Evolution’s interim report for the first quarter of 2024 shows that its live dealer online casino products are growing increasingly dominant in their contribution to the company’s overall revenue. Evolution earned over $501 million in gaming revenue from January to March, putting it on pace for its first $2 billion year. Although Evolution’s portfolio of studios includes big names like NetEnt, the revenue contribution from slots and other purely digital casino games was only $70 million. Evolution’s live dealer segment contributed 86% of total revenue, up from 83.8% one year ago.
One reason for the popularity of Evolution’s live dealer games is its commitment to the game show format. American casino players are just starting to get a taste of Evolution’s more exotic offerings, with Crazy Time having debuted in New Jersey earlier this year, while a Pennsylvania launch is coming this summer.
Slow Rollout of New Formats May Hinder US Growth
Europeans have a much broader selection of Evolution products to choose from and clearly appreciate it. Evolution’s CPO Todd Haushalter told a panel audience at iGaming NEXT in New York in March that of Evolution’s five top games by player volume globally, none are traditional casino games like blackjack.
Unfortunately, the US regulatory landscape requires Evolution to have a separate studio in each state for each game. West Virginia is the only state willing to allow out-of-state streaming. That has led to a slower rollout of Evolution’s newer formats and may be why North American market revenue isn’t growing as fast as the company’s global business. North American revenue was up just 8.4% year-over-year in Q1, compared to 18% for the remainder of the company.
The stalled progress on iGaming legislation in the US hasn’t helped either. Since 2022, only a single state has legalized online casinos—Rhode Island, to which Evolution doesn’t have access.
According to Claesson, live dealer games account for 30% to 40% of all online gambling revenue in Europe, but the US is “still far from that.”
Still, it looks as if Evolution plans to address that situation. During the same panel discussion, Claesson said that the company would be hiring a lot in North America and is planning on expanding to around 4,000 employees by the end of the year, up from 3,000 or so.
Scroll down for a look at Evolution’s shifting revenue streams.
No Change in the Gray Market Situation
Although US regulations may be inconvenient to Evolution’s growth in the short term, they provide some measure of long-term security. One thing that hasn’t changed in Evolution’s financials over the past two years is that 60% of its revenue comes from operator partners in unregulated markets. The trouble with that is that such markets are prone to sudden changes in policy. In the company’s own words:
The development of laws and regulations relating to the supply of gaming services that Evolution provides is a central risk factor for the Group’s future earnings.
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