European live entertainment venue supplier Evolution delivered a mixed report card for the first quarter of 2026. The group's net revenue was 513 million euros, a slight decrease of 1.5% year-on-year. Group CEO Martin Carlesund summarized the current core contradiction in one sentence during the analyst call on Wednesday—Europe is currently underperforming. Customer data based on IP address tracking shows that only about 48% of Evolution's revenue in the first quarter came from regulated markets, with the rest still circulating outside the regulatory scope. Carlesund directly pointed out the sharp decline in the channelization rate in the UK, the Netherlands, and Sweden, believing that regulation has lost balance between player protection and entertainment experience, leading to players accelerating their move to unlicensed platforms. In his words, this not only hurts Evolution's business, but the most vulnerable players have lost the protection of the regulated market and are still accessing Evolution's products through unlicensed operators. Meanwhile, North America and Latin America both refreshed historical revenue peaks, with North America growing about 21% in dollar terms, accelerating from 19% in the last quarter of the previous year. Carlesund made it clear that the biggest investment in 2026 will be in the US and Latin America, stating that both regions have huge potential and are still in the early stages of development.
Europe shifts from growth engine to headache, isolation measures drag on profits
Evolution's predicament in Europe did not suddenly arise. Last year, the company was forced to implement a European business isolation plan due to an investigation by the UK Gambling Commission into its illegal market activities, ensuring that products were not accessed through unlicensed platforms. Carlesund has repeatedly complained that this project consumed a lot of funds in 2025, directly dragging down overall profitability. The continued deterioration of the channelization rate was once again brought up at this call—when regulation tightens beyond market tolerance, players do not stop playing, but simply find another place to continue. Evolution's situation precisely reflects this paradox: as a B2B content provider, it needs to comply with the regulatory framework of licensed operators, yet it helplessly watches its products flow to the same players through gray channels.
Carlesund remains cautiously optimistic about Europe's long-term prospects. He believes that regulatory authorities will eventually realize that player protection cannot rely solely on containment and must be guided back to the legal market through more reasonable rules. However, between short-term pain and long-term repair, Evolution clearly does not intend to wait for European regulation to correct itself.
Americas dual engine drive, football betting and new venues in Africa synchronize efforts
In stark contrast to Europe's fatigue, the North American and Latin American markets continued their strong momentum in Q1. In addition to the traditional advantages of live entertainment venues, Evolution recently launched several major new games in the Americas and acquired a developer in Argentina to strengthen local content supply. The online sports betting field also received positive signals, with the UK, Romania, the Czech Republic, and New Jersey having signed online agreements, with betting volume in dollar terms increasing by 24% year-on-year. In Africa, the company continues to grow from a smaller base, with the newly launched "Red Baron" game exceeding expectations, and real money gambling products also beginning to emerge.
PASA official website continues to track global B2B gambling supplier regional strategic adjustments and channelization rate dynamics, noting Evolution's strategic shift from Europe to the Americas, essentially a passive adaptation to the global regulatory fragmentation pattern. When Europe's channelization rate declines due to excessive tightening, the relatively open regulatory environment in the Americas is siphoning global gambling suppliers' investment and content resources. Carlesund is betting that the early dividends of the American market can offset the long-term repair costs of Europe, and whether this regional rotation can outpace the self-correction speed of European regulation will determine the trajectory of Evolution's profits in the coming years.
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