1.Evolution is our top pick heading into February. We assess the company’s moat and long-term growth rate as highly misunderstood and often viewed upon with, in our view, undeserved skepticism.

2.We view the acquisition of NetEnt as a rare combination of revenue and margin expansion with tangible opportunities to leverage upon. It is our understanding that Evolution will further strengthen the offering and move more towards becoming a one-stop-shop for operators.
3.With the help of NetEnt’s offering, Evolution will be able to penetrate new markets faster. Furthermore, we assess that Evolution, who are known for their innovation, will infuse new life into NetEnt’s own product line.
4.We also see synergies from the acquisition on the cost side. Evolution’s management is renowned for running a tight ship with a focus on profitability, something we got a glimpse of as they announced a large restructuring on the day of the acquisition.
5. In addition, from our research, Playtech’s largest competitive advantage compared to Evolution is its ability to offer more services than just live casino.
6. Playtech has mostly used its live casino as an add on for their RNG/Slots games. With the acquisition of NetEnt, Evolution can also offer more than live casino.
7. We think, and all research points towards it, that starting a successful live casino requires huge know-how and large upfront investments. On top of that, it would take several years before reaching break-even.
8. To quantify our statement, we have good sources indicating that starting a live casino business requires about €30m in initial investment, and an additional €20m before reaching break-even.
9. It is to our understanding that Evolution keeps increasing the gap to competitors, due to both scalability and innovation power.
10. Thus, with online casino still having a relatively small penetration on the overall casino market, we see a huge growth opportunity for Evolution going forward.
11. We have seen the market underestimating Evolution’s long-term growth prospects since their IPO back in 2015 and can see that they are continuing to estimate a slowdown in growth.
12. Within the gambling space there are always regulatory risks. Historically, these regulatory ramifications have been affecting more operators rather than suppliers. As always, it is important to keep close tabs on the competition and the competitor’s product launches.
13. All the data suggest that revenue growth has accelerated during Q4’20 and January. In our opinion, Evolution's current valuation reflects a stagnation in revenue growth, and the market is not putting enough attention to the high-likelihood of a long-tail growth.
14. We see exceptional good R/R in the coming 6-12 months and estimate that Evolution will generate annual operating profits of >€1b within three or four years.

More from Finance

The Dutch regulator and DNB as financial supervisor are a tough cookie to deal with. In essence they hyperregulate EU-rules into goldplated Dutch rules which go beyond what is prescribed in Europe.

All NL-customers at British banks may thus be kicked out on brexit.

Thread

/1

If we start with the capital requirements directive, it says attracting deposits is forbidden. In article 9.

https://t.co/RYl7SXligC


Now the translation of that rule into Dutch law is slightly expanded to not only prohibit attracting deposits, but to also prohibit, having those deposits under custody ('ter beschikking hebben').

That's not in EU law, but it is in our Dutch law.

https://t.co/PsbWfNY3PA


So if you wonder how this would work out for UK banks and Payment institutions servicing Dutch customers. Have a read at the technical explanation of DNB, the financial supervisor and their summarising table.

https://t.co/LL0fAnYkRJ

Passive servicing of Dutch is not allowed!


Any bank or PSP in the UK that continues to serve Dutch customers (as in retail customers, professional players are excepted) can thus be subject to fines and policing under Dutch law.

Meaning we not only have Accidental American issues in payments, but also Accidental Dutchies

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"I really want to break into Product Management"

make products.

"If only someone would tell me how I can get a startup to notice me."

Make Products.

"I guess it's impossible and I'll never break into the industry."

MAKE PRODUCTS.

Courtesy of @edbrisson's wonderful thread on breaking into comics –
https://t.co/TgNblNSCBj – here is why the same applies to Product Management, too.


There is no better way of learning the craft of product, or proving your potential to employers, than just doing it.

You do not need anybody's permission. We don't have diplomas, nor doctorates. We can barely agree on a single standard of what a Product Manager is supposed to do.

But – there is at least one blindingly obvious industry consensus – a Product Manager makes Products.

And they don't need to be kept at the exact right temperature, given endless resource, or carefully protected in order to do this.

They find their own way.