Martin Carlesund, CEO of Evolution, expressed his dismay over Brazil's sudden ban on licensed betting, calling it a "total negative" for the industry. This ban was announced by President Luiz Inácio Lula da Silva in late September, occurring less than two years after Brazil opened its regulated online market.
In response to the situation, Evolution has temporarily shuttered its studio in São Paulo, which had just been inaugurated last year. During Evolution's post-Q3 earnings call, Carlesund voiced his concerns regarding the uncertainty surrounding Brazil, especially given the newness of the licensed market.
"I think that everyone is flabbergasted about the situation in Brazil," Carlesund remarked, emphasizing the detrimental impact this sudden shift has on businesses in the sector. He criticized the political climate, stating, "It's highly unfortunate that a populist agenda can overthrow a regulatory framework that has only been in place for a year and a half."
As Brazil's betting sector anticipates a decision from the Supreme Federal Court on the constitutionality of the ban, Carlesund noted that the closed studio could reopen quickly if circumstances change. He affirmed that Evolution is poised to "accelerate" its operations in Brazil when possible. On the potential impact of the ban on Evolution's revenue, he commented, "The country as such is not ring fenced, and we will see what will happen with the players,” while remaining optimistic that the situation could improve.
Despite the turbulence in Brazil, Evolution maintained its guidance for the full-year margin. When questioned about the company's ability to meet profitability targets without revenue from Brazil in Q4, Carlesund reassured that the company’s outlook remains intact.
Evolution's operations in Latin America demonstrated significant growth, reporting a year-on-year increase of 23.1% in Q3, a number unaffected by Brazil's suspension, which commenced in early October.
Looking at the broader financial performance, Evolution's Q3 net revenue climbed 3.7% year-on-year to €526.1 million ($585.2 million), with adjusted EBITDA rising by 2.7% to €345.9 million. This quarter also marked the first time since 2024 that all regions experienced quarter-on-quarter growth.
While Latin America, Africa, and North America showed strong growth rates, Europe presented a different picture, with just a 0.4% quarter-on-quarter uptick and a decline of 4.7% year-on-year. Carlesund labeled the European outcome as "not exciting" and stated, "We should do better in the region."
He further pointed out that ongoing regulatory challenges and taxation issues across European markets have diverted focus from core business operations. "If we can just have a couple of stable quarters in Europe where we focus on actually working with our customers… we will see that we will do better," he stated.
On the subject of cybercrime, Carlesund revisited last year’s challenges with attacks aimed at Evolution’s distributions in Asia. He commented, "Asia increased by 0.8% quarter-on-quarter and by 1.6% year-on-year. It’s one small step forward compared to Q2, but you all know that there is no quick solution to these cybercrime issues that we continue to see." He expressed confidence in the long-term strategies being implemented to safeguard the company’s products.
Finally, when asked about the ongoing legal conflict with Playtech—stemming from an investigation by Black Cube into Evolution’s operations—Carlesund confirmed that the lawsuit remains active and that the company is fully engaged in the legal proceedings. "We’re doing everything we can, and now there’s new steps taken every day," he said.
