Evolution Gaming was recently fined £4.75 million ($6.4 million) by the Gambling Commission for having its content featured on six unlicensed websites through two operators. This investigation, which began in December 2024, led to the regulatory settlement, yet CEO Martin Carlesund asserted during a post-Q2 earnings call that the settlement will not alter Evolution's operations in the UK moving forward.
"We settled with them [UKGC]," Carlesund stated confidently, emphasizing that there would be no changes in their operational approach in the UK for the foreseeable future.
Carlesund took the opportunity to address the issue of rising gambling taxes across Europe, particularly highlighting the nearly doubled Remote Gaming Duty in the UK, which increased from 21% to 40% on April 1. He warned that increasing taxes could drive players away from licensed channels, stating, "When you raise the tax to a certain limit, you will lose channelisation."
He cited cases in the UK and the Netherlands, where channelisation rates fell to around 50%, warning that such trends are detrimental to the market. Carlesund underscored the necessity for a more balanced regulatory environment, while reiterating Evolution's respect for existing rules and an understanding of their purposes.
Despite a challenging landscape in Europe, where revenue had been declining for several quarters, Evolution experienced a modest 3.5% growth from Q1 to Q2. Latin America emerged as a strong performer for the company, posting a remarkable 26.3% year-on-year growth in revenue, complemented by a 9.5% increase in North America compared to the same period last year.
However, Asia faced a setback, suffering a 3.7% decline in quarter-on-quarter revenue attributed to rising cybercrime activity in the region. Overall, Evolution’s net revenue dropped by 1.2% to €517.8 million for the quarter, while EBITDA saw a slight decline to €341 million from €345.3 million the previous year. For the first half of the year, net revenue decreased by 1.4% to €1.038 billion, and EBITDA fell from €687.2 million to €676.3 million.
Despite these results, Carlesund expressed satisfaction with the Q2 performance, noting, "Revenue and margin are moving in the right direction compared to the first quarter, cost control is strong, cash flow is improving, and we continue to expand in key markets while executing our product roadmap."
On another note, Evolution's deal to acquire Galaxy Gaming, valued at approximately $85 million, may come to a halt as the closing period expires. Carlesund indicated that while Galaxy is a reputable company, the acquisition is not essential for Evolution's operations. He noted the significant effort spent over the past two years managing the complexities involved in reaching a deal, reminding stakeholders that the outcome would not materially impact Evolution’s existing business or future ambitions.
Currently, North America accounts for 16% of Evolution's net revenue, trailing behind Asia at 37% and Europe at 33%.
