Unibet Entering Indiana and Iowa Sports Betting Markets
Kindred Group on Tuesday announced a 10-year agreement with Caesars Entertainment to gain market access into Indiana and Iowa – and “potentially other states,” according to a news release – to operate both online sports betting and gaming through its Unibet brand.
Kindred, through Unibet, can immediately begin seeking licenses in both states, which would double its footprint in the United States. Unibet currently operates in New Jersey and Pennsylvania sportsbooks. Its online Pennsylvania sportsbook is operated in partnership with Mohegan Sun.
Unibet’s New Jersey sportsbook is through a deal with Hard Rock Hotel & Casino Atlantic City.
In Indiana, Unibet will ally with a Caesar’s Horsehoe Hammond property less than 30 miles from Chicago, giving it a key outpost to tap into an Illinois market left fallow because of regulatory delays.
Most important, the deal will bring mobile and online betting options to a property battling to compete financially without it.
Unibet Can Tap Into Chicago Market
Sports betting was legalized in Illinois in June, but a launch date remains nebulous and seemingly far-off. So Illinois bettors continue to pour over the Indiana border from the city of 2.7 million to patronize the likes of Horseshoe Hammond and DraftKings-affiliated Ameristar East Chicago.
Ameristar’s January sports betting handle of $73,037,356 led all 13 Indiana providers – $170,813,254 was collected in the state – with $65,993,539 coming from that sportsbook via mobile. Caesars never launched a mobile product for Horseshoe Hammond, negating its proximity as the nearest Indiana sportsbook to the Chicago metropolitan area.
Unibet’s Iowa peg will be at Harrah’s Council Bluffs, which is just across the Missouri River from Omaha, Nebraska, and nestled in the metropolitan statistical area of nearly a million. Mobile betting accounted for about 59% of Iowa sports betting handle in January. Ten of 19 Iowa sportsbooks offer mobile or online sports betting.
Kindred US senior vice president Manuel Stan said he was “thrilled” to expand the company’s American presence with Caesars.
Who's winning U.S. online sports betting right now? In this @EilersKrejcik chart, we show 4Q19 market share—by brand and in revenue terms—across all operational states (ex. NV). FanDuel (live in 4 states) led the way, followed by DraftKings (4 states). Note: * = EKG estimate. pic.twitter.com/1Bk052Ywtl— Chris Krafcik (@CKrafcik) February 12, 2020
“Caesars’ geographical spread in the U.S. gives us a unique opportunity to build our footprint, with Indiana and Iowa next in line and potential other states lined up,” he said in the news release.
Kindred Group will use the Pala Interactive online gaming platform in Indiana and Iowa as it has since launching in November in Pennsylvania. Pala’s services include a player account management system, casino products, integration into third-party casino content, integration with sports betting-provider Kambi and marketing technology integrations.
“As Caesars Entertainment continues to gain state approvals for legalized sports betting in the U.S., we look forward to adding Kindred to our list of sports betting partners in certain states. Caesars can continue to operate its own sports betting offering under the Caesars Sports brand in these states,” Caesars executive vice president Christian Stuart said in the release.
US Sports Betting Launch Muted Kindred Profits
Kindred on Wednesday reported a profit after tax of $39.3 million for the fourth quarter of 2019 and $131.6 million for the year. Underlying costs of gaining a foothold in the burgeoning American market were reflected in tepid profits.
The report stated: “As we noted in our trading update on 13 January 2020, there were some temporary factors that reduced the profit for the fourth quarter. We had below average sports betting margins in many markets, including France. The French turnover-based gambling tax increased the negative effects of the low margins significantly, however the tax system in France changed on 1 January 2020 to a tax on revenues."
"We also had the first full quarter of trading in the locally regulated US states of New Jersey and Pennsylvania. It was expected that the first months of trading in the US would be loss-making which is completely in line with Kindred's experience of launches into other new markets.
“This is logical as revenues grow from zero in response to our marketing investments, which includes initial marketing production costs (USD 2 million) to go live that will be used longer term. I am confident that we will see continued improvements in 2020 as our business in the US grows and our revenues increase. The US is the market with the largest long-term growth potential as regulation gathers pace, with the US online sports betting market estimated to be USD 13.6 billion by 2023 (by the independent research firm Eilers & Krejcik Gaming)."
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