Evolution Gaming: Part 1 Of Deep Dive Into A Live Casino Gaming Powerhouse
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Evolution AB (publ) is a leading B2B live casino game provider in Europe. They have been gaining traction in Asia and the U.S. recently. Their focus on operational excellence and product innovation has helped to drive better casino experiences for players. The company has an award-winning portfolio of live casinos games.
Evolution Gaming works with casino operators to provide their self-developed live casino games to the end users. It also provides value-added services to help land-based operators digitize their operations. EVO derives its revenue through commission obtained from a percentage of the operators' gross gaming revenue and fixed monthly fees.
The casino industry consists of 2 main segments: land-based casinos and online casinos. Online casinos are platforms providing online platform services. The online casino market consists in poker, slot games, sportsbooks and live casinos, where EVO is located.
Report done by European Gaming & Betting Association and H2 Gambling Capital shows that online casinos are expected to take market share away from land-based casinos. Market share is going to come from Asia, the U.S., and Latin America. According to management, Asia's market is 10 times bigger than Europe's. Mature markets are important because consumers are more receptive to new game releases. New games play an important revenue driver for EVO. The rise of technology, including the birth of data cloud, AI/ML, fast and reliable broadband Internet speed, increasing Internet consumption, and smartphone penetration are driving the growth of the overall market.
What drives a player's casino experience is trust, seamless game, product innovation and brand loyalty.
Players have a few requirements when it comes to live casino. They include: Are the operators licensed and have fast and easy payout? Where can they turn to if they are treated unfairly? Mistake-free and smooth live games. Professional and friendly dealers. Fraud- free.
Are these licensed casino operators providing good service to their customers?
Evolution Gaming is a live casino gaming powerhouse. It has a strict know-your-customer policy and runs its own in-house risk and surveillance tools. EVO prides itself on attaining all the licenses and certifications required for regulatory compliance and security. The Malta Gaming Authority (MGA) is an international gambling permit. The company runs 2 mission-control rooms in Latvia and Malta that perform 24-hour monitoring to identify bad behaviors. They also use AI/ML software such as shuffle tracking and wheel clocking. Their self-developed shuffling procedures are used by land-based operators.
CPO Todd Haushalter talks about the challenges of running live casino games. EVO has to build out production studios, a training center for employees to learn how to operate a live game show, and a tech center where they developed and run their in-house risk and surveillance tools. They have to stream to thousands of players across different devices and browsers globally. NetEnt, one of EVo's acquisitions, has struggled to gain traction against EVE despite entering the market in 2013. For incumbents, going digital is extremely crucial because of the need to remain relevant by going online.
Todd Haushalter, CPO of Evolution Gaming, talks about live streaming gaming during iGaming NEXT New York City 2022 Keynote Speech.
EVO's product innovation is a key competitive advantage. CEO Martin Carlesund gives the product team the freedom to innovate. EVO has been awarded the "Live Casino Supplier Of The Year" at the EGR B2B Awards for 12 consecutive years. Its live casino games are popular among its audience. "Lightning Roulette" won the Game of the Year at American Gambling Awards 2022.
"The strong growth trend over recent years for live casino has encouraged more systems providers to develop live casinos solutions. The barriers to entry are relatively low, while the barriers of success are considerably higher." - EVO FY21 Annual Report.
Operational Excellence Drives Better Customer Experience and Repeated Visits for Casino Operators. EVO's extensive experience in operating seamless live game shows, strong emphasis on game integrity, and product innovation contribute to an overall better customer experience for players.
Evolution Gaming is a live casino gaming powerhouse.
Evolution Gaming is a live casino gaming powerhouse. CEO Martin Carlesund has not seen any signs of a slowdown in the market.
The casino industry is recession-resilient. NetEnt was unaffected during the 2008 financial crisis.
There is a long-term recession that could affect Internet-based gaming.
Internet users are more likely to use gambling apps and sites. This is because of the ease of internet access and the fact that gambling is treated as a leisure activity.
Internet users can access gambling apps and sites when land-based casinos are temporarily shut down.
Regulations are Crucial for the Industry and the Increasing Number of Regulated Markets is Driving EVO's Growth. EVo aimed to be the first live casino provider in each country when permitted.
Evolution Gaming is a live casino gaming company. It follows a regulated business model. Its games are certified and tested. The company has a growing addressable market. It is following licensed operators into newly regulated markets. This helps it attract high-quality players. EVO's business models allows it to follow licensed companies into new markets and grow its addressability.
Evolution Gaming is a live casino gaming powerhouse. It's regulated and licensed.
Dutch market opened in October 2021. Canada- Ontario market for commercial operators to open in April 2022. Latin America was the first to market in Argentina in 4Q21. Since 2006, an increasing number of markets in Europe have been regulated. The trend might be playing out in regions like the U.S.
Dutch market opened in October 2021. Canada- Ontario market for commercial operators to open in April 2022. Latin America was the first to market in Argentina in 4Q21.
In part 2 of the deep dive, I will dive more into the acquisitions made, financials, management team, valuation and risks. Let me know in the comment section below. I implore investors to look deeper to understand the changes that are happening in casino industry.
