Evolution Maintains UK Strategy Despite Multi-Million Pound Settlement

Evolution CEO Martin Carlesund has insisted the company will not alter its UK strategy after reaching a settlement with the UK Gambling Commission over the availability of its games on unlicensed websites.

Earlier this week, the regulator ordered Evolution to pay £4.75 million after an investigation that began in December 2024 found the supplier’s content accessible through two operators on six unlicensed gambling sites.

Speaking during Evolution’s second quarter earnings call, he dismissed suggestions that the settlement would cause operational changes. “I mean, we settled with them [UKGC],” Carlesund declared on the post-Q2 earnings call. “There are no changes in our way of doing things in the UK for a while, and we have no changes coming up.”

Carlesund also warned that increasing gambling taxes across Europe could weaken regulated markets by making licensed operators less competitive. “When it comes to the balance of the regulatory situation in any jurisdiction, not in particular to the UK, but as soon as you raise the tax to a certain limit, you will lose channelisation,” he continued.

“You have seen that in many [regions] such as the UK and the Netherlands, [where] the channelisation reached 50%. And that is not good. So, we need to hope for a better balance in what regulators do. But it’s not for us to decide, and we just act on the rules that are there, and we’re very respectful to those rules, and we understand why they do them, and of course, raising the taxes is negative for the channelisation.”

European recovery offsets some regional challenges

Europe, which Carlesund has described as Evolution’s biggest challenge, recorded positive growth during the second quarter. Revenue from the region increased 3.5% compared with the first quarter.

Latin America was the company’s strongest performing market, delivering revenue growth of 26.3%  year-on-year. North America also posted solid growth, with revenue increasing 9.5% from the same period last year. However, these increases were partly offset by weaker performance in Asia, where higher cybercrime activity resulted in a 3.7% revenue decline quarter-on-quarter.

Overall, Evolution reported net revenue of €517.8 million for the quarter, down 1.2% from the previous year. EBITDA also declined to €341 million from €345.3 million in the second quarter of 2025. For the first half of the year, net revenue fell 1.4% to €1.038 billion, while EBITDA declined to €676.3 million.

Management remains confident despite softer financial performance

Despite lower revenue and earnings, Carlesund said the business is moving in the right direction.

“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,” Carlesund said in comments from the interim report.

“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.”

The company also revealed that Asia accounted for 37% of net revenue during the quarter, followed by Europe at 33% and North America at 16%.

Galaxy Gaming acquisition faces uncertain future after lengthy delays

Evolution’s proposed acquisition of Galaxy Gaming appears more unlikely to proceed. The supplier announced plans to acquire the specialist table games provider in July 2024 for approximately $85 million, but the transaction has faced regulatory delays in the United States.

With the closing deadline expired, either party can terminate the agreement. Carlesund stressed that the outcome would have little impact on Evolution’s strategy.

“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.”

Evolution has reiterated commitment to its UK strategy, following a settlement agreement with the UKGC. The company enjoyed modest revenue growth across its various operational jurisdictions within the first quarter. Its proposed acquisition of Galaxy Gaming has also hit the rocks.