Kindred Appeals Fine - "Continue As Normal"

Fri, 23 Sep, 2022

Kindred will appeal the Norwegian Lottery Authority's fine decision and continue to try to achieve success in the legal system, says Kindred's CEO Henrik Tjärnström. However, until the process is settled, the company does not change anything in its operations.

As Dagens Industri reported on Wednesday, Kindred KIND SDB is facing a fine of NOK 1.2 million per day from 5 October since the company - in the opinion of the Norwegian Gambling Authority Lotteritilsynet - conducts unlicensed money gambling operations in the country through its Maltese subsidiary Trannel. The permit issue is a process that has been going on for several years, but the threat of a fine to Kindred has now materialised with the penalty decision. Lotteritilsynet can issue fines up to NOK 437 million before a new decision needs to be made, the authority told Dagens Industri.

The market also took the news seriously and traded down Kindred's share by 7.2 per cent on Wednesday, corresponding to an unrealised decrease in the company's market capitalisation by nearly SEK 1.5 billion.

How are you dealing with the situation?

"We will appeal the decision of the Lotteritilsynet regarding the issuance of this sanction fee and will continue operating as usual, as long as the legal process is ongoing. We want to see how it pans out," says Henrik Tjärnström.

Is it an option to leave the Norwegian market entirely, to stop offering gambling in Norway?

"We dispute the claim that we have operations in Norway, that is also part of the legal process. We are licensed in Malta and believe that Norwegian customers under current European economic legislation have the right to play on foreign sites if they wish. There is nothing that sets Norway apart from other European states in that respect."

How do you assess the risk of being forced to stop offering Norwegian customers your gambling products?

"Again, time will tell as the process proceeds. But we are not doing anything wrong in Norway today. We accept traffic from Norwegian customers who find us in Malta and that is part of the legal framework that in our opinion prevails here. That's our position."

So far, Kindred has not succeeded in the Norwegian legal processes. As recently as this summer, the Oslo District Court ruled against the gambling company's appeal of the Lotteritilsynet's "cease-and-desist" decision, i.e. that Kindred should be forced to withdraw from Norway. 

Given how limited your legal success has been in Norway so far, is it a wise strategy to continue down that road?

"It is local courts in Norway that have ruled so far, and it is difficult to get the point across in the first points of call. But this is a bigger issue than just for those courts. It will show with the appeal where this ends up", says Henrik Tjärnström.

According to the Kindred boss, applying for a Norwegian gambling license has also proved not to be a feasible way forward. According to him, Kindred has tried several times to apply for one and sought dialogue with Norwegian authorities but has been denied that opportunity. He argues that the Norwegian monopoly, which prevails in practice, rests on the loose ground because Norway also does not meet the exceptions that could justify a monopoly, such as taking extra care of the players or placing higher demands on moderation.

Can you in any way understand the Norwegian government's view that Kindred's unlicensed – and in their opinion "illegal" – gambling offering burdens Norwegian society?

"That's their opinion. They claim that we would be a driver of problem gambling, but we have a lower proportion of high-risk customers in Norway, around 3 percent. Rather, we and the private sector have been a driving force that has put the issue on the table, and I would encourage the Norwegian monopoly to report their figures on how much high-risk gambling they have as well."

Should you have informed the market of the penalty decision you received last week?

"No, this has been an ongoing process that we've been transparent about."

Were you surprised by the market reaction?

"It's not my job to assess the market, we try to be as clear as possible and get our side of the process and communication across. But we are confident that we are doing nothing wrong and look forward to moving towards a locally regulated market in Norway as well."

Kindred's share rebounded in connection with Di's publication on Thursday, from minus 1.1 per cent to just above zero.


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