Q3 report:
“Last year the Group decided to enter the US market and after the US Supreme Court ruled against PASPA in May this year, we applied for an online license in the state of New Jersey. The USA is the world’s largest gambling market and we see it as a great opportunity for Kindred.”
The deal is specifically tailored to online sports betting in New Jersey, but it will almost certainly include additional facets. Although we haven’t seen plans for online poker, Kindred has indicated an appetite for US expansion across all verticals.
The Q3 web presentation covered the scope of its plans.
“Kindred will use SG Digital to get swift access to the market,” stated the first slide. The press announcing its new deal with Scientific Games made it clear that Kindred’s plans extend into markets beyond NJ, as well:
“The agreement covers the state of New Jersey, where SG Digital already has a license, but the aim is to extend the partnership to other U.S. states if, or when, Kindred decides to expand its U.S. presence. Kindred and SG Digital have signed a three-year agreement, with the option to extend thereafter.”
The next slide showed existing and projected timelines for sports betting in the most relevant US states:
Make no bones about it, Kindred is ambitious. And although sports betting is the primary vehicle for that ambition, cross-selling and customer acquisition channels are important. Online poker under the Unibet brand has proven to be a valuable means to that end in other markets.
It’s not alone in employing that game plan, either. Many international operators use online poker as exactly that — a customer acquisition channel. Once customers are on platform, it’s easier to cross-sell them on other products within the group.
Wherever Kindred can profitably introduce Unibet online poker into the US, it likely will. Even marginal profitability should provide enough synergy as a complement to its other gaming verticals.