Evolution calls Brazil betting ban a total negative for industry

Evolution's chief executive Martin Carlesund has described Brazil's sudden suspension of licensed online betting as a total negative for the sector, telling analysts the move was difficult to square with how recently the market had opened.

Brazilian president Luiz Inácio Lula da Silva announced the ban in late September, roughly eighteen months after the country's regulated online betting regime went live.

Evolution responded by temporarily shutting the live-casino studio it opened in São Paulo last year. Speaking on the company's post-Q3 earnings call, reported by iGaming Business, Carlesund said the sector had been caught off guard.

"I think that everyone is flabbergasted about the situation in Brazil," he told analysts. "It's a total negative for anyone in this business, that it happens in this way."

He went further, arguing that the decision undermined a regulatory system that had barely had time to bed in. "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," he said.

Brazil's Supreme Federal Court is yet to decide whether the ban is constitutional, leaving operators and suppliers without a clear timeline for resolution. Carlesund said Evolution's São Paulo studio could restart quickly once there is clarity, adding the company is "ready to accelerate" in the market if the suspension is lifted.

Pressed on whether Brazilian revenue could fall to zero while the ban persists, he said the market was not isolated from player behaviour elsewhere. "The country as such is not ring fenced, and we will see what will happen with the players," he said, adding that Evolution would simply keep watching developments since "no one really knows what will happen. It could be reopened again."

Evolution has left its full-year margin guidance unchanged despite the disruption. Asked whether profitability targets were still achievable even with no Brazilian revenue in the fourth quarter, Carlesund said the group's outlook had not shifted.

Latin America delivered year-on-year growth of 23.1% in the third quarter, a figure that predates the ban, which only took effect in early October.

Group net revenue for the quarter rose 3.7% year-on-year to €526.1 million ($585.2 million), with adjusted EBITDA up 2.7% to €345.9 million. It was the first quarter since 2024 in which every region grew on a quarter-on-quarter basis.

Africa expanded 23.7% year-on-year and North America 13.6%, but Europe was the laggard, edging up just 0.4% quarter-on-quarter while falling 4.7% against the same period last year. Carlesund called the European performance "not exciting" and said the company "should do better" there.

He pointed to shifting tax regimes and regulatory changes across European markets as a distraction from commercial execution, arguing that a run of stable quarters free of external disruption would allow performance to improve regardless of channelisation rates.

On Asia, where Evolution has previously reported cyberattacks targeting its distribution, Carlesund said the problem remains unresolved even as growth ticks up. The region rose 0.8% quarter-on-quarter and 1.6% year-on-year, which he called a small step forward, while cautioning there is no quick fix to the cybercrime issues involved.

He said Evolution is taking a long-term approach to protecting its product technically and expects the effort to pay off over time, though he acknowledged some volatility may continue in the near term.

Carlesund declined to discuss specifics of Evolution's ongoing legal dispute with Playtech, which stems from a 2020 dossier compiled by intelligence firm Black Cube alleging Evolution supplied games into prohibited and sanctioned markets. Evolution has since sued Black Cube and is pursuing Playtech in a related defamation claim. "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," he said.