Evolution AB: Haywire

Episode V | Silence Breaks… | Still Bullshit | Dad Crying | I am too...

Losing in the Gambling Epidemic?

At last, the radio silence is over. But for anyone holding $EVVTY the Year-End 2025 report somehow left us with more questions than answers.

Evolution AB: The Silent Squeeze

We keep hearing the same script: cyberattacks in Asia, ring-fencing in Europe, “expanding into the Americas” and disappointment with development at large. Yet, Carlesund reaffirms he is “proud of 2025 but not happy with it”.

Impressive positioning honestly. I mean I could say the same about my Substack growth but at least I don’t have shareholders to account for…

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The State of Gambling — An Epidemic

But what actually infuriated me was the 20th anniversary statement.

They’re essentially “celebrating the extreme success of the industry” and declaring we’re “still early” because most gambling is still land-based concluding “immense opportunities ahead”.

We aren’t early… We’ve already hit peak degeneracy.

In this day and age you literally have people today spending their last pocket change on gambling. I’m not kidding, it’s an epidemic like never before.

People are entering debt to gamble on the news from their couch on Polymarket making calculated decisions based on vibes. Fraternities are on DraftKings every month trying to outsmart the sportsbook, I’ve even seen people on X predicting traffic.

And somehow Evolution is declining, but don’t worry. Still early… Well sure, live-casino isn’t exactly the same thing, but to say the trend is still emerging is just a lie at this point. It has never been more popular.

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2008 Hangover but Worse?

Just to put this into perspective, the 2008 crisis was triggered by over-leveraged products that outweighed the real economy.

Today it’s almost reverse.

Market is covered but the average person is drowning in debt while society keeps inventing new ways to cover it. Klarna wants you to BNPL your rent. Credit cards fund gambling losses.

The whole system is built on pushing debt to mask rot.

This is where we are at. And I’m not saying this as a morally righteous person, I have lost probably €300 on the horse track and more on Crazy Time.

Gambling has been forbidden in most cultures for being detrimental to society which is why we have regulatory guidelines in the first place. Regulations which Evolution tries to follow while getting scrutinized for not being 100% perfect…

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Regulations: The Double Standard

The diabolical hypocrisy is that the other unregulated platforms can literally control the whole process while Evolution has to play fair.

The other platforms can do anything from manipulating the odds, holding your money and it wouldn’t surprise me if a lot of the games/bets are fixed. Luckily I don’t think this can go on.

70% of users on Polymarket has realized losses with only 0.05% accounting for the majority of profits. No-one is thinking about maybe regulating this yet?

My critique of this whole development is literally what has been weighing down $EVVTY’s stock. What’s even more painful is that the regulated markets are the ones declining…

It’s clear to me, playing fair is whats killing Evolution.

So what will happen? I think this gambling excess guarantees regulation eventually → regulation will kill most of these platforms → Evolution inherits the industry.

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The Silver Lining

The market has priced in total uncertainty. Yet Evolution remains absurdly profitable: 66% adjusted EBITDA margin, almost zero debt and dominant market share in live casino.

That kind of optionality is insane at these multiples.

The reason for depressed multiples is multifaceted with many claiming that it’s because of the competitive landscape we’ve just discussed, stalled growth(Q4 revenue down 3.7%), and lastly potential AI disruption.

Which I personally think is laughable, idea is that Evolution’s MOAT is now suddenly hanging by a thread given artificial intelligence may someday be able to emulate their games rendering their position obsolete.

I won’t go off on a huge tangent about it, but to me it’s like saying DoorDash will make Nobu go out of business…

Live-Casino MOAT is human-interaction and I still think Evolution’s catalogue of games are unique and well-positioned. The Hasbro deal giving the rights to Monopoly could be the high-margin rocket fuel they desperately need.

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My Move?

Trends come and go.

This online betting degeneracy wave will eventually crash hard. When it does, I think Evolution will still be standing: profitable, debt-free, dominant.

This is a decade-long play. And I genuinely think they are built to last.

And the Q4 report sure doesn’t show a dying business to me.

The stock can and probably will get cheaper.

With that said I’m going to keep adding, but guys don’t try to catch the bottom just carefully add a bit here and there.

Market wants to kill my Substack? Carlesund tells me patience? Guess what?

STILL STANDING

🛰 Signal LOST: End of transmission — INVADER out… 🎩

Disclaimer: This post is for informational and entertainment purposes only. It reflects personal opinions and is not intended as financial advice. Always do your own research before making investment decisions.