Evolution CEO calls Brazil betting ban a total negative

On the post-Q3 earnings call, Evolution CEO Martin Carlesund called Brazil's sudden prohibition of licensed betting a "total loss" for the industry. The supplier has shut its São Paulo studio for the time being; that facility had been launched last year. According to the account of the call, the country's betting market now waits to learn whether the Supreme Federal Court will deem the ban unconstitutional.

Brazil President Luiz Inácio Lula da Silva announced the ban in late September, less than two years after the regulated online market launched. Carlesund said the timing was particularly troubling. "I think that everyone is flabbergasted about the situation in Brazil," he told analysts, adding: "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."

According to Carlesund, the shuttered studio could be brought back into service at short notice, and Evolution stands "ready to accelerate" in Brazil should the ban be overturned. An analyst asked if Brazil revenue would drop to zero under a continuing ban; he replied: "The country as such is not ring fenced, and we will see what will happen with the players." He went on to say the situation needed watching and that "It could be reopened again."

Evolution kept its full-year margin guidance in place. When an analyst asked whether profitability targets could still be reached with no Brazil revenue in Q4, Carlesund replied that the outlook had not changed. In Q3 the LatAm business posted 23.1% year-on-year growth, though that number predated the Brazilian suspension, which took effect in early October.

Q3 net revenue rose 3.7% year-on-year to €526.1m ($585.2m), while adjusted EBITDA edged up 2.7% to €345.9m. Q3 was the first three-month period since 2024 in which all of Evolution's regions reported quarter-on-quarter growth. Year-on-year growth was 23.1% in LatAm, 23.7% in Africa and 13.6% in North America, while Europe grew 0.4% quarter-on-quarter and declined 4.7% year-on-year.

Carlesund said Europe's showing fell short of what the company expects, telling analysts the region "should do better" regardless of how it is regulated or how low channelisation rates run. He argued that shifting rules and taxes in European markets had drawn focus away from the core business, and he expected a stretch of stable quarters in the region to bring improvement.

On Asia, where Evolution said last year it was facing cyberattacks targeting its distribution, Carlesund said the issue was unresolved. "Asia increased by 0.8% quarter-on-quarter and by 1.6% year-on-year," he said, adding that there was "no quick solution to these cybercrime issues that we continue to see." He said the company was taking long-term technical steps to protect its product and was "playing the long game".

A separate legal fight involves Playtech, which hired intelligence firm Black Cube in 2020 to look into Evolution; the dossier produced by that investigation claimed Evolution had supplied games in prohibited and sanctioned markets. Evolution subsequently sued Black Cube and has pursued Playtech's accountability in the defamation case tied to it. Carlesund's comment on the matter was: "We are in a full lawsuit with them, and that will continue as we go forward. We’re doing everything we can, and now there’s new steps taken every day."