Evolution CEO Martin Carlesund has highlighted weakening channelisation rates in Europe as a core reason for the firm’s decline in the region.
Speaking on the supplier giant’s 50-minute Q4 earnings call on Thursday, 5 February, Carlesund expressed his frustration on multiple occasions with performance on the continent multiple times.
Revenue from Europe was down 7.8% year on year to €366.7m in Q4 in what was a challenging reporting period for the Stockholm-listed business.
Evolution stated that while it will continue to invest in Europe, it will do so “slightly less aggressively”.
Expanding on Evolution’s stance on the region, Carlesund said the growth of the black market in Europe was having a knock-on effect.
In the wake of the Gambling Commission (GC) announcing a review into Evolution’s licence over some of its games appearing on unlicensed sites, Evolution has implemented various ring-fencing measures to comply.
Carlesund said: “Europe declined quarter on quarter. We believe that we currently have the strictest ring-fencing measures among all providers in Europe.
“In some markets, we see that players turn to unlicensed operators and the channelisation declined significantly.
“The current challenge is not the actual ring-fencing, but instead the channelisation decline in some major countries as a result of regulatory measures.
“Simply put, the players are pushed out of the regulated [arena]. This is bad for the industry. Long term, we believe that the regulatory scale will find its balance again.”
The CEO went on to state that in some cases, it was only able to service half of a certain jurisdiction’s total addressable market due to the significant channelisation challenges.
For example, the Dutch regulator has indicated that channelisation based on GGR has slumped to below 50% in the Netherlands.
Carlesund continued: “We’re not happy with the quarter in Europe. There are a lot of effects on the regulatory measures and the instability of the market.
“Some markets are not developing according to what we want. The overall situation in Europe, where channelisation now drops to 50% in certain countries, affects us.
“We [can] only target 50% of the market. We look forward to getting a more stable environment in 2026.”
Carlesund noted there was no update on the GC’s ongoing investigation into the supplier. Speaking at the company Q3’s results in October, he said he was hopeful of a resolution before the end of 2025.
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Martin Carlesund points to markets with channelisation as low as 50% as drags on performance, while supplier confirms there are no updates on Gambling Commission review
The post Evolution CEO says scale of Europe’s black market is hurting revenue first appeared on EGR Intel.