Evolution, a live casino powerhouse, released its official report for the second quarter of 2024, announcing that its earnings grew to £428.2m. This is a 15.3% rise, proving the company remains on the forefront of the iGaming industry.
However, since Evolution changed its main course and added a new vertical after acquiring a few reputable slot game providers, the fact that this business segment contributed just 1.4% to Evolution’s Q2 revenue growth raised some serious questions.
RNG Segment Continues to Struggle
Being known primarily for its live dealer business, Evolution remains live casino leaders. The numbers prove this statement, as the company revealed that its core live business earned £369.1m, which is 17.8% year-on-year growth in Q2.
Europe and Asia are the main markets powering Evolution’s growth. The live dealer segment and operations in these regions increased EBITDA by 10.9%, or £291.3m. Moreover, Evolution CEO Martin Carlesund has said that the evolving Asian market is Evolution’s fastest-growing region, contributing an impressive 22% to the overall growth with £169m.
However, in 2020, Evolution started expanding its business, venturing into a new area – online casino slots. It all began when Evolution first acquired NetEnt and Red Tiger. The new strategy continued with the purchases of Big Time Gaming and Nolimit City.
These slot brands were already well-established game providers, so becoming part of Evolution’s family made sense. Still, we are now witnessing that these companies are encountering difficulties. The entire Evolution’s RNG segment accomplished a modest 1.4% growth in Q2, accounting for £59.2. Moreover, the RNG business accounts for only 13.8% of Evolution’s total revenue.
Regulus Partners, a global strategic advisory business, reported in February 2024 that Evolution’s performance in the RNG sector was “embarrassing”. Moreover, the report also says that Evolution is “failing to execute” the promising RNG strategy. The criticism seems well-grounded, as proved by the numbers from the Q2 report.
Simply put, Evolution’s slot business didn’t manage to repeat its live casino success despite huge investments. Let us remind you that Evolution acquired NetEnt in 2020 for a staggering £1.72bn. However, the experts still believe this vertical needs more time to mature.
We also hope they will turn the page, as Evolution has several top slot providers under its wing. The failure will negatively impact players and the industry since Nolimit City, NetEnt, BTG, and Red Tiger are synonyms for quality and innovation.
USA, LATAM and New Acquisitions
As more and more US states legalise online gambling, Evolution takes each opportunity to broaden its reach in the States, signing partnership deals with the best legal casino sites in the country and launching new live dealer titles for US users. For example, the group announced in February 2024 a new agreement with Caesars Entertainment to establish new studios across several US states.
Also, Evolution recently revealed its plan to fortify its US presence by acquiring Las Vegas-based Galaxy Gaming. The provider offers classic, RNG-powered online table games and supplies dealer terminals to land-based casinos in over 130 countries, including 28 US states. The latest announcement hints that Evolution may be trying to bolster its US market presence and also strengthen its global strategic position.
After the news that Brazil and the Philippines will regulate their gambling markets, Carlesund has also confirmed that Evolution eyes these regions, preparing for new business opportunities.
Will Evolution’s RNG Business Survive?
Martin Carlesund says that Q2 results don’t truly represent the company’s operations and overall performance. This is particularly important for the online slots vertical. Still, the CEO promises improvement in the second quarter, saying that the group will increase the number of game launches, with more than 100 games planned to be released this year.
Finally, the company looks forward to more live tables set in the new studios in the Czech Republic and Colombia, which should open by the end of this year.
