Evolution CEO Martin Carlesund believes the iGaming supplier is “moving forward” regarding its licence review with the UK Gambling Commission (UKGC), but has stated that it can’t influence channelisation rate.

Carlesund’s comments came as Evolution reported its first quarter of 2025 results, where it declared a net revenue increase of 3.9% year-over-year to €520.9m (Q1 2024: €501.5m), but a slight EBITDA decrease of 1.1% to €342m (2024: €345.8m) with a margin of 65.6% (2024: 69%).

Last year in December, a review into Evolution’s licence in the UK market was launched by the UKGC. The review was initiated under Section 116 of the Gambling Act 2005, as the Commission identified Evolution games as “being accessible from the UK through operators not holding a Commission licence”.

During the supplier’s earnings call covering its Q1 results, when asked about Evolution’s UK licence review, Carlesund said that the supplier has been fully cooperative with the regulator.

The CEO noted: “We have taken all the actions that they asked us for. We have provided all the information. It’s a process, of course, driven like any regulatory process by their agenda and their timeline. 

“We have a good cooperation and talk a lot to them, and I expect that we’re moving forward. Exactly when it’s closing, I can’t state that because it’s not simply up to me.”

Within Evolution’s Q1 report, the CEO said that the supplier undertook “proactive and self-initiated actions in February to ring-fence additional regulated markets in Europe”, which has had different effects, with “the largest negative revenue impact in markets where channelisation is low”.

When asked about how temporary the effects of ring-fencing would be during the earnings call, Carlesund stated that the supplier isn’t affecting channelisation as it is “dependent on the parameters that the regulators set up”.

“If you put a high tax, 35%, 38% tax, or if you put limitations to what the players can do or deposit rules or other things that actually is an obstruction for the player and against the players will, then the channelisation will go down, equal to any other regulation of whatever that might be.

“If you push the market too hard, the market will find its way to its products in another way. The regulators, when they push it, like they have done, and the channelisation goes down, it’s because players are not comfortable playing on the regulated sites. Then the regulators, in some cases, now move to a repressive measurement. So they want to restrict it even further. They want to invest money in the customs, in the parts supporting, and that’s where we are now.

“The players, they need to want to play on the regulated sites. We can’t do much about that.”

Per product, Evolution’s live casino games revenue rose by 4% YoY to €448.7m (2024: €431.3m), while RNG games revenue increased by 3.1% to €72.3m (2024: €70.1m).

Geographically, Europe was the only region where the supplier saw a decline in net revenue in comparison to the same quarter the previous year, standing at €189.7m (2024: €191m). 

Elsewhere, Asia stood at €201.9m (2024: €197.6m), North America stood at €71.5m (2024: €62.1m), Latin America stood at €36.2m (2024: €33m) while other stood at €21.6m (2024: €17.8m).

Regarding Asia, Carlesund noted that Evolution is addressing criminal cyber activity and is implementing technical countermeasures, but this is putting “pressure on revenue growth”. 

During the quarter, the supplier launched a third studio in the US state of New Jersey, a second studio in Romania, while construction is in progress for studios in Brazil and the Philippines.

Within the Q1 report, Carlesund added that Evolution’s studio in Georgia “continues to operate without disruptions but with reduced capacity,” and a third-party investigation into its operations in the country was conducted in response to a labour dispute.

The CEO said: “During the first quarter, one of the Big Four accounting firms conducted an independent investigation of the Georgian operations, based on the allegations that were spread in connection with the strike last year.

“The conclusions of that investigation have been summarised in a report that clearly substantiates all that Evolution stated during and after the strike on a range of issues, including salary levels, strike participation and workplace environment. 

“This third-party report has now been distributed to the unions and relevant authorities, and for Evolution, the strike is now a closed chapter.”

Evolution’s profit for the period was €254.7m (2024: €269.2m), while earnings per share before dilution were €1.24 (2024: €1.27). 

The supplier’s EBITDA margin estimate for 2025 of 66% to 68% remains in place.

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