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Evolution: How Two Swedish Friends Built the Casino Inside Your Phone
I. Introduction: The Quiet Giant of Online Gambling
Picture this: It's 2006 in Stockholm, and two childhood friends are sketching out an idea that seems almost comically simple. What if you could bring a real casino—complete with human dealers, spinning wheels, and the palpable tension of a live game—directly into someone's living room? Not an animated simulation. Not a random number generator spitting out predetermined results. But an actual person, dealing actual cards, in real time, streamed to gamblers around the world.
Nearly two decades later, Evolution AB is a Swedish gaming technology company headquartered in Stockholm that develops and licenses B2B live casino software for online casino operators. The numbers are staggering: Evolution wrapped up 2024 with a solid financial performance, reporting a 14.7% increase in net revenue to €2.06bn despite operational hurdles including cyber-attacks in Asia and disruptions at its Georgian studio. After paying €194.9 million in taxes, net profit was €1.24 billion.
With ~49% CAGR since its 2015 IPO, 60%+ EBIT margin, and global dominance in live casino, the story of Evolution is truly one for the books. This is a company that has transformed from a startup with BBC news playing in the background to prove their games were live into the most profitable gaming software company on the planet.
The central question driving this deep dive: How did Evolution achieve such dominance in a market that didn't even exist when they started? The answer lies in a masterful combination of first-mover advantage, the brilliance of the B2B platform model, product innovation that created entirely new categories, and strategic acquisitions executed with surgical precision.
Since its inception in 2006, Evolution has developed into a leading B2B provider with 800+ operators among its customers. The group currently employs 22,000+ people in studios across Europe, North- and South America.
II. The Online Gambling Landscape: Setting the Stage (2006)
To understand Evolution's genius, we must first understand what online gambling looked like in 2006. The industry was booming, but in a fundamentally primitive way. Online poker rooms were thriving following the "poker boom" catalyzed by Chris Moneymaker's 2003 World Series of Poker victory. Digital slot machines churned away on countless websites. Sports betting platforms processed bets on football matches and horse races.
But there was something crucial missing: the authentic casino experience.
If you wanted to play blackjack online in 2006, your options were grim. You'd sit in front of a screen watching animated cards flip over, controlled entirely by random number generators (RNG). There were no dealers. No banter. No shared experience with other players. No way to verify that the virtual shuffle wasn't rigged. The experience felt sterile, solitary, and—for many players—untrustworthy.
The few live dealer operations that existed were embarrassingly crude. Low-quality video feeds would lag and buffer. Dealers often seemed bored or unprofessional. The technical infrastructure simply wasn't there to deliver anything resembling the excitement of walking into a Monte Carlo casino.
This was the trust problem at the heart of online gambling. Players not only found the live casino games entertaining, but also trusted them more than their digital equivalent, which they felt were more likely to be tampered with. When you can't see the cards being shuffled, when you can't watch the roulette wheel spin, how do you know the house isn't cheating?
Understanding the ecosystem is essential here. Online gambling operates across three distinct layers: operators (the consumer-facing brands like Bet365 or DraftKings), suppliers (the companies that provide the games and technology), and regulators (the government bodies that issue licenses and enforce rules). Evolution would plant itself firmly in the supplier layer—a strategic choice that would prove enormously valuable.
According to the IPO prospectus, Europe's gambling market in 2013 was valued at €95.9 billion, with online gambling making up €14.5 billion (15% of the whole market). Live casino games accounted for just €771 million, or 0.8% of the total market.
That 0.8% number is critical context. When Evolution was founded, live casino was a rounding error in the overall gambling industry. The founders weren't entering an established market—they were betting that one could be created.
III. Founding Story: Two Childhood Friends and an Eclectic Journey
Jens von Bahr and Fredrik Ă–sterberg weren't cut from the same cloth as your typical tech founders. Before Evolution, Jens had lived a life that could best be described as eclectic. He wore many hats along the way: running a second-hand sportswear store, working in Vietnam's travel industry, earning an MBA in Australia, and serving as CEO of makeup operations in Sri Lanka for Oriflame.
Swedish-born Jens von Bahr worked a grab-bag of jobs before finding his calling. He worked in leisure travel in Vietnam, started a second-hand sportswear store, and ran an advertising agency. He'd eventually get an MBA in Australia, and thereafter became the head of makeup company Oriflame's Sri Lanka operations. All along the way, he'd kept in touch with his childhood friend Fredrik Ă–sterberg, who was working at the sports website Sportal.
Fredrik's path was different but equally formative. Meanwhile, Fredrik was carving a different path in the digital sports world. He worked with Sportal, a pioneering digital sports media platform, during the early days of the internet. His experience gave him a front-row seat to the tech world's rapid evolution, and he began to grasp the untapped potential of online platforms to reshape traditional industries.
They watched many of their peers get rich during the dot com boom and started thinking about things they could do together. The idea of sports betting was floated, but there were a plethora of sites that were already working on that and poker. However, they wondered if there was something more in the gambling realm they could offer. While they themselves were never big gamblers, they thought online gambling had a lot of potential.
The idea of Evolution was born in Sweden in 2006. It was inspired by the world-renowned casino in Monte Carlo. Using the rapidly emerging technology, Evolution founders Jens von Bahr, Fredrik Ă–sterberg and Richard Hadida wanted to bring the excitement from the live player experience into the home.
Richard Hadida became the creative catalyst. As the third co-founder, he brought connections that would prove essential. Richard Hadida, Jens von Bahr, and Fredrik Osterberg, upon founding the company in 2006, had a vision for a company whose core values and principles are still in evidence today.
The backing came from an unexpected source. Richard introduced Jens and Fredrik to British real estate moguls Richard and Ian Livingstone. Their investment provided the capital needed to transform a concept into a company. With seed funding secured, Evolution Gaming was officially born.
IV. Early Years: Building the Riga Studio (2006-2012)
The founders faced an immediate decision: where to build their first studio? They couldn't afford Western European wages or real estate prices. They needed a location with reliable internet infrastructure, access to multilingual talent, and favorable business conditions.
They set up their first studio in Riga, Latvia, not with the intention of becoming just another gambling operator, but to provide a next-level experience for players. Latvia offered everything they needed: a talented, educated workforce; proximity to major European markets; reasonable costs; and an emerging tech infrastructure that could support high-quality video streaming.
The early product development was grueling. Evolution invested in high-definition cameras at a time when HD streaming was still relatively novel. They built custom software to manage live dealer workflows. They hired and trained professional dealers who could operate under the pressure of continuous live broadcasting.
In our first studio in Riga, Latvia, we had the BBC newscast running in the back to prove that the game was done in real time. We started out trying to copy a land-based casino, and then realized that we are everything BUT a traditional casino.
That BBC detail is delightful and telling. Players were so skeptical of online gambling that Evolution had to prove their games weren't pre-recorded. By showing a live news broadcast in the background, players could verify that they were watching actual real-time gameplay. It was a scrappy, almost comical solution to the trust problem—but it worked.
Whereas since inception the focus was only on serving desktop PCs as early smartphones weren't conducive to an enjoyable gaming experience, by 2012 the devices and connectivity environment improved enough that Evolution launched mobile gaming.
By 2012, Evolution had proven that the concept worked. The question was whether they could scale it into a real business.
V. The 400% Proof Point: Validation (2010)
The breakthrough moment came in 2010, and it changed everything.
Just a year later, in 2010, the first gaming operator experimented with it by dedicating an entire website tab to live casino on the top of their site. In short order, the question of whether this would be something customers wanted was settled forever: the operator's website activity quickly increased 400% y/y with a flood of increased betting.
Evolution's sales pitch became much easier as gaming operators saw a clear proof point and lined up to be added carriers of Evolution's games.
Consider what this 400% increase represented. This wasn't incremental improvement. This was a fundamental revelation about consumer behavior. Players weren't just willing to try live casino—they were hungry for it. The authenticity, the social experience, the trust factor—all the hypotheses that Evolution had built its business on were validated in dramatic fashion.
The B2B model brilliance became clear. Online casino operators—companies like bet365, William Hill, or Unibet—typically don't develop their own games. They act as platforms, carrying games from various suppliers. Live casino was an entirely new product category for them to upsell their existing user base. And crucially, once one major operator saw the results, every competitor needed the same capability or risked losing customers.
By 2010, Evolution had established itself in the European market and won the EGR Live Casino Supplier of the Year award for the first time – a title it would go on to secure on multiple occurrences.
This created a classic network effect in B2B software. Each new operator that signed with Evolution added credibility and distribution. Each success story made the next sales conversation easier. And because Evolution was the clear market leader, operators had limited alternatives.
VI. The Race to Regulated Markets (2011-2014)
With proof of concept established, Jens and Fredrik executed a strategy that would define Evolution's competitive moat for years to come: be first into every newly regulated market.
Jens and Frederik decided to move to Malta, the center of online gaming in Europe, and worked on getting more licenses for other countries. They wanted to be the first into every market so they wouldn't give competitors who were starting to develop similar offerings a chance to catch up. In 2011, they would become the first operator in the newly regulated Italian market.
This volume pushed their Latvian studio to critical mass and operated 24/7 to meet player demand. Being first to win licenses would be a mainstay of their growth strategy—in 2012 they became the first certified Live Casino supplier in the Danish markets, and in 2013 they partnered with a land-based casino to be the first to be certified to offer games in Spain.
Why does being first matter so much in regulated gambling markets? Because regulatory approval is slow, expensive, and relationship-dependent. Once an incumbent supplier establishes trust with regulators and builds the necessary compliance infrastructure, they have massive advantages over new entrants. Regulators are naturally cautious—they'd rather work with known entities than take risks on newcomers.
In 2013, Evolution launched its 100th live table at the Riga studios, becoming the largest single-site casino operation in Europe, and opened a studio in Spain. A studio in Malta opened in 2014.
By 2014, Evolution had transformed from a startup experiment into Europe's dominant live casino provider. The company revolutionized the live casino segment and built a foundation that competitors would struggle to match for years to come.
VII. The 2015 IPO: Signaling and Skin in the Game
Evolution was listed on Nasdaq First North Premier, Stockholm, on March 20, 2015, and subsequently opened a studio in Belgium.
It went public on March 20, 2015, on the Nasdaq First North Premier Exchange, a European platform for high-growth companies, valued at around €330 million (about $340 million). Evolution did not raise any money at the IPO; instead, one can assume it served as a strategic signal to the industry that Evolution was on the rise.
The decision not to raise capital in the IPO was telling. Evolution wasn't desperate for cash—they were profitable and growing. The listing served multiple strategic purposes: it provided liquidity for early investors, established a public market valuation that could be used for future M&A, and signaled to the industry that Evolution was a serious, institutional-grade company.
The first big backer Richard Livingstone still held a hefty 33% stake, while founders Jens and Fredrik each controlled 17%, with Hadida holding 10%. In other words, Evolution's leadership still had massive skin in the game almost a decade after the company was born. This ownership structure was powerful, not just on paper, but in practice. With a rock-solid team and full commitment to live casino, Evolution stood out as the only company putting 100% of its focus here.
However, some shareholders decided to cash in a bit during the IPO. Altogether, about 40% of the company changed hands as existing investors sold portions of their stakes. Jens von Bahr and Fredrik Ă–sterberg each reduced their holdings from 17% to 10%, and Livingstone sold down his 33% share to 16.5%.
For investors, the founder retention was a crucial signal. In an industry with questionable ethical practices and regulatory uncertainty, having founders with substantial skin in the game provided assurance that management interests were aligned with shareholders. Evolution wasn't a vehicle for quick financial engineering—it was a company built for long-term value creation.
VIII. Dream Catcher and the Game Show Category (2017)
If the 2015 IPO established Evolution as a serious company, 2017 marked the moment when Evolution proved it wasn't just executing well—it was capable of inventing entirely new product categories.
In 2017, Evolution launched Dream Catcher, the first live game show title ever released, signifying an exciting step forward in the iGaming industry.
The company's Dream Catcher game, a spinning money wheel with a live presenter, was named Digital Product of the Year in the Global Gaming Awards at G2E Las Vegas 2017.
To understand why Dream Catcher mattered, consider the psychology of casino gaming. Traditional table games—blackjack, roulette, baccarat—have steep learning curves. Many casual gamblers find them intimidating. The rules are complex, the etiquette unclear, and the fear of embarrassment real. These psychological barriers limited the addressable market for live casino.
Dream Catcher changed everything. It was essentially a giant money wheel with a charismatic host—part casino game, part TV game show. No complex rules to master. No intimidating table dynamics. Just bet on a number and watch the wheel spin. Anyone who'd ever watched The Price Is Right could understand it instantly.
In the same year, Martin Carlesund was appointed as the CEO of the company, succeeding Jens von Bahr.
The CEO transition was significant. Carlesund joined Evolution Gaming in 2015 as CEO of Evolution Malta, the group's operational entity. In 2016, he succeeded Jens von Bahr as Group CEO. Under his leadership, Evolution expanded globally, launching studios in several countries and acquiring key industry players to strengthen its portfolio.
Martin has been CEO of Highlight Media Group, Eniro Sverige, Eniro Finland and 3L System AB. He holds an MSc in finance together with courses in computer science, law and mathematics at University of Borås, Gothenburg School of Economics and Linköping University.
Then came the masterstroke: Lightning Roulette in 2018.
One of the most successful games of Evolution is Lightning Roulette which was launched in 2018. The live dealer version of Evolution's Lightning Roulette won three Game of the Year awards in 2018.
Lightning Roulette took traditional roulette and injected slot-like excitement through random multipliers. Before each spin, lightning would strike random numbers on the wheel, boosting potential payouts up to 500x. The visual spectacle—complete with dramatic lightning effects and an electrifying studio design—transformed a 300-year-old game into something that felt genuinely new.
IX. The First M&A Move: Ezugi (2018)
Even if acquisitions weren't part of the business model initially, with Evolution taking around 12 years to make its first major M&A.
Evolution Gaming, leading provider of Live Casino solutions, today announced that it has entered into an agreement to acquire the business of Ezugi, a live dealer gaming provider, in an all cash deal with an initial consideration of $12 million and possible additional consideration of a maximum of $6 million. The acquisition will increase Evolution's geographic footprint and accelerate growth in key markets.
Currently operating from multiple studios worldwide, Ezugi delivers B2B mobile and web live dealer solutions to online operators, land-based casinos and betting shops. Its markets include the US states of New Jersey and Oklahoma, Europe, Latin America and South Africa.
At November 2018, Evolution and Ezugi are currently the only Live Casino providers operating in the US market.
The strategic logic was elegant. By acquiring the only other regulated live casino provider in the US, Evolution eliminated a potential competitor and consolidated its position in what would become the most important growth market for online gambling.
Most of our growth has been organic, but in 2018, we bought Ezugi, adding a second Live Casino offer to the Group.
The price—$12-18 million for a foothold in the US market—looks almost comically cheap in retrospect. Evolution was paying for optionality in a market that would explode in value as states legalized online gambling following the Supreme Court's 2018 PASPA decision.
X. COVID-19 and the NetEnt Transformation (2020)
2020 was a big year for many gaming companies in general. Due to the COVID-19 pandemic and cancellation of sporting activities, sports betting experienced a huge reduction. Physical casinos and gambling centers were also closed, leaving gamblers with no choice but to search for alternatives. As a result, there was a high demand for online gaming products like never before. Evolution Gaming was one of those companies that benefited from the increase in the number of game players.
Against this backdrop, Evolution executed its most transformative deal.
In June 2020, NetEnt accepted a SEK 19.6bn ($2.1bn) offer from Evolution to acquire 90% of NetEnt's shares. The deal took a few months to navigate the various legal thresholds, but it was eventually closed around December of the same year.
The combined product portfolio will include some of the world's most popular Live Casino and online slots games and generate revenue upsides through cross-selling and improved distribution via both companies' customer bases, with closer customer partnerships and additional geographical spread of the companies' products as result.
NetEnt was a legendary name in online slots, responsible for iconic games like Starburst and Gonzo's Quest. There was some speculation about whether this actually drew Evolution's attention in the first place – as NetEnt's share price was at a five-year low at the time, but this soared 30% after the deal. As for Evolution, Red Tiger had a healthy slot portfolio, which would've made for an excellent addition to the business focusing on this side of the industry at the time.
The integration was ruthless and efficient.
Once Evolution completed the acquisition, it closed down the NetEnt Live business, resulting in hundreds of job losses from the Qormi live studio. Evolution confirmed that a 'total reorganisation and integration' of NetEnt would see it 'streamline the business' of developing slot games instead.
Evolution was crystal clear about its priorities: NetEnt's slot portfolio was valuable; NetEnt's live casino operation was redundant and inferior. There was no sentimentality about preserving the acquired company's legacy business. This was Evolution as acquirer-integrator, not as passive financial investor.
XI. The Acquisition Spree and Crazy Time Era (2020-2022)
Just weeks after announcing the NetEnt deal, Evolution launched what many consider its crowning creative achievement.
Launched in July 2020, Crazy Time by Evolution Gaming has quickly become a favorite among live game enthusiasts.
This multi-layered, bonus- and multiplier-packed game was first showcased as Evolution's headliner at ICE 2020 and is the newest addition to the company's fast-growing game shows category.
Todd Haushalter, Evolution's Chief Product Officer, said: "I am so proud of the hundreds of people who worked on Crazy Time. This is some of the best work Evolution has ever done and I honestly believe it is the most fun casino game ever made. It highlights a paradigm shift for Evolution: this game will appeal to audiences far and wide, from slot players to sports bettors and everyone in between."
Crazy Time was Dream Catcher on steroids. It featured four distinct bonus games—Cash Hunt, Pachinko, Coin Flip, and the eponymous Crazy Time—each offering different gameplay experiences with multipliers reaching up to 20,000x. The production values were extraordinary: a massive money wheel, augmented reality elements, and charismatic hosts creating what felt like a live television broadcast.
The acquisitions continued at a remarkable pace.
On 12 April 2021, Evolution entered an agreement to acquire Big Time Gaming (BTG) for €450m ($534.5m). BTG was known for its online casino games, including Bonanza and Extra Chilli, but more notably its Megaways game mechanic. Since its initial release in 2016, it had licensed the feature out to several studios, including Pragmatic Play, Reel Kingdom and Playtech.
October 9 2021 saw Evolution enter into an agreement with DigiWheel to acquire the developer of the world's first patented HD spinning gaming wheels for €1m. The fully rotating wheels would be integrated into Evolution's existing portfolio, which already included several wheel-based games such as Crazy Time and Dream Catcher.
Live dealer giant Evolution has completed its acquisition of slot developer Nolimit City in a deal worth up to €340m.
Evolution CEO Martin Carlesund said the acquisition of Nolimit City would add a "missing type of game" to the supplier's content network as it aims to become the one-stop shop of online casino products. Nolimit City has carved out a reputation for producing controversial slots. This has now become its USP, with games such as Remember Gulag, Punk Toilet and Das xBoot among its top performing titles.
By 2022, Evolution had assembled an extraordinary content empire: Evolution Live (the crown jewel live casino brand), NetEnt, Red Tiger, Ezugi, Big Time Gaming, Nolimit City, and DigiWheel. The company had transformed from a pure-play live casino specialist into a comprehensive online casino content provider.
XII. US Market Expansion
The United States represented Evolution's largest growth opportunity—and its most complex regulatory challenge.
Another way Evolution Gaming has been able to grow so large is their quick response to new markets. As soon as new opportunities open in a country, the company finds a way to penetrate the market and offer its services there. An example is the US gambling market which has recently opened up for online casinos. Evolution Gaming realized this opportunity quickly and went into partnership with WSI (Wynn Sports Interactive). This partnership allowed Evolution to start offering its games to players in New Jersey initially.
In 2018, Evolution acquired Ezugi and expanded with new facilities in Canada, Georgia, and New Jersey, U.S.
Evolution opened new studios in Pennsylvania, USA, and Lithuania. In 2021, Evolution acquired Digiwheel and Big Time Gaming and later opened its third US studio in Michigan.
In 2022, Evolution launched XXXtreme Lightning Roulette, went live in West Virginia, and opened its fourth US studio in Connecticut.
The US expansion required a fundamentally different approach than Evolution's European playbook. Each state operates as its own regulatory jurisdiction, requiring separate licenses, compliance frameworks, and often physical infrastructure within state borders. Evolution committed to building dedicated studios across multiple states—a capital-intensive strategy that created substantial barriers for competitors.
Commentary has suggested that Evolution has anywhere from a 60-80% market share of live casino in Europe, as well as virtual domination in the US with 90%+ share.
Evolution's revenue in the U.S. iGaming segment grew by 34% in 2024, outpacing the industry's 12% average growth. Analysts project this trend to continue, with the U.S. live casino market expected to reach $14.2 billion by 2029.
XIII. The Product Innovation Machine
Evolution's sustained dominance rests on relentless product innovation. The company doesn't just operate live casinos—it continuously invents new game categories that expand the addressable market.
One thing you would notice about Evolution gaming is how they constantly develop games for specific markets. Their games cater to the needs of the audience in local markets, thus, helping them gain grounds and attract more customers. For example, in 2018, they launched Live Dragon Tiger, a popular game in India. The game which is based on the Asian art culture of the Dragon and Tiger also incorporates some elements of Baccarat. Making this game available for the Indian market has helped them gain a significant number of fans.
Innovation continued with the launch of Live Casino Hold'em in 2010, one of its first poker-based live dealer games, and Live Baccarat in 2012, marking its first Asia-focused game.
The Hasbro partnership announced in 2025 exemplifies Evolution's approach to branded content.
Evolution today announced it has signed a multi-year agreement with Hasbro, a leading games, IP and toy company, to be their exclusive licensing partner for online live casino and slot games for MONOPOLY and other Hasbro Games titles. The worldwide deal, including the USA, covers online content from all Evolution brands, including Evolution, Ezugi, NetEnt, Red Tiger, Big Time Gaming (BTG), Nolimit City and Livespins.
"At Hasbro, we're all about play—whether it's classic board games or casino experiences. After a thorough RFP process, we've chosen Evolution as our exclusive partner for online live casino and online slots for Hasbro Games titles."
Evolution's Chief Product Officer Todd Haushalter commented: "The team and I are incredibly excited to bring the Hasbro Games brands to all our various brands. I think MONOPOLY is the world's best casino game brand, and we can do so many great things with it, and, of course, with many other Hasbro Games brands. It is hard to believe, but these are still the early days of online gaming, and with Hasbro we will forge a new chapter in our industry."
During Q2, Evolution released four new live casino titles and 20 online slots, part of a broader roadmap of more than 110 games scheduled for release in 2025.
XIV. Recent Challenges and Regulatory Risks
No company achieves Evolution's dominance without accumulating complexities. The past two years have brought significant challenges.
The Georgia Strike
The strike by 4,000 Evolution Gaming workers in Georgia is one of the largest and longest the Eastern European country has ever seen. Four thousand workers at the online gaming company Evolution in Tbilisi, Georgia, walked off the job in July protesting low wages, dangerous working conditions, and harassment. Four months in, their strike is one of the largest and longest that this Eastern European country has ever seen.
Workers want Evolution to return to bargaining and agree to boost their salaries, which are currently $200 to $250 per month for a 40-hour-plus week.
After announcing last week that it would consider "larger-scale layoffs" as a response to ongoing strike action at its live casino studio in Tbilisi, Evolution has confirmed that it will initiate a redundancy process to reduce its Georgian workforce by 1,000 staff members.
According to Carlesund, the strike engaged a relatively small portion of the workforce, but violent protests and illegal blockades caused enough turmoil to force Evolution to reduce its workforce in Georgia and shift operations to other studios.
UK Regulatory Review
Evolution has been informed by the UK Gambling Commission ('Commission') that it has commenced a review of Evolution Malta Holding Limited's operating licence under Section 116 of the Gambling Act 2005. The review was initiated after the Commission identified Evolution games being accessible from the UK through operators not holding a Commission license.
The review can have a range of outcomes, which include no action being required, conditions being imposed on the licence, financial sanction, suspension and revocation of the licence to operate. Evolution is cooperating fully with the Commission and has taken requested immediate actions to remedy the situation. Games on the identified websites not holding a Commission license have been made unavailable from the UK.
The UK counts for roughly 3% of Evolution's reported revenue, the supplier said.
Asia Cyberattacks
CEO Martin Carlesund noted: "However, it has also been a year in which we have handled several challenges such as the sabotage activities towards our Georgian studio, cyber-attacks in the Asia region and also an increased tax rate."
2024 has been a difficult year in Asia and the region remains affected by cyber-attacks in the fourth quarter. Revenue in the quarter is flat in comparison to the previous quarter.
XV. The Competitive Landscape
Evolution's dominance is remarkable, but competition is intensifying.
As of mid-2025, the company holds around 45% of the live casino market. That's a notable lead over competitors like Playtech at 30% and Pragmatic Play, which has climbed to about 25%.
Evolution holds roughly 60% of the global live casino market share, dwarfing competitors like Playtech, which accounts for about 15%, a clear indicator that Evolution remains the dominant force in live dealer games worldwide.
The lower margins stem from a wider product mix, including lower-margin products, less targeted markets, and, most importantly, less scale. They have an estimated 15% market share in live casinos, compared to EVO's 60%. This is partly because they operate almost exclusively (~90%) in regulated markets.
Porter's Five Forces Analysis
Threat of New Entrants: LOW The barriers to entry are formidable. Building live casino infrastructure requires massive capital investment (studios, technology, dealer training). Regulatory licensing takes years and substantial compliance resources. And Evolution's first-mover advantage means operators already have established relationships.
Bargaining Power of Suppliers: LOW Evolution's primary inputs are labor (dealers) and technology infrastructure. Neither supplier category has meaningful bargaining leverage. The Georgia strike demonstrated that while labor disputes can create operational disruptions, Evolution has sufficient geographic diversification to mitigate risks.
Bargaining Power of Buyers: MODERATE Large operators like bet365 or DraftKings have significant scale, but they ultimately need Evolution's content more than Evolution needs any individual customer. Evolution disclosed that in 2024, its largest customer — out of a total of 800 — accounted for approximately 13% of net revenues, while its top five customers contributed about 46%.
Threat of Substitutes: MODERATE RNG casino games, sports betting, and other entertainment options compete for consumer attention and gambling spend. However, live casino has demonstrated consistent growth as a category, suggesting limited substitution pressure.
Competitive Rivalry: INTENSIFYING Pragmatic Play has emerged as a credible challenger, gaining market share through aggressive pricing and product development. Competitors like Playtech have made impressive gains but lack the consistency and pace of innovation that Evolution delivers year after year. Pragmatic Play is making smart moves in the live space, particularly with budget-friendly game setups and regional customization, but it still lags behind in terms of catalogue depth and operator integration.
Hamilton Helmer's 7 Powers Framework
Scale Economies: Achieved. Evolution's fixed costs (technology development, studio infrastructure) are spread across more customers and more betting volume than any competitor. This allows superior margins at similar or lower prices.
Network Effects: Limited direct network effects, but strong indirect effects through operator relationships. More operators → more player exposure → more brand value → easier to sign new operators.
Counter-Positioning: This was Evolution's original moat. By focusing exclusively on live casino when others were building RNG slot portfolios, Evolution created expertise and infrastructure that established players couldn't easily replicate.
Switching Costs: Moderate. Operators can technically switch suppliers, but integration complexity, regulatory approvals, and player familiarity create meaningful friction.
Branding: Strong with industry insiders but limited consumer-facing brand value (most players don't know who powers their casino's live games).
Cornered Resource: Evolution's library of innovative games (Lightning Roulette, Crazy Time) and exclusive IP licenses (Hasbro) create proprietary content advantages.
Process Power: The accumulated operational expertise in running live casino operations at scale is genuinely difficult to replicate. Dealer training, video production quality, game flow management—this institutional knowledge compounds over time.
XVI. Financial Analysis and Key Metrics
2024 Financial Performance
Evolution wrapped up 2024 with a solid financial performance, reporting a 14.7% increase in net revenue to €2.06bn.
This meant an operating profit of €1.42 billion, up 24.2% year-on-year.
For the full year, revenues grew by 23.1% to EUR 2,214.1 million, with a profit of EUR 1,244.0 million.
Alongside its financial results, Evolution has proposed a dividend of €2.80 per share for 2024, an increase from €2.65 in the previous year. Additionally, the company has announced plans to repurchase up to €500m worth of shares in 2025 as part of its capital allocation strategy.
2025 Outlook
Expansion will continue in 2025 - with a slightly more expensive resource mix, taking into account the situation in Asia and a strengthened focus on regulated markets we expect to see an effect on margin. We estimate the EBITDA margin for full-year 2025 to be in the range of 66-68 percent.
For H1 2025, net revenues rose 3.5% to €1.05bn, while EBITDA edged down to €687.2m. Profit declined 6.6% year-on-year to €503.0m.
CEO Martin Carlesund stated: "I am not satisfied with the financial development during the first half of 2025, but I am very satisfied with how we are addressing our challenges."
Revenue Mix
Live gaming was Evolution's primary revenue driver by game type during 2024, boasting a revenue figure of €1.8bn for the year – eclipsing the €287.3m generated by RNG.
The revenue composition tells an important story. Live casino remains Evolution's core competency and primary profit driver. The RNG segment (slots), while strategically valuable for offering operators a one-stop-shop solution, has yet to achieve the same growth trajectory as the live business.
Key Performance Indicators to Track
For investors monitoring Evolution, three metrics matter most:
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Live Casino Revenue Growth Rate: This is the core business. Double-digit growth indicates continued category expansion and market share maintenance. Single-digit growth would signal maturation concerns.
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EBITDA Margin: Evolution's 66-68% margins are extraordinary for any software business. Sustained pressure below 65% would indicate either competitive erosion or operational challenges.
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US Revenue as Percentage of Total: As the largest growth opportunity, US contribution should trend upward. Currently a relatively small portion of total revenue, US momentum is the leading indicator of long-term growth potential.
XVII. Acquisition Pipeline and Strategic Outlook
Evolution continues to pursue strategic M&A.
Evolution AB (publ)'s wholly owned subsidiary, Evolution Malta Holding Limited, ("Evolution") has entered into an agreement to acquire Galaxy Gaming, Inc. ("Galaxy Gaming") (OTC:GLXZ) for a total equity value of approximately $85 million (the "Transaction"), payable in cash.
The transaction is expected to close mid-2025 and is subject to customary closing conditions, including the receipt of regulatory approvals. Upon completion of the transaction, Galaxy Gaming will become a privately held company and shares of Galaxy Gaming common stock will no longer be listed on any public market.
The deal was announced in July 2024 and was expected to complete in mid-2025. The transaction will see Evolution Malta acquire Galaxy Gaming and combine it with Galaga Merger Sub, a Nevada corporation and a wholly owned subsidiary of Evolution.
The Galaxy Gaming acquisition extends Evolution's reach into land-based casino table games—a segment that complements its online focus and provides additional touchpoints with casino operators.
XVIII. Bull Case
Thesis: Evolution remains the best-positioned company to benefit from structural growth in online gambling globally.
The bull case rests on several pillars:
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Category Growth: Live casino is the fastest-growing segment of online gambling, expanding at 20%+ annually. Evolution is the dominant player in a growing market.
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US Opportunity: With 90%+ US market share in live casino and only a handful of states currently allowing online gambling, Evolution has immense runway as additional states legalize.
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Regulatory Moat: As more markets regulate online gambling, Evolution's established compliance infrastructure, regulatory relationships, and first-mover positioning create sustainable competitive advantages.
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Product Innovation: The game show category that Evolution invented continues to expand the addressable market by attracting casual gamblers who wouldn't play traditional table games.
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Margin Durability: 66-68% EBITDA margins reflect genuine scale economies and operational excellence that competitors haven't matched.
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Capital Return: Management has demonstrated disciplined capital allocation—returning excess cash through dividends and buybacks while funding growth investments internally.
XIX. Bear Case
Thesis: Evolution's best days may be behind it as competition intensifies, regulatory risks mount, and growth rates normalize.
The bear case focuses on several vulnerabilities:
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Market Share Erosion: Pragmatic Play has grown from negligible share to ~25% of the live casino market. If this trajectory continues, Evolution's pricing power and margins will come under pressure.
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Regulatory Risk: The UK Gambling Commission review highlights a fundamental tension in Evolution's business model. The possible outcomes range from no further action being taken, to the imposition of licence conditions or financial penalties, or even the suspension or revocation of Evolution's operating licence. A major regulatory action in any key market could damage reputation and create ripple effects across jurisdictions.
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Labor Relations: The Georgia strike exposed operational and reputational vulnerabilities. Evolution's cost advantage has partially depended on accessing lower-cost labor markets. Organized labor movements and increased regulatory scrutiny of working conditions could compress margins.
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Unregulated Market Exposure: A significant portion of Evolution's revenue comes from grey/unregulated markets, particularly in Asia. Regulatory crackdowns or competitive disruption in these markets could materially impact growth.
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Valuation: Evolution trades at premium multiples that assume continued exceptional execution. Any stumble—regulatory, competitive, or operational—could trigger meaningful multiple compression.
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Customer Concentration: EVO has a very concentrated customer base. 46% of its earnings come from the five biggest customers and 13% from the biggest one alone. On the one hand, this is a risk. If one of them, for whatever reason, goes out of business or leaves EVO, it will have a severe impact.
XX. Conclusion: The Casino Inside Your Phone
What Jens von Bahr and Fredrik Ă–sterberg created in 2006 has become something far larger than a live casino software company. Evolution pioneered an entire product category, built the dominant platform, and then expanded its moat through relentless innovation and strategic acquisitions.
Evolution's market-leading position is mainly based on the competitive advantage that derives from the company's operational excellence in offering Live Casino solutions since 2006. Live Casino is a highly complex product, and, to function, it requires effective collaboration between people and systems. Over its years in business, Evolution has been able to amass a collective body of experience that is unique among suppliers.
The company faces genuine challenges: intensifying competition from well-funded rivals, regulatory scrutiny that comes with market dominance, and labor relations complications in key operating markets. Growth rates will inevitably moderate as the business scales.
Yet Evolution remains the preeminent supplier in its category—a position reinforced by scale economies, first-mover advantages in regulated markets, and a product innovation machine that continues to expand the addressable market. The exclusive Hasbro partnership, pending Galaxy Gaming acquisition, and continued US expansion all point toward a company still finding new ways to grow.
For the founders who started with BBC news playing in the background to prove their games weren't fake, Evolution's transformation into a €15+ billion enterprise represents one of the great entrepreneurial success stories in European technology. They didn't just build a company—they built the casino inside your phone.
Material Legal/Regulatory Overhangs: - UK Gambling Commission license review ongoing (initiated December 2024) - Georgia labor dispute with potential for further disruptions - Galaxy Gaming acquisition awaiting regulatory approvals (extended timeline)
Accounting Considerations: - Significant earnout liabilities related to acquisitions (Big Time Gaming, Nolimit City, others) create ongoing non-cash adjustments - RNG segment performance remains subject to debate regarding turnaround trajectory
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