Kindred confident of leading Dutch position despite regulated market challenges

Kindred Group is confident of cementing a leading position in the soon-to-be regulated Dutch market. Regulated online gambling in the Netherlands has been plagued by delays but should finally go live in 2021 when the Remote Gaming Act is passed into law in April. Operators will be allowed to launch their products in the country six months after this date, with Kindred planning to go live in October, although some licence conditions remain unclear. The Stockholm-listed firm has enjoyed success in the country’s pre-regulated market and CEO Henrik Tjärnström is confident this can continue. He said: “We’re not taking anything for granted and we’re confident that we can have a strong position also after re-regulation.” Sweden re-regulated in 2019 and a difficult year ensued for licensees who had been operational in the country previously as revenue dipped, primarily due to increased competition. Tjärnström believes Kindred can avoid the same situation playing out in the Netherlands.

He said: “We are entering the Netherlands with a stronger position than we had in Sweden, which I think will be important as we see a correlation with market share and the kind of opportunities you will have. “There will also be a relatively high tax rate (29% of GGR for remote gambling) in the Netherlands so it will be interesting to see how that impacts on competition.” Kindred has a dedicated team of compliance experts working across its product portfolio, which are in constant discussions with the Dutch Gaming Authority (KSA). Prospective operators will need to deal with harsh tax fees, increased marketing spend and tougher competition in a legalised marketplace, but Tjärnström insists the overall growth of the market can help to compensate for those extra costs. He said: “If you look at the amount of gambling taking place online today in the Netherlands, it’s relatively small compared to the likes of the UK and the Nordic markets where that number is north of 50% already.” H2 Gambling Capital estimates that figure drops to just 15% for the Netherlands. “There should be an opportunity for the market to grow three-fold or so perhaps over the first five years,” said Tjärnström. “It should be a growth phase and not in a negative way because there will also be customers coming into the locally regulated market with all the benefits that brings from a channelisation viewpoint.” As justification, Tjärnström said Kindred was approaching pre-regulation profitability levels after two years of the market being regulated, which he points out did not look likely 18 months ago.