Evolution's São Paulo studio is temporarily closed, and its chief executive is waiting on a Brazilian court to decide whether the suspension of licensed betting survives. Speaking on the company's post-Q3 earnings call, Martin Carlesund called the ban "a total negative for anyone in this business," according to iGaming Business.
His sharpest complaint was about speed. "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 told analysts. President Luiz Inácio Lula da Silva announced the ban in late September, and it came into force in early October. Carlesund said the closed studio could reopen on short notice and that Evolution was "ready to accelerate" in Brazil if the courts allow it.
The unresolved point is the court. The Supreme Federal Court has yet to rule on whether the ban is unconstitutional, and Carlesund conceded that "No one really knows what will happen." Evolution has nonetheless kept its full-year margin guidance, even when asked whether it could meet its targets with no Brazilian revenue in Q4. LatAm grew 23.1% year on year in Q3, but that figure does not reflect the suspension.
Analysis: Evolution sells games to operators rather than to players, so its Brazilian revenue depends on licensed operators keeping tables live and on players staying on those channels. Carlesund's answer that "we will see what will happen with the players" shows how much of that outcome sits outside the company's control. The cost of a closed studio falls first on the operator-facing business and on whatever staff the studio employed, although the reporting does not say how many people that involved.
The ban is not the only pressure. Q3 net revenue rose 3.7% to €526.1 million ($585.2 million), but Europe grew just 0.4% quarter on quarter and fell 4.7% year on year. Carlesund said Europe "should do better" and blamed regulatory changes and taxes for distracting from the core business. That explanation is his own view, and it is worth testing against the next two quarters.
In Asia, where Evolution has been fighting product theft through distribution channels, revenue rose only 0.8% quarter on quarter. Carlesund said the problem remains unresolved and described the company as "playing the long game." He declined to comment in detail on the Playtech lawsuit beyond saying the litigation will continue.
This file draws on a public report from iGaming Business. Its source type is industry; we label this story reported. Analysis and reported claims are not independent confirmation.
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