Evolution has shown resilience in Europe as the supplier returned to growth in its home continent just days after confirming it would retain its UK license after a £4.75m settlement with the Gambling Commission.
The group underlined that there is no broader pattern of unlicensed engagement in the UK market, as the firm looks to find stability in the UK market following regulatory changes.
It did, however, highlight that challenges in the UK market are mirrored within the wider European sector, as improving channelisation rates continue to be an obstacle.
Across Europe, Germany is a market that has specifically struggled in terms of elevating channelisation rates; however, there will be optimism that the recent decision to raise slots stakes in the country will have a positive impact on the regulated sector.
Evolution revealed that game shows and live table games. However, continue to be a key driver of success in tougher European markets, which are fraught with regulatory volatility.
The firm is also riding the impact of a significant ringfencing strategy. Whilst it stated that competitors are aggressive in grey markets, Evolution stated it is doing what is right for its long-term strategy and ringfencing off engagement with grey market operators.
Chief Executive Officer, Martin Carlesund stated: “Earlier this week, we reached a GBP 4.75 million settlement with the UK Gambling Commission, concluding its license review.
“The matter mainly related to Evolution content being available on six unlicensed websites, in breach of our terms of supply. We acted immediately when this was identified, and the review found no broader pattern of unlicensed access in the UK. I am proud of how our team has handled the very lengthy review, with professionalism, discipline and a clear focus on doing what is right.
“Today, the currently agreed closing period under our agreement to acquire Galaxy Gaming expires. After today, either party may choose to terminate the agreement. Two years have passed, and Evolution has spent significant time, effort and resources handling the rather large amount of administration required to close this acquisition. 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.
“To conclude: 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. It is great, fun work, and we are always moving forward. I am pleased with the progress we are making across the business, and this is above all thanks to the great work, energy and commitment of everyone at Evolution. With that, I look forward to the remainder of the year.”
There continues to be challenges for Evolution in Asia, where the recurrence of cybercrime impacted the firm’s growth.
Overall there was a revenue dip of 3.7% in Asia for Evolution, largely due to the obstacles of cybercrime and regulatory volatility within the continent.
Carlesund continued: “Asia was the exception to the otherwise positive progress, with a quarter-on-quarter decline of 3.7 percent. The region remains volatile as earlier stated, and increased cybercrime activity could not be fully offset by otherwise relatively favorable development. The volatility is something we continue to work through.
“Other markets, which mainly comprise Africa, also showed some volatility, but with a clear positive underlying development reflected in quarter-on-quarter growth of 14.2 percent. We have a strong position in Live and are also seeing increasing activity in RNG.”
In terms of specific games that fuelled growth for the firm, it pointed out that Ice Fishing was transcending markets and having success globally.
New titles under the Hasbro partnership, Monopoly Roulette and Monopoly Roll’em, were both also cited as growing engagement for the firm.
“Our focus is always to create the most entertaining content in the industry. During the quarter, Ice Fishing continued to attract new audiences across markets and strengthened its position as one of our most successful launches in recent years. Among newer additions, we have launched Monopoly Roulette and Monopoly Roll’em under our global exclusive partnership with Hasbro,” stated Carlesund.
He also stated: “Overall, I am happy with the performance in the quarter. 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.
“Following several quarters of decline, Europe returned to quarter-on-quarter growth of 3.5 percent. We remain cautious about the low channelization rates, but the quarter otherwise showed encouraging activity in several markets, with strong development in the game show category and continued demand for native-speaking tables.”
