A recent investigation by the Gambling Commission, initiated in December 2024, has concluded with Evolution required to pay £4.75 million ($6.4 million) after it was found that the company’s gaming content was available through two operators on six unlicensed websites.
During a Q2 earnings call, CEO Martin Carlesund stated that the settlement will not affect Evolution’s operations in the UK. "I mean, we settled with them [UKGC]," Carlesund remarked. "There are no changes in our way of doing things in the UK for a while, and we have no changes coming up."
Carlesund also expressed concerns regarding recent increases in gambling taxes across Europe, pointing specifically to the UK’s Remote Gaming Duty, which nearly doubled from 21% to 40% beginning April 1 this year. He explained, "When it comes to the balance of the regulatory situation in any jurisdiction, as soon as you raise the tax to a certain limit, you will lose channelisation," referencing the significant drop in regulated services seen in the UK and the Netherlands, where channelisation stood at 50%.
He added, "We need to hope for a better balance in what regulators do. But it’s not for us to decide, and we just act on the rules that are there… raising the taxes is negative for the channelisation."
Regarding revenue, Carlesund described Europe as "the suppliers’ main headache right now" due to consecutive declines in revenue over several quarters. Fortunately, in Q2, the company saw a slight recovery with a 3.5% increase from Q1.
Latin America continues to outperform, boasting a robust 26.3% year-on-year growth, while North American revenues grew by 9.5% compared to last year. However, Asia posed challenges, facing a 3.7% quarter-on-quarter revenue decline attributed to rising cybercrime activity in the region.
Overall, Evolution’s net revenue decreased by 1.2% to €517.8 million in Q2, with EBITDA also slipping to €341 million compared to €345.3 million in Q2 2025. For the first half of the year, net revenue fell by 1.4% to €1.038 billion, and EBITDA dropped from €687.2 million to €676.3 million.
Despite these setbacks, Carlesund expressed optimism about the company’s performance in Q2. "Revenue and margin are moving in the right direction compared to the first quarter, cost control remains strong, cash flow is improving, and we continue to expand in key markets while executing on our product roadmap," he stated.
He likened the company’s journey to a winding road, stating, "The road is almost never straight, but what matters is that we are moving forward. Some curves are harder than others, but they can also be fun. And the same goes for Evolution."
On another note, Evolution's planned acquisition of Galaxy Gaming, initially announced in July 2024 for approximately $85 million, is under scrutiny as the closing period for the deal expires this Friday. Carlesund clarified that the acquisition is not critical for Evolution's business, noting the time and resources spent on the regulatory challenges involved and stating, "Galaxy is a great company; however, due to its size, the transaction is not significant for Evolution. The outcome has no material impact on our existing business, our US operations, or our long-term ambitions.”
According to Evolution's Q2 report, 16% of its net revenue was derived from North American customer IP addresses, trailing behind Asia at 37% and Europe at 33%.
