Dreaming of big wins
When Ontario announced that it would be opening the first regulated commercial gambling market in the country, most online betting operators could hardly believe their luck. The news coming out of the USA was exciting enough, but relaxation of gambling restrictions on both sides of the USA / Canada border meant that existing, big-name online casinos and sports books appeared to have hit the jackpot. While it could be argued that Canada would always be of less financial significance than the massive opportunities across its more populous neighbor, Canadians’ predilection to have a flutter saw a mad scramble for the first tranche of licenses issued by iGamingOntario.
Canada seemed like the perfect market
To put the figures in perspective, at least sixty percent of Canadians claim to have placed a bet or played at a casino, with the average spend per month around $6.75. It is a pastime that appeals to men and women alike, but men tend to be the bigger spenders. The annual contribution in revenue is around the $3 billion mark, so it is an important sector for the country. However, as with all things in the competitive market, there is a finite amount of money that people can put aside for entertainment. With the increase in the cost of living, many people have had to make tough choices about where they spend their money.
In with an early chance
The Ontario and North American markets seemed incredibly attractive opportunities for global gambling companies. However, just because a company thrives in one market, it does not mean it will automatically succeed in another. Increased competition and the arrival of new challenger online casinos and sportsbooks have meant that the gambling purse in this area of the world might not have been as lucrative as originally anticipated. Unibet might have been one of the earliest in, but they are now beating a hasty retreat.
Not the first to go
They announced in November 2023 that they would be pulling out of the North American market to focus on their European offering. However, it was not until recently that they set a date for withdrawing from Ontario, and so far, they have not indicated when they will leave Arizona, Indiana, New Jersey, Pennsylvania, or Virginia. They left Iowa last year in a bid to improve their performance. So after March 26th, all bets are off on Unibet. They follow other operators who have also left the market, including Eurobet and Willliam Hill.
Challengers are winning
While some European operators are leaving the Ontario market, others are still happy to bring their games to the table. Some that have fared the best are newer names such as PlayOjo, which has caught the eye of experts on review sites like Casino.org and is consistently rated as the number one top-rated online casino. Players and reviews love the gamification, choice of games, and customer experience, to name just a few of its features. Perhaps the bigger names did not expect the level of competition they would be up against. On the other hand, Unibet’s sites have received a good deal of negative feedback and, at one time, even had community pages set up by disgruntled players to trade stories.
The official line
However, that is just conjecture. The official line from Unibet is that they are withdrawing from the North American markets as part of a strategic review to ensure that their shareholders’ value is maximized. In plain English, the Stockholm-based Kindred Group PLC was not making enough money. By consolidating their offerings in other markets, they can reallocate technical and financial resources to gain market share in other jurisdictions. It appears that they might just have spread themselves a little too thinly.
Since they announced the withdrawal, La Francaise Des Jeux (FDJ) made an offer of more than US$2.5 billion to buy Kindred. That is certainly a move that would maximize their shareholders’ interest, and, unsurprisingly, the board of directors unanimously got behind the deal and recommended shareholders accept it. The official acceptance period runs until mid-November, but it is widely assumed that the offer will receive a thumbs up.
A decision that was not taken lightly
Unibet emailed its customers with the news of its departure date from Ontario and said they were working closely with the regulators to ensure a smooth and seamless transition. It added that it would send more details about settling pending bets and decommissioning its “Jackpot Game while urging customers to use bonuses and withdraw remaining funds by March 26th.
They added,
“This decision was not made lightly, as we have worked hard to bring the best gaming experience to our valued players in Ontario. Please be assured that our Customer Support team will remain available to assist you during this time of transition.”
Cutting their losses
Online casinos and sports books are businesses and their aim is to make money. Whether it is an established business or a small start-up, if the money is not there, then they need to regroup, and that is precisely what Kindred is currently doing. As the saying goes, the house always wins. On this occasion, the gambling company knew at least when to cut its losses.
The whole withdrawal from the North American market hardly comes as a surprise. They did not get the traction needed to thrive in the competitive market. For example, in Pennsylvania, they only accounted for 0.4% of mobile gaming revenue in December, while rivals FanDuel had more than 50% market share.
A market moving in the wrong direction
They were not only not getting enough people to spend with them, but their position in the whole market was moving in the wrong direction. In a growing market, their revenue was declining. Its gross earnings for the North American market were down over 10% on the previous year. A note in its quarterly report said,
“The long-term outlook for Kindred in North America has changed since entry. The competitive nature of the market means significant resource is needed to close the gap to market leaders, and at our current capacity, this is untenable. Despite optimisation efforts in recent quarters, continued losses from our North American operations place pressure on Group profitability and targets.”
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