Evolution has closed its Brazilian live casino studio following the country’s gambling ban, although chief executive Martin Carlesund says the supplier could restart operations at short notice.
The studio shut on 5 October, after the third-quarter reporting period. Speaking on the company’s 23 October earnings call, Carlesund criticised the reversal of Brazil’s regulatory framework while maintaining Evolution’s full-year margin guidance.
Carlesund Criticises Abrupt Ban As Political And Legal Uncertainty Persists
Carlesund called the closure “highly unfortunate” and said it demonstrated how a “populist agenda can overthrow a regulatory framework that has only been in place for one and a half years”.
He expected Q4 to be more eventful than Q3 but declined to predict the outcome before Brazil’s presidential runoff. “We will know more after the second round of the election,” Carlesund noted.
President Luiz Inácio Lula da Silva subsequently defeated Flávio Bolsonaro with 51.76% of valid votes on 25 October. Lula signed Provisional Measure 1.394/2026 on 25 September, banning online sports betting and casino, and has pledged to retain it.
Congress has until 23 November to vote. Supreme Court Justice Luiz Fux is expected to consider challenges from industry associations ANJL and IBJR after the election.
Latin American Revenue Growth Has Not Yet Reflected Brazil’s Closure
Evolution’s Latin American revenue grew 23.1% year on year in Q3, based on estimated player location by IP address. Carlesund said the result “didn’t include any effects” from the ban. “If Brazil reopens its market, we are ready to accelerate,” he said.
The interim report puts Brazil at “well below half” of regional revenue. Growth elsewhere should offset some disruption, with further Colombian expansion planned and momentum building in Argentina, where Evolution operates two studios.
Carlesund described the current impact on other Portuguese-speaking markets served from Brazil as “marginal”.
Questions Remain Over Whether Brazilian Revenue Will Disappear In Q4
Three analysts asked whether Brazilian revenue would fall to zero. Carlesund repeatedly responded that the country is not ring-fenced, without confirming whether revenue might continue through operators licensed elsewhere.
“We will see what will happen with the players,” he said. Carlesund rejected Andrew Tam of Rothschild & Co Redburn’s suggestion that this could make the closure a net positive.
“I think that everyone is flabbergasted about the situation in Brazil,” he added. “It’s a total negative for anyone in this business that it happens in this way.”
Management Prioritises Employees While Assessing Costs And Reopening Prospects
Asked by UBS analyst Ben Shelley whether India’s regulatory disruption in Q3 and Q4 2025 provided a comparison, Carlesund said Brazil presented a different situation.
“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.”
Employees and the practical consequences of closure were immediate priorities. He did not quantify potential cost reductions or the variable cost base requested by Kepler Cheuvreux analyst Rasmus Engberg.
He said the company is “fast in adapting and fast in adjusting” and viewed individual market uncertainty as a recurring challenge for the group’s operations.
Evolution Retains Margin Guidance As Quarterly Group Revenue Increases
Evolution maintained its 66% full-year EBITDA margin target against 65.7% year to date. Q3 revenue increased 3.7% to €526.1 million, with adjusted EBITA of €345.9 million and a 65.8% margin. RNG revenue grew 10.1%, while live casino revenue increased 2.6%.
Brazil’s reversal highlights the difficulty of planning investment around licences when political decisions can abruptly change market access. Evolution’s reopening readiness offers flexibility, but retained costs and uncertain revenue complicate the outlook. The unchanged margin target puts more weight on operational adjustments and regional growth.
Explore more:
Share
8 views
