- regulators can tighten rules and force regulated operators to temporarily stop, like in Germany
- can lead to very slow or uncertain local market openings while forcing out all unregulated revenues, like in USA
In unregulated markets:
- local authorities can successfully ban and plug holes for revenue streams
- other country regulators (like in USA or EU) can start caring about supplier's black or gray market activities
2. I don't see a huge single country concentration risk (though USA seems to affect EVO's stock valuation greatly), but the last annual report showed a 14% concentration to EVO's largest customer.
3. There are now many well executing competitors in Live Casino, even though EVO still seems to be the best. I personally see the overall market's future growth potential as a margin of safety against the risk of competition.
4. RNG decline shouldn't make a huge long-term difference as long as management doesn't compound their mistake by further big investments of their focus or shareholder capital.
Evolution can't function without its licenses renewing. Furthermore, regulations and how regulators enforce them are inherently political and, hence, not completely predictable affairs.
However, the company gives me the impression that it is on the bleeding edge of compliance with local regulations at all its license localities. This would also explain how it is usually online on the first day of any market's regulatory opening. So, it's difficult (but not impossible) to imagine how a regulator could revoke Evolution's license without effectively banning the entire sector.
Thanks for the review. Here are some questions:
1. What are the business risks in both regulated and unregulated markets, and why should investors be concerned about them?
2. Is there a concentration risk present?
3. What is your opinion on the competition, considering the market is becoming more competitive?
4. Do you think the decline in RNG is a cause for concern, and if so, why?
1. In regulated markets:
- regulators can tighten rules and force regulated operators to temporarily stop, like in Germany
- can lead to very slow or uncertain local market openings while forcing out all unregulated revenues, like in USA
In unregulated markets:
- local authorities can successfully ban and plug holes for revenue streams
- other country regulators (like in USA or EU) can start caring about supplier's black or gray market activities
2. I don't see a huge single country concentration risk (though USA seems to affect EVO's stock valuation greatly), but the last annual report showed a 14% concentration to EVO's largest customer.
3. There are now many well executing competitors in Live Casino, even though EVO still seems to be the best. I personally see the overall market's future growth potential as a margin of safety against the risk of competition.
4. RNG decline shouldn't make a huge long-term difference as long as management doesn't compound their mistake by further big investments of their focus or shareholder capital.
Just my thoughts.
Are there any risks you see in regards to the regulated markets, in terms of licensing/renewal problems occurring now or upcoming in the future?
Is there merely a possibility or an actual probability they have problems renewing in the future?
How dependent is Evolution on these licenses to keep other competitors from eating into their monopoly/oligopoly-like net margins?
Evolution can't function without its licenses renewing. Furthermore, regulations and how regulators enforce them are inherently political and, hence, not completely predictable affairs.
However, the company gives me the impression that it is on the bleeding edge of compliance with local regulations at all its license localities. This would also explain how it is usually online on the first day of any market's regulatory opening. So, it's difficult (but not impossible) to imagine how a regulator could revoke Evolution's license without effectively banning the entire sector.
Thank you for this well put resume Ali!
Hi Ali - wated to discuss about EVO - can you reach out on email (my firstname.lastname @gmail.com)
Thanks...
Hi Ali - wated to discuss about EVO - can you reach out on email (my firstname.lastname @gmail.com)
Thanks...