Evolution CEO criticizes Brazil’s gambling ban during Q3 earnings call

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2026/07/20: Evolution shares down slightly after revenue reported to have taken 1.2% dip 2026/08/25: Total Philippines gambling ad ban seen handing market back to illegal operators, data from five countries show 2026/09/27: Brazil bans all sports betting and online casino gaming 2025/02/03: Evolution net revenue increases by 12.5% in Q4

The Backstory

Brazil’s abrupt reversal upended a new market

Brazil’s decision to shut down fixed-odds sports betting and online casino games landed less than two years after the country’s regulated market opened, disrupting one of the global industry’s most closely watched growth stories. The market became fully operational Jan. 1, 2025, under the Secretariat of Prizes and Betting within the Ministry of Finance, giving international operators and suppliers a federal framework after years of legal ambiguity and offshore activity.

That framework was reversed when President Luiz Inácio Lula da Silva signed Provisional Measure 1,394 on Sept. 25, banning the operation, offering, intermediation and advertising of fixed-odds betting and online games. The measure took force on publication, though Congress must approve it for it to remain in effect. The shutdown plan was immediate: operators were barred from accepting new deposits and bets from Sept. 25, platforms were given until Oct. 5 to allow withdrawals and betting sites and apps had to become inaccessible from Oct. 6.

The shift marked a sharp break from the policy Brazil had pursued since legalization. Companies had paid authorization fees, built compliance systems, contracted suppliers and opened local operations on the expectation that the federal model would endure. The measure also said operators would not be entitled to recover authorization fees or receive compensation for market closure, raising the prospect of legal action from licensees and trade groups.

Evolution’s Brazil exposure sits inside a wider Americas strategy

For Evolution, Brazil was part of a broader Americas expansion that had been offsetting pressure elsewhere. In its second-quarter results, the company said Latin America had maintained strong momentum, with revenue in the region up 26.3% year over year. The company cited the relaunch of an Argentine studio and a localized version of Ice Fishing for Brazil as examples of product investment aimed at regional demand.

That performance came during a quarter in which group revenue softened. As reported in Evolution shares fell after a 1.2% revenue dip, net revenue declined to €517.8 million in the second quarter from €524.3 million a year earlier, while EBITDA slipped by the same percentage to €341 million. Profit still rose 1.2%, but the figures showed the company was leaning on growth pockets such as Latin America and North America to counter volatility in Asia and slower performance in mature markets.

The company’s fourth-quarter 2024 performance had set the tone for that push. Evolution reported a 12.5% increase in net revenue in the final quarter of 2024, with Chief Executive Officer Martin Carlesund pointing to momentum in North America, Latin America and Europe. Asia, by contrast, was flat as the company dealt with cyberattacks affecting video distribution. The strategic logic was clear: regulated markets in the Americas offered expansion, localization and studio investment at a time when parts of Asia were harder to forecast.

The ban followed political pressure over gambling harm

Lula’s provisional measure followed consultations with religious groups, social organizations and other civil society representatives over the social effects of betting. The industry was not invited to those talks, according to prior reporting. The resulting policy response did not tighten advertising, affordability checks or enforcement around licensed operators; it closed the authorized market and prohibited betting advertising and sponsorship.

The measure also targeted the payment system. Financial institutions, payment providers and other participants in Brazil’s financial system were barred from processing fixed-odds betting transactions except those needed to wind down operations and return customer funds. Existing applications for authorization were terminated and new authorizations were prohibited from the date of publication.

The speed of the change magnified its effect. Operators were given days to move from active commercial activity to withdrawal-only operations. Open bets whose outcomes were not determined before the end of the transition period had to be canceled and refunded. Customer balances not withdrawn were to be reported to financial institutions so funds could be returned. That compressed timetable left suppliers, affiliates, payment companies and sports sponsorship partners to unwind contracts that had been built around a regulated federal market.

Illegal betting was already the central enforcement challenge

The government’s stated concern over gambling harm came against an enforcement backdrop that already showed heavy illegal-market activity. Between January 2025 and September 2026, Brazilian authorities blocked 66,482 domains linked to unauthorized betting platforms. The Brazilian Association of Games and Lotteries, known as ANJL, identified 6,409 illegal domains operating during just one week in September 2026.

Industry groups warned before the ban that shutting legal operators would not eliminate betting demand and could push players toward sites outside Brazilian oversight. After the measure was published, ANJL said more than 30 million bettors could be driven to the illegal market and said it would challenge the measure in court. Those warnings echoed the central tension in gambling policy: a legal framework can be criticized for expanding visibility and advertising, but it also gives regulators leverage over payments, identity checks, complaints, responsible gambling tools and taxation.

The provisional measure sought to answer that concern by creating an Interinstitutional Committee for the Oversight of Illegal Fixed-Odds Betting Operations and Advertising, coordinated by the Chief of Staff’s Office. Its purpose is to coordinate enforcement after the authorized market closes. The practical test will be whether enforcement can keep pace with offshore operators that change domains, use mirror sites and market through digital channels beyond the reach of domestic licensing rules.

Other markets show the channelization risk

The debate in Brazil resembles policy arguments unfolding in other jurisdictions. In the Philippines, a proposed total gambling advertising ban has drawn warnings that it could weaken licensed operators while leaving illegal offshore sites free to keep marketing. A detailed analysis of the measure argued that a blanket restriction would bind companies under domestic regulation but not offshore operators, potentially reversing gains made by moving players into the licensed system. The same report on the risks of a total Philippines gambling ad ban pointed to Italy, Belgium, France, the Netherlands and the United Kingdom as examples of how channelization can rise or fall depending on whether legal operators remain visible under strict rules.

Brazil’s policy goes further than an advertising ban because it eliminates licensed sports betting and online casino activity outright. That makes the channelization question more acute. If demand persists, bettors who were using authorized platforms may migrate to operators that do not verify age and identity, apply domestic responsible gambling controls or contribute tax revenue. For suppliers such as Evolution, the issue is not only lost revenue in one country but whether a major market can move from regulation to prohibition after companies commit capital and personnel.

The Philippines example also highlights the fiscal trade-off. Licensed online gambling revenue can fund enforcement, consumer education and regulatory systems. When that revenue contracts or disappears, governments must still finance the fight against illegal sites. Brazil’s committee structure may improve coordination, but it will operate without the same regulated-market ecosystem that had given authorities data, licensed counterparties and payment chokepoints.

Investor scrutiny had already intensified

Evolution entered the Brazil disruption under close investor and regulatory scrutiny. In August, the company urged shareholders to reject a mandatory cash takeover bid backed by billionaire Kenneth Dart, saying the SEK695-a-share offer did not reflect fair market value and was below the company’s recent trading price. The bid followed Candle Lake crossing the 30% ownership threshold, triggering an offer obligation rather than a strategic push to acquire the whole company.

At the same time, Evolution had recently resolved an 18-month license review in Great Britain through a £4.75 million settlement tied mainly to its content being found on six unlicensed websites. Carlesund said the company acted immediately and that the review found no broader pattern of unlicensed access in the U.K., but the penalty underscored the compliance pressure facing major suppliers as regulators focus on where content appears and whether supply chains are controlled.

Brazil now adds a different kind of risk: political and legal uncertainty in a market that had been considered a growth engine. The company’s São Paulo studio can be reopened quickly if the market resumes, but staffing, customer relationships and revenue forecasting remain contingent on Congress and the courts. For Evolution and its peers, the stakes extend beyond one quarter’s numbers. Brazil will test whether newly regulated gambling markets in Latin America can provide stable conditions for long-term investment or whether policy can swing rapidly from licensing to prohibition.