Evolution CEO Reacts to Brazil's Betting Ban

Evolution CEO Martin Carlesund described Brazil's sudden ban on licensed betting activities as an "overall negative" development for the sector. The company said it is waiting for clarity on how the situation in Brazil will develop.

Brazilian President Luiz Inácio Lula da Silva imposed a ban on gambling activities in the country at the end of September. The decision came less than two years after the regulated online market opened. As a result, Evolution temporarily closed the studio it opened in São Paulo last year.

During the third-quarter earnings call, Carlesund said that the newly introduced licensed market had made the uncertainty even more concerning. He said it was very unfortunate that a populist agenda could overturn a regulatory framework that had been in place for a year and a half.

In Brazil, the betting industry is awaiting a Supreme Court ruling on whether Lula's ban is unconstitutional. Carlesund said the studio is ready to reopen quickly and that, if this happens, the company is ready to accelerate in Brazil.

Asked whether Brazil revenues could fall to zero if the ban continues, Carlesund said the company would see how players respond. Despite the uncertainty, the company said it is maintaining its full-year profit margin expectation.