Kindred Group Shakeup as It Loses Norway Gaming Lawsuit, Exits Germany

Gaming operator Kindred Group is having a rough month. Its operations in Europe are under fire, losing an ongoing court battle in Norway and saying auf Wiedersehen to Germany.

Kindred Group CEO Henrik Tjarnstrom in a company file picture. The global gaming company is losing its battle in Norway and also giving up on Germany. (Image: Kindred Group)

Through its Trannel subsidiary, Kindred has maintained its Unibet platform in Norway as it fought against the country’s monopolistic stance on gambling. It was likely a lost cause from the start, as it didn’t have a legal basis for its claim.

An Oslo district court judge just denied its legal fight against the country. As a result, and without a Norwegian gaming license, its future there is in doubt. However, the Stockholm-listed operator has already announced that it will appeal the decision.

Norway Not Playing Nicely

Kindred’s argument has been that the monopoly wasn’t fair. While that may be true, it’s still legal. However, against the threat of daily fines of €120,000 (US$134,000), it kept its Unibet, Mariacasino, Storspiller and Bingo brands going.

Norway’s gaming regulator ordered Kindred to stop its operations on April 5. Therefore, in theory, the operator could receive a bill of €9.48 million (US$9.96 million) as of June 23 for continuing to operate. However, since it is appealing the court’s decision, the bill could be higher.

In responding to the verdict, Kindred stated that it will “continue to dispute and will appeal as we seek to deliver a free, open, competitive and safe gambling environment in Norway.” It added that a “transparent and objective licensing regime is the only way to obtain a well-functioning gambling market that balances consumer entertainment and consumer protection. We will continue to work towards this goal.”

The fight has been ongoing for more than three years. Finally, in April 2019, the Norwegian Gambling Authority told Trannel to halt its operations because it didn’t have a license. Kindred then appealed to both the Ministry of Culture and the Lottery Authority Board. However, it lost.

The Oslo District Court then received an appeal, which it also shut down. As a result, Kindred’s next strategy was to sue Norway, which led to another defeat.

Kindred Exits Germany

Kindred will likely have no alternative but to close up shop in Norway, something it is already doing in Germany. The company has announced that Unibet, its flagship brand, will withdraw from the country’s market starting July 1.

The company informed local authorities that Unibet has decided to cancel its sportsbook and virtual slot license applications. It explained that Germany’s Fourth Interstate Treaty on Gambling (GluNeuRStv) was confusing and convoluted, and didn’t lend itself to the creation of a responsible, mature market.

Our long-term strategic direction sets out locally regulated markets as the core engine for our growth. However, license application procedures, license conditions, and the regulatory environment need to be transparent, sustainable, and financially viable for a market to be competitive,” Kindred stated in a press release.

Kindred added that it decided to withdraw after assessing market conditions. That led to the determination that the GluNeuRStv application procedures and restrictions on products were “not sustainable and competitive” against unlicensed alternatives.

The company views it as only a minor setback. It will now focus its efforts on increasing its North American presence. It will also dedicate more resources to assume “product control through the Kindred Sportsbook Platform and the acquisitions of Relax Gaming.”

Kindred concluded that there is no foundation for long-term shareholder and customer value. However, it left the door open, saying that it could reconsider its decision in the future.

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