Can you give us some detail regarding the origins of your presence in the US and progress to date?
Our entry into the US market was a carefully considered long-term project. Having closely monitored US market developments, we were the first live casino provider to gain preliminary waiver approval for New Jersey and launched our first US studio in Atlantic City in 2018.
We constantly anticipate and prepare for new and re-regulating markets so that our licensees can win vital early market share, and in 2019 we gained a conditional interactive gaming manufacturer license from the Pennsylvania Gaming Control Board (PGCB). This made Evolution the first live casino provider to be licensed in Pennsylvania and we launched the studio in October last year.
Additionally, in the coming weeks, Evolution will open a state-of-the-art live casino broadcast studio in Michigan. It will be our biggest studio in the US to date. Once completed, the new studio will host both live table games and titles from our fast-growing live game shows category.
At the tail end of 2020, we acquired one of the world’s biggest online slots companies, NetEnt, and we are really excited to bring the worlds of slots and live casino together, especially to players in the US. This acquisition mutually benefits both companies in terms of market penetration in the US, as NetEnt has a strong foothold in this market.
Can you describe Evolution's current strategic approach to the US and which particular markets or states show the most promise and why?
The US is a key pillar in our overall strategy. It's our intention to have a major, day-one presence in all newly regulated US states going forward. So deciding to build our next studio in Michigan is the logical next step, and we can’t wait for this studio to be live. We always keep an eye on new legislation being introduced in each state. We try not to get too ahead of ourselves, though, until the state governor actually signs the bill into law. We are keeping an eye on states such as Connecticut, Illinois and Indiana while simultaneously looking at other US states considering online sports betting, such as New York. Going forward, we plan to be in every state that will have us. The growth has been fantastic, and we are layering in products slowly as we learn what works.
We’re excited to announce more deals and locations in the very near future as Evolution’s reputation in the US for live casino services has seen a host of agreements signed for both Pennsylvania, New Jersey and Michigan in the run up and after the studios launch. We are now working with leading land-based operators in all three states to extend their online offering including landmark agreements with Caesars Entertainment, Inc., Wynn Sports Interactive, William Hill US, FanDuel and BetMGM, as well as many additional licensed operators with the goal to launch before the end of 2021.
In our latest interim report for January to March, our Group CEO Martin Carlesund discussed that all regions delivered good growth in the first quarter, with especially high growth rates in North America.
What is unique about the US in terms of consumer behaviours and trends?
Consumer behavior is changing in the US. As more states open their doors to igaming, players are realizing that they can continue to interact with their favorite casino brands from the convenience of their smartphone or computer. We are seeing many players who are amazed that they can play against a real person, in real time via a live video feed over the Internet. Regulated online casino gaming is brand new to many Americans and introducing live casino gaming takes that experience to another level.
In states such as New Jersey and Pennsylvania where players have the option to place bets on sports at a land-based casino or online, we have seen that the majority of sports betting comes from online, specifically through the use of smartphones. Additionally, these two states also have online casinos, and the majority of the online revenue comes from online casino games. Not to say that one is better than the other, but online sports and online casino wagering certainly complement each other. I think the growth in the US is going to be phenomenal for casino games, because sports betting is popping up everywhere and the demand to bring casino games in next will be strong.
Are you planning to build your M&A strategy in the US in light of your Big Time Gaming and NetEnt acquisitions?
The acquisition of NetEnt significantly increased our joint market penetration and geographical footprint, making the Evolution Group the leading supplier in North America, something we are keen to remain. It also strengthened Evolution’s position in the US market and added slots as a second vertical to our offering, as well as resources in product development. NetEnt has grown its footprint significantly in the burgeoning US igaming market by entering Michigan on the day the Michigan Gaming Control Board (MGCB) launched online gaming and sports betting in the state. We’re delighted to report that multiple NetEnt licensees all began their operations in the Great Lakes State since day one. Similarly, by entering into an ongoing agreement to acquire Big Time Gaming, a thought leader in slots, we would also jointly benefit. With their groundbreaking Megaways game mechanic being incorporated into 200 games globally, this would greatly strengthen our strategic positioning.
Our current strategy is also focused on our roadmap of high-profile US game launches for 2021. Among those titles are our live craps table and our RNG-based first-person craps, both of which are scheduled for launch in New Jersey, Pennsylvania and Michigan during the summer. Some of our first person games are already live in Michigan, with more to come.
