Evolution closes Brazil studio after online gambling ban

Q3 revenue

€526.1m

Adjusted EBITA

€345.9m

Latin American revenue growth year on year

23.1%

EBITDA margin year to date

65.7%

Evolution closed its Brazilian live casino studio on 5 October, after the end of the reporting period, following Brazil's ban on online sports betting and casino. Chief executive Martin Carlesund said on the company's Q3 2026 earnings call on 23 October that the group could reopen in Brazil at short notice if the ban is reversed. He described the closure as "highly unfortunate".

The presidential run-off on 25 October went to Luiz Inácio Lula da Silva, who took 51.76% of valid votes against Flávio Bolsonaro. Before that vote, on 25 September, he had signed Provisional Measure (MP) 1.394/2026, a text banning online sports betting and casino, and he has promised to defend the prohibition. Lawmakers have a 23 November deadline for voting on the measure. Challenges from the industry associations ANJL and IBJR are set to be decided by Supreme Court Justice Luiz Fux once the election is over.

Carlesund said the closure showed how a "populist agenda can overthrow a regulatory framework that has only been in place for one and a half years". He said Q4 would be more eventful than Q3 as a result, declined to speculate on the final outcome and linked it to Brazil's political calendar, saying the group would know more after the second round of the election.

The group's interim report puts Brazil at "well below half" of Latam revenue. Growth in other parts of the region, the report added, would soften some of the blow. For the quarter, Latam was among Evolution's best-performing regions, with revenue there 23.1% higher than a year earlier, measured by the group's IP-based estimate of where players are located. According to Carlesund, that number "didn't include any effects" of the Brazilian ban.

Argentina, where Evolution already runs two studios, is another market where the group is gaining ground, and Colombia is slated for further expansion, Carlesund told the call. Other Portuguese-speaking markets that the Brazilian studio supplies should feel only a "marginal" effect for the time being, he told analysts.

On the Q4 outlook for Brazil, three analysts pressed Carlesund on whether revenue there would drop to nothing. His answer, given each time, was that the country is not ring-fenced. Whether Evolution will keep earning from Brazilian players via operators holding licences elsewhere is something he left open. "We will see what will happen with the players," he said.

The lack of ring-fencing prompted Andrew Tam of Rothschild & Co Redburn to ask if the closure might even work in the supplier's favour overall. Carlesund pushed back. "I think that everyone is flabbergasted about the situation in Brazil," he said. "It's a total negative for anyone in this business that it happens in this way."

Ben Shelley of UBS raised India, a market where regulatory change brought short-term volatility in Q3 and Q4 2025, and asked if it was a fair parallel. Carlesund drew a distinction with Brazil. "I think that this situation is new, when it's so abrupt and it's regulated, and the operator has paid for a five-year licence," he said. "It's very difficult to say where we will end up." Looking ahead, he named the company's staff in Brazil and the practical fallout from the closure as the most pressing concerns.

How far Evolution's Brazilian cost base might be reduced soon is something Carlesund would not quantify, and he also said a reopening remains an open question for the group. Full-year margin guidance, he confirmed, has not been changed, even though analysts have floated the idea that Brazil might bring in no revenue at all in Q4. The EBITDA margin for the year so far is 65.7%, with 66% targeted for the full year.

Rasmus Engberg of Kepler Cheuvreux wanted to know how much of the cost base is variable. Carlesund offered no number, describing the company instead as "fast in adapting and fast in adjusting" when circumstances change. Such episodes, he added, are part of a broader pattern. "It's not the first time that a single market undergoes volatility or uncertainty, and I'm sure that it won't be the last time either," he said.

Group revenue for Q3 came in at €526.1m, 3.7% higher than a year earlier, while adjusted EBITA reached €345.9m, a margin of 65.8%. Live casino was up 2.6%, and RNG posted growth of 10.1%.