Evolution Gaming has officially abandoned its acquisition of Galaxy Gaming due to the failure to secure two crucial gambling regulatory approvals, which halted the transaction from closing within the set timeframe.

On Tuesday, the company announced its decision to terminate the merger deal with Galaxy Gaming, a provider specializing in table games and casino technology. Evolution will compensate Galaxy Gaming with a termination fee of $5.2 million.

Galaxy Gaming disclosed on Monday that the two required regulatory approvals have not been secured. They were contemplating either seeking a further extension for the closing deadline or proceeding with the termination of the merger. Evolution subsequently opted to withdraw from the agreement.

This acquisition was first announced in July 2024, when Evolution planned to acquire all outstanding shares of Galaxy Gaming in a deal estimated at around $85 million. The deadline for closing the deal expired on Friday.

Despite the merger’s collapse, Evolution expressed its intent to maintain collaboration with Galaxy Gaming through their ongoing business relationship. Both companies extended their licensing agreement for another ten years back in 2023.

The merger’s termination comes on the heels of Evolution’s second-quarter performance, which revealed a year-on-year revenue decrease of 1.2% to €517.8 million ($591.4 million). The downturn was primarily attributed to a 3.7% revenue decline in the Asian market.

Evolution reported EBITDA of €341 million ($389 million), down from €345.3 million ($393.93 million) in the same quarter of its fiscal year 2025. This drop in revenue and EBITDA occurred despite a resurgence in European markets after several quarters of decline. European revenue improved by 3.5% compared to the prior quarter, while Latin American revenue surged 26.3% year-on-year.

In the disclosure of its second-quarter results, Evolution’s CEO Martin Carlesund remarked that the organization had devoted considerable time and resources to fulfill the administrative demands linked to the acquisition over the last two years. He also noted that the size of Galaxy Gaming rendered the deal immaterial to Evolution.

Evolution CEO Martin Carlesund 

“Galaxy is an excellent company; however, due to its scale, the transaction isn’t critical for Evolution,” Carlesund stated. “The outcome will not significantly affect our current operations, our U.S. segment, or our long-range goals.”

Carlesund indicated that Evolution’s revenue and margins have improved in comparison to the first quarter, while cost management measures are still in place and cash flow is on the rise. He highlighted that the company continues to expand in key markets and is making progress with its product initiatives despite facing several challenges during the quarter.