Evolution AB (publ) (EVO) Earnings Call Transcript & Summary

Ladies and gentlemen, welcome to the Evolution Gaming Group Q2 Report 2020. Today, I am pleased to present CEO Martin Carlesund and CFO Jacob Kaplan. [Operator Instructions] Speakers, please begin.

Thank you, operator. Welcome, everyone, to the presentation of Evolution's interim report for the second quarter 2020. My name is Martin Carlesund, and I'm the CEO of Evolution Gaming. With me, I also have our CFO, Jacob Kaplan. I will start off the presentation with the quarterly highlights and achievements and give some comments on our new fantastic titles that we have released. Jacob will then go through the financials, and I will conclude to provide some thoughts on the future, followed by Q&A session. Next slide, please. I'm proud to present the second quarter 2020 for Evolution. It's been another quarter with high operational activity given the situation in the world and almost exceptional financial performance by Evolution. I already now also want to tell you how exceptionally well all employees of Evolution have handled the COVID-19 situation. It is different and challenging times right now, and to be able to continue to deliver under those circumstances shows how fantastic they are. We have a revenue growth of 50% in the quarter. There are multiple factors combined that created this very strong growth. COVID-19 creates a higher degree of activity and an overall positive impact, but we also need to remember that there are negative effects of COVID-19 as we operate on a lower level and also have, for example, Georgia Studio Park closed during the quarter. At the same time, we have launched new nothing but fantastic games during the quarter, with, for example, Mega Ball, which supports the growth. On top of that, the global demand for our products continue, and we see continued increase of share of Live and underlying market growth. The combination of high volumes and the global demand for our products, together with our constant pursuit of cost efficiency, has resulted in a fantastic result this quarter. Altogether, we reached an EBITDA over EUR 81 million and EBITDA margin in the quarter over 63%. Fantastic numbers, and I'm very pleased with our financial performance in this quarter. Other significant events in the quarter include offer to the shareholders of NetEnt and also several new game launches. I'll come back to both these items later in the presentation. Next slide, please. We spoke at length about COVID-19 situation when we presented the Q1 report in April. It has, as we all know, continued to be a factor all through the second quarter. We'll continue to focus on measures to create a safe workplace for employees in our studios and to maintain operation for our operators. At the same time, a significant part of our workforce has continued to working from home. Overall, we have managed operations well with few disturbances during the quarter. We have been operating fewer tables due to COVID-19, and we expect that it will be several months before we are back to pre-COVID levels in terms of number of operated tables. Right now, we gradually restart across our studios, but we do it with caution to maintain social distancing and all other measures needed. At the end of March, we saw a positive effect on demand with many new players entering the Live segment as an effect that persisted during Q2. In June, we can see some effect from the fact that several sport leagues have resumed play as well as lockdown being lifted in many countries. As I pointed out, there are also negative effects of COVID as number of operated tables are lower, which lowers the revenue. It's also reasonable to believe that there are some long-term positive effects on demand as many new players have been introduced to our Live Casino during the last quarter. The first 6 months of this year have been truly challenging. Through very hard work and a bit of luck, we have come through this extremely difficult situation in a good way. The pandemic is not fully behind us, yes. And naturally, we monitor the situation closely, but it's encouraging to see that we are starting to return to more -- a more normal situation in most cases. Next slide, please. On June 24, we presented an offer to acquire NetEnt, the same day where the press conference where we stated what we see as the rationale of combining the 2 companies, and I will repeat some of that here. If you heard me present Evolution in the past, you know that innovation and products are important to me. I simply believe that we, as a product company, constantly need to develop. We need to make Evolution a little bit better every single day and constantly increase gap to competition. Every day creates a little better user experience for our end users. Everyone in Evolution is on a mission to find one thing making us better every day. I would like to start on this point as I see a great potential in what we can do, combining Evolution's and NetEnt's capabilities in Live and slots. For the past years, you have seen Evolution inventing and creating Game Show -- the Game Show segment in online casino, combining core Live products with RNG element. For us, now to also add slots and explore what can be done with the combining elements from both sides makes me very excited to think about what can be created in putting the great minds of Evolution and NetEnt in the same room. We would definitely see more products that form a combination between Live and slots. We need to build the product for the future. We need to constantly develop as our world does. Another focus over the past year has been the U.S. market, where Evolution has a leading position in Live, and NetEnt has a leading position in slots. By targeting the market with a broad portfolio comprising best of each vertical, we will even then be in a stronger position, capitalize on the opportunities and growth on the U.S. market. We think that U.S.A. and the potential to become the largest in the market in long term. And in addition to U.S.A., the new reinforced offering will support further growth and expansion in other markets as well. As stated in the press release is cost synergies of about EUR 30 million to be released during 2021. We see great potential in creating a cost-efficient, hungry and lean company, and naturally, that work and ambition will continue also after 2021. The upside on revenue side is bigger than the cost synergies, where cross-selling and distribution will be major drivers. There's a global demand for our product. And as online casino continues to grow as a portion of the total casino revenues, we will see a long growth runway ahead. All in all, the combination will also provide great upside to customers, and they can feel confident that we'll continue to serve them with the best product innovation and operational excellence. Next slide, please. This slide show bet spots, which is a good indicator of activity in our network. In the second quarter, number of bet spots from end users amounted to 11.9 billion compared to 5.6 billion same period last year. That is growth by 113%. Also, compared to Q1, there's a good increase of 37%. The high activity in the second quarter is partly an effect of new players that have found their way to online casino with the absence of sports event to bet on and closed land-based casinos. Also, it is an effect of our increasing range of game show-style games that generate high volume of smaller bets. In Q2, the launch of Mega Ball and prelaunch of Crazy Time are both games in the Game Show category. We do expect that some of the extra volume in Q2 will level off as sports activities come back, and we saw some of that already happening in June. However, we do believe that many of those new players that have been introduced to Live Casino in recent months will help accelerate the growth in the long term. We can clearly see the audience for Live games increase not only by existing players in the online gaming sector but also with completely new player groups attracted by our game shows. This is success of our strategy to widen Live into softer players, which was initiated over 3 years ago. Next slide, please. The staff and the recruitment of staff is absolutely crucial to our success. Much of the greatness of Evolution is that we have managed to recruit the best talent in all our markets. But due to the current situation with our -- with us operating fewer tables, the full-time equivalent, FTEs, are lower in the quarter. We have also had to reduce headcount in Georgia operations at the beginning of April as we had significant fewer tables running. As I mentioned, we are scaling back up in all locations, and I expect FTEs and headcount numbers to increase through the rest of the year. The reason for not coming back to full operation faster is the demand for social distancing and other COVID safety measures. We still see a very high demand for tables, and we will continue to grow with our clients, which means a higher recruitment base as soon as the situation with corona is more stable in the world again. Next slide, please. This slide shows the breakdown of our revenue by geographic region. The Nordics is stable, but -- our smallest market, contributing with about 5% of total revenue. Growth has been moderate since the same quarter last year amounting to 12%. U.K. shows a decrease in the year-on-year growth for the second quarter with 16%, but an increase of 7% in revenue from the first quarter 2020. Compared to 2019, U.K. is negatively affected by lower fixed fees as U.K. companies have moved their billing address to other countries in Europe. However, playing volumes are up significantly compared to Q1. So the market development in U.K. is more positive than the figures show. Rest of Europe continues to develop well and constitutes about 50% of revenues. The growth rate year-on-year amounts to 42%. Both Asia and North America is growing quickly, with 181% and 81%, respectively. We see good potential in both these markets and expect a continued high growth rate the rest of the year. We're especially happy to see the recent regulatory movement in U.S.A., which increased the potential, and I will get back on that on the coming slide. Other, including South Africa -- South America and Africa and the remaining part of the world, shows good growth of 42%. Revenues from regulated markets shows growth of 14% and constituted 3% of revenue. It's a lot lower than previously mainly due to lower fees from dedicated tables in the quarter. A large part of our table fees are in the regulated markets. And due to fewer tables in operation, those fees are lower in Q2, and it also reduces the percentage share of revenue from regulated markets in this quarter. Next slide, please. We continue to widen the gap to competitors. No one else has a product portfolio close to ours, and no one adds many new games. We have added 6 new games this quarter, and also Baccarat -- it's -- and also Baccarat Multiplay, it's nothing less than extremely good. This year, we are launching 12 new games in all areas: new features, twists on traditional table game, new RNG games and new game shows like Mega Ball and Crazy Time. Mega Ball, our first game in the lottery vertical, was a great launch during the second quarter. And on 1st of July, we officially launched Crazy Time as well. It has taken about a year to develop Crazy Time, and it has been the most advanced game we made so far, with a cost around double of a normal game show. Pre-launch with a limited number of operators indicated that Crazy Time would be the most successful launch Evolution has ever made. And yes, our expectations so far have been fulfilled. Crazy Time is some of the best work Evolution has ever done, and I honestly believe that it's the most fun casino game in the world. It highlights the paradigm shift for Evolution. This game will appeal to audiences far and wide, from slot players to sports bet players and everyone in between. There is truly nothing like it. Looking ahead, coming up later this summer is the Instant Roulette and during the fall of Craps games -- and during the fall, our Craps game. The Craps game, which is the first ever done online, is a real gambler's game, and that, of course, focus on the North American audience. The environment for the game is Prohibition time in U.S. during 1920s and early '30s. It just looks fantastic. The studio is magnificent. It is important to point out that we continue to innovate, substantially enhance and refine the playing experience in table games in our core. Our ambition to pave the way for the entire industry by launching new groundbreaking products and, of course, continue to increase the distance to our competitors, which we'll do if we continue to start delivering value to our operators and fantastic playing experience to our players. The table games are still our core. But the game shows are aimed at a new audience that might not have found live games before, a way for operators to cross-sell and introduce live games to a wider audience. As I mentioned earlier, the combination with NetEnt will create a great opportunity for game development in RNG as well as Live and in the combination of the 2. Really looking forward to what that -- what we could do together. Next slide, please. In addition to product development, we are continuing to invest in the future in form of new studios. We continue to stay focused on further strengthening our North American footprint. We have expanded the capacity in New Jersey to meet the growing demand and to be able to serve more customers with new games. The construction of a new studio in Pennsylvania continues but will be postponed -- it's on a postponed timetable due to COVID-19. Michigan would be the third regulated market in U.S. for online casino. This is a positive development. And we expect more U.S. states to allow online gaming in the upcoming years, and we are well positioned to capitalize opportunities that will open. It's also worth noting in this context that New Jersey has outperformed our expectations in terms of the market size, which shows a good total potential for the U.S. market as a whole. In order to answer up to the high demand of our studios in primarily Europe and Asia, we are planning to build 2 new English-speaking studios: one in Kaunas, the second largest city in Lithuania, the construction already started; and one more in Europe, which is currently in the planning phase. I will now hand over to Jacob, who will guide you through the financials. Next slide, please.

Thank you, Martin, and good morning to all of you listening. I will take you through a closer look at our financial performance during the quarter. I'm on Slide #10 titled Financial Development. This slide shows our revenue and EBITDA per quarter. We've seen a very strong increase in volumes during the quarter. Top line growth is up 50% year-on-year and up 11% compared to the first quarter of this year. As Martin pointed out earlier, there are both positive and negative effects on our revenue from the COVID pandemic in this quarter. And several factors, not all related to the pandemic, are behind the good revenue number. As we mentioned when we spoke in early April, we saw an increase in volume on our games as sporting events were canceled and players opted for casino games to a larger extent. However, we also had a very good underlying growth coming into the quarter as we saw in the growth in the first quarter, which was not very much affected by COVID, and also as we've seen also last year. Also, we've had several successful new game launches during the quarter, as Martin just covered, Mega Ball, Power Blackjack, Baccarat Multiplay. And the official launch of Crazy Time was 1st of July, but the beta phase ran through June. So there are several factors supporting the revenue development. But yes, there is also a part related to canceled sporting events, and that part will now level off as sports start to come back. The negative effect on revenues from the pandemic comes from the fact that we have reduced the number of tables that are operating. This means that the number of tables in dedicated environments for operators have also been reduced, and thereby, we have not fully charged the fixed fees for those environments. Also, fewer tables means that some players do not find their favorite tables or find a seat for Blackjack and, therefore, don't play. Some of this is compensated as players have gone for other games, game of Blackjack games or RNG first-person Blackjack game. So some of that volume comes back. As you hear, there are several effects, both positive and negative, and I can't exactly quantify each one individually. All in all, the net effect of COVID is positive in the second quarter, which is also reflected in the extra high growth rate. Moving on to EBITDA, also very strong in the quarter at EUR 81 million for an EBITDA margin of 63%, with the reduced number of tables leading to a lower cost level, and at the same time, the revenue effects I just spoke of, the margin is boosted in the quarter. Part of this is a short-term effect. But as we have stated during last year, we have worked hard to establish an efficient setup in our operations. And that means that when revenue comes through, we also get a good effect on margin. Our guidance at the start of the year that we would increase margin in 2020 compared to 2019 shows that. And as you see in the chart, also Q1 had a strong margin. So the short-term effect of the pandemic gives a boost to a trend that we were already in earlier. We will not change guidance regarding margin for the year at this time. There's a good distance to the 50% margin of 2019 after the first 6 months of this year. I would not extrapolate from the Q2 level going forward. We do come into the second half of the year when we will pick up activity in studio construction, increased travel and also increased activity in other areas. That said, long term, we still see that we can increase margin when we increase revenue. Operator, let's go to the next slide, please. Let's take a closer -- take a look at a more detailed P&L for the period. Revenues for the 3-month period April to June amounted to EUR 128.3 million. As mentioned, that's an increase of 50% compared to the same period 2019. And for the first 6 months of 2020, revenue is about EUR 243 million, which is a 47% increase from the corresponding period last year. Moving down, personnel expenses totaled EUR 30.3 million. It's in line with the same period previous year, but actually EUR 3 million lower than the first quarter of this year. The reason for the lower personnel cost is that the number of tables have been reduced, as we've mentioned a few times, meaning that we have fewer hours offered. It has led to a reduction in staff in some locations and, generally, fewer hours worked in our studios. Most of our employment contracts are a mix of fixed monthly salary and variable pay, so we do not have the same percentage reduction in personnel costs as the number of tables. As we said earlier, we are now increasing the number of tables gradually, step by step. And there is also pent-up demand for new tables once the pandemic allows new construction. So we will continue to recruit and increase staff in the quarters to come. Further down, depreciation is just under EUR 7 million in the quarter. That's up 18% compared to the same period last year. Other expenses, next item, include, among other items, consumable equipment, communication costs, consultant and royalty fees. The line amounts to EUR 16.8 million. That's up 34% from the same period last year. And for the 6-month period, the increase is 29%. Part of that increase is in royalties, which increased as we grow revenues. So those will move together. But compared to last year, we also had higher costs this year for some extraordinary measures in the studios: extra cleaning, transport, sanitizer, et cetera. So summing up, total operating expenses increased by EUR 5 million or 10% year-on-year in the second quarter, which is a slightly lower increase than what we normally have and mainly due to lower personnel expenses. Tax is at EUR 3.6 million in the quarter for a tax rate of 5%. And all this sums up to a profit for the 3-month period of EUR 70.4 million and for the 6-month -- first 6 months of the year, just over EUR 124 million. Profit for the period is up 104% compared to the first half of 2019. This equals an EPS of EUR 0.38 per share for the second quarter and for the rolling 12-month period, EUR 1.14 per share. Operator, we can go to the next slide. Before I hand back to Martin, we'll also take a closer look at the cash flow. Starting to the left in the slide, the chart shows development of capital expenditure. The gray part of the bars show investments in tangible assets. This is mainly our studio construction. It is almost EUR 5 million in the quarter. The main projects for the second half of the year is to finalize the studio in Pennsylvania, as mentioned earlier, and also start construction in Michigan. We also said last quarter that we are planning for 1 to 2 new midsize studios in Europe, and we have settled on Lithuania in the city of Kaunas for 1 of those sites. We continue to evaluate sites for a second studio. And I would say, likely, we'll come back to that later this year. As we said earlier, right now, we are mainly reopening tables that have been closed due to COVID. But these new studios that we are planning will be important to support growth from 2021 and forward. The blue part of the bar represents investments in intangible assets, and it's related to development of new games and features to the platform. It is EUR 3.4 million in the quarter, slightly up from Q1, but more or less in line with the pace from the full year 2019. Altogether, CapEx for the first half of the year is just over EUR 15 million, which means we are in line with our guidance. That CapEx for the year will be slightly up from the EUR 30 million invested during 2019. So a bit higher CapEx than we expected during the second half of the year. In the middle of the slide, we show operating cash flow. It is very high in the quarter as we have a bit of a catch-up effect from Q1 when cash flow was lower. We had a good improvement in accounts receivable in the quarter. I mentioned accounts receivable the last time we spoke, and it has been a focus for us during the quarter. It will continue to be so. We will work to keep at this level. But we've also seen in the past that the payments and payment cycles can be lumpy at times. But good development in this quarter. Cash conversion for the 12-month period is up to 83%, which is a good level. Finally, to the right in the slide, a look at the balance sheet. No major changes show up here between the quarters as it's a snapshot at the end of each period. During the quarter, we have paid dividend of EUR 76 million, but the strong result brings us back to EUR 212 million in cash. So we are in a continued strong financial position. That was the end of my prepared comments. I'll hand back to Martin for some closing words, and we'll take questions after that. Over to you, Martin.

Thank you, Jacob. A few words to conclude this report presentation. Everything we do is about one thing, to extend the gap to competition and strengthen our market leadership. The perpetual mission is a common thread in our studio expansion as well as in product development, operational excellence and recruitment. I see fantastic opportunity in the U.S. market, with states becoming more and more positive on regulating online casino. Time will tell that what pay states will speed up online casino regulation, but when they do, Evolution will be there. The top priority for me now is to make sure we can open up in Pennsylvania. Of course, one of the top priorities as well is to close the deal with NetEnt. This is a landmark deal, which will accelerate Evolution's move towards becoming the world leader on the online casino market. The combined product portfolio will include some of the world's most popular Live Casino and online slot games and generate revenue upside through cross-selling and improve distribution with both companies' customer bases. We're coming towards the end of this presentation. It's a fantastic quarter with revenue growth of 50%, EBITDA margin above 63%, launch of 6 new games, where one is the best launch ever. But this is not the time to celebrate. This is not the time to relax. Everyone in Evolution did great work. And with that and some luck, we so far got through the pandemic in a great way. But now we have a lot to do, more than ever, actually. We have a lot of studios to build, customers to deliver to, games to build and other demands to fulfill. We need to work very hard through the remaining part of this year. We need to increase speed, deliver more and try to find ways to expand faster. We need to make Evolution better every single day. 2020 has started well, and I look forward to see the rest of the year. Thank you. Let's move to questions.

[Operator Instructions] You have first question from [ Evian ] from Morgan Stanley.

We can't hear you.

Okay. It looks like we have the first question from Martin Arnell from DNB Markets.

Martin here. Can you hear me?

We can hear you fine, Martin.

Perfect. Okay. Let's start with these effects from the pandemic. You mentioned that the net revenue effect was positive. Can you provide us with sort of a rough estimate on the revenues in terms of percentage points in this quarter?

We came into the quarter from Q1 with a very high speed. You see the figures in Q1, I mean fantastic revenue growth there as well. We see, in effect, activity in the quarter where, of course, lack of sports and other reasons, COVID contributes to that activity. But we also see that we are not operating at full capacity, so revenue is lower. We introduced new games. Craps launched, Crazy Time, Mega Ball. But to distinguish exactly how these different parts play out will not be possible.

Okay. Fair enough. So it's fair to assume similar underlying revenue growth as you had in Q1 then, I guess?

Yes. I mean your guess is as good as ours, I'd say. I mean I think that's -- what we're saying is that we had good momentum coming in. And it's -- I think it's fair to assume that some of the good results in this quarter, of course, is this asset flow that we talked about. But exactly what is that, what is the new games, what -- these -- all the factors kind of work together. So I would -- as you say, it's a good speed coming into the quarter, and that can be a starting point, I'd say.

Okay. Great. On your -- recruitment is a big part of your business. And you had some temporary layoffs in the quarter. And I was just wondering how's the recruitment going for new capacity in the second half and into next year.

I would say that we are on full speed in recruitment right now, and there is nothing sort of holding us up when it comes to recruitment. So that part is working well. The challenge right now is, of course, that we need to take the safety for our employees first, and there are sorts of business in. So there is still even though opening and still scaling up. There are capacity limitation in studios due to the rules and the pandemic. So as they change and the pandemic sort of comes to the next phase, we will continue to scale up.

Great. And in Georgia, in the Georgia studio, what's your occupancy for the moment compared to pre-pandemic?

We don't comment on individual studios, but we are increasing as we speak. Essentially, we are increasing every week right now coming back into operation. But as I said, we follow the regulations of each country and safety goals for our employees, and social distancing still puts limitations to the studios.

And I think you mentioned also during the comment you just said that -- you said that from what we see right now, it will be several months before we are back to the pre-COVID levels. So it's not that we are kind of -- like next month. It will probably linger on for maybe the rest of this year.

Yes. Perfect. And the NetEnt acquisition, you mentioned that sort of the most important opportunity here is the revenue synergies. Can you elaborate a little bit more on what this could be?

We stated that the revenue synergies will be bigger, more significant than the cost synergies. That's the statement we made. And of course, we look at the U.S. market as potential, we see it's opening up. And NetEnt's position, together with our position on the U.S. market, will create a very attractive offer to the customers in U.S. and take us to a favorable market position together.

Is it mainly on your client and distribution? Or is it sort of combining on product development, would you say?

I wouldn't sort of quantify each part of it. But there is, of course, a major component in the revenue synergies coming out of the distribution and our global demand that we see and the way we can combine these companies. At the same time, I'm very excited to look at how we can combine the products and how we can enhance both sides, meaning Live and slots, going forward together.

Okay. And finally, just any longer-term risks with an acquisition like this that you would highlight?

There is always risks with acquisitions. I mean, look, I believe in hard work, dedication and focus on high energy, and that goes with an acquisition as well. You need to see so that the companies come together fast and that we -- so that we can come into the delivery phase. And there's always risks to acquisitions, but I believe we'll -- Evolution is very well positioned to take it on. I have a fantastic management. Thank you for that.

Next question, from [ Evian ] from Morgan Stanley.

Can you hear me this time?

Yes.

Yes.

Great. The first one is for Martin. What is any thing that you learned about player demand and behavior during the quarter? So given you took out capacity and delivered strong volumes and growth, you've obviously remixed, I guess, towards more scalable games. Does this tell you anything you didn't know before about player flexibility? Or will you mostly try new game types? And does it sort of alter how you think about driving growth in future years? And I guess related to that question, is the disruption of the pandemic going to affect your creativity in your sort of pipeline for next year?

Good question. Of course, I mean, we all learn from the pandemic, and then it's about how to express it and what. I would say that one thing to learn is that we need to be planning better for being more resilient to those situations in the future. So we're working on that, and we're well on our way. It's not big things that we need to do, but we need to think a little bit more about that. That's a learning. When it comes to the players, I think that we can also see that players are moving more when there's less to select from. And in the medium time, that doesn't really hit us bad, but I believe it will hit us in the long term. If we force the players to play games that they are not really, really wanting to play, it will hurt them in long term. But in the short term, it doesn't really. So that's another key takeaway. I also think that the game shows -- we see how the volume, how attractive they are to the new player side. So we were completely right in our strategy 3 years ago to go in this direction and create an event, the Game Show segment, which is now very attractive in a situation like that. That's also key takeaway. So I think that -- to sum it up, players in the future will play more different type of games than they did earlier. So they will move around a little bit more. That's some comments.

I guess the last part of that was in terms of your creativity or sort of your pipeline, how much of that is being affected by the pandemic? Or do you still expect to be able to produce a similarly strong slate of games for 2021?

Not really much. It is not affected in -- not really much.

Great. Okay. And the second one, for Jacob. Can you help us to think a little bit about the profile of H2 profit growth? I know you don't have to be drawn on margins. You made a comment there. But given you'll be adding that capacity, is it sort of a fair assumption that H2 EBITDA growth will be more, if you like, revenue-led and less cost-led in Q3?

I guess you could say it that way. As we said, we don't give the quarter-to-quarter guidance. So the outlook for the second half is that we will -- of course, we will gradually continue to reopen tables, which will mean that we get some of these fixed fees for the dedicated environment with slow return. It will also drive a bit of cost. So then exactly what happens, there is, of course, uncertainty on the revenue. The final players that come in and play on an existing roulette table have a high-margin contribution. So how that plays out, also, of course, plays into what the margin will be during the second half. But as a broad statement, I think that's fair, what you said.

Next question, from Oscar Erixon from Carnegie.

Perhaps it's me, Oscar, from Carnegie here. A few questions -- a lot of stuff happening in the U.S. currently, of course, with operators investing heavily there. What types of discussions have you been having with operators regarding market access to different states and different types of games and tables that they want?

I mean we are engaging in Michigan and Pennsylvania now, of course. And you saw that we already signed for -- basically, we're in a very good place in New Jersey. So -- and I mean Michigan is opening up, and we expect to have a wide variety of games. We added games and tables now in New Jersey as the capacity grows. Pennsylvania, we will open a good variety of games. So -- I mean we are in discussion with all operators essentially on the market in these states. Then the states to come, we are not on that level yet. I mean there is more regulatory and political discussions still.

Got it. And do you have sort of a view on the U.S. market side? In, let's say, 5 years' time, what type of acceleration are you seeing due to COVID-19 when it comes to online casino regulation?

We don't -- I mean no one has a clear view on what will happen in, like, say, 5 years on the U.S. market because of its political process, regulatory tax implications, all different kinds of things affecting it. But there is a tad increase in the opinion about online gaming in U.S. You can feel that because, suddenly, when this pandemic hits, it's sort of affecting people, and they see that if they would have had online, they would have had some revenue instead of a closed land-based casino. So there is a change, but how that pace or how that change will affect the pace of regulation in U.S., it's still very, very hard to prognose or forecast.

Understood. And 2 more questions from me here. Have to touch on the very strong growth in Asia. I assume that there was a somewhat negative impact from lower dedicated table fees. But what can you say about the mix there growing by over 180% year-on-year, that acceleration?