Thank you, operator. Welcome, everyone, to the Professional Revolution's interim report for the Q2 2020. My name is Martin Karlsson, 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 and A session. Next slide, please. I'm proud to present the Q2 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-nineteen 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 revenue growth of 50% in the quarter, multiple factors combined that creates this very strong growth. COVID-nineteen creates a higher degree of activity and an overall positive impact, but we also need to remember that there are negative effects of COVID-nineteen as we operate on a lower level and also have, for example, Georgia Studio partly 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 €81,000,000 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 the offer to the shareholders of Netam 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-nineteen situation when we presented the Q1 report in April. It has, as we all know, continued to be a factor all through the Q2. We'll continue to focus on measures to create a safe workplace place for employees in our studios and to maintain operations 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-nineteen, and we expect that it will be several months before we are back to pre COVID levels in terms of number of operator 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 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 lockdowns being listed in many countries.
As I pointed out, there are also negative effects of COVID as number of operating 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 1st 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 yet, and naturally, we monitor the situation closely, but it's encouraging to see that we are starting to return to more and more normal situation in most areas.
Next slide, please. On June 24, we presented an offer to acquire NetEnt. The same day, we had a 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 product 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 from this point as I see a great potential in what we can do combining Evolution's and Netland's capabilities in life and flaws. 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 elements.
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 if putting the great minds of Evolution and Netland in the same room. We will definitely see more products that form a combination between live and slots. We need to build the products 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 life and Netherlands has a leading position in slots. By targeting the market with a broad portfolio comprising best of each vertical, we will be in an even stronger position capitalized 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, these cost synergies of about EUR 30,000,000 to be released during 20 21. We see great potential in creating a cost efficient, hungry and lean company, and naturally that 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 products, and as online casinos continues to grow its portion of the total casino revenues, we'll 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 shows bad spots, which is a good indicator of activity in our network. In the Q2, number of bad spots from end users amounted to SEK 11,900,000,000 compared to SEK 5,600,000,000 last year.
That is growth by 113%. Also compared to Q1, there's a good increase of 37%. The high activity in the Q2 is partly an effect of new players that have found their way to online casino with the absence of Sportsland, to bet on and close Landberg casinos. Also, it is an effect of our increasing range of game show style games that generate high volume and smaller bets, in Q2, the launch of Mega Ball and pre launch of Crazy Fire 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 play 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 STAAR 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 the 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 pace 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 Nordic 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%.
UK shows a decrease in the year on year growth for the Q2 with 16%, but an increase of 7% in revenue from the Q1 2020. Compared to 2019, UK is negatively affected by lower fixed fees as UK 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 UK 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 a coming slide. Other, including South Africa, South America and Africa and remaining part of the world shows a good growth of 42%. Revenues from regulated markets shows a growth of 14% and constitutes 33% 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 has many new games. We've added 6 new games this quarter and also Bakaraman also Baccarat Monterey is 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 games shows like Mega Ball and Crazy Time.
Mega Ball, our first game in the lottery vertical, was a great launch during the Q2, and on 1 July, we officially launched Crazy Time as well. It has taken about a year to develop Crazy Time and has been the most advanced game we made so far with a cost around double of what the 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 plays to sports betting players and everyone in between. There is truly nothing like it. Looking ahead, coming up later this summer is the instant or less and during the fall of craft games during the fall, our craft game. The craft game, which is the first ever done online, is a real gamblers game and that, of course, focus on the North American audience.
The environment for the game is prohibition time in U. S. During 1920s 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 will do if we continue delivering value to our operators and fantastic play 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 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 its own postponed timetable due to COVID-nineteen.
Michigan would be the 3rd regulated market in U. S. For online casino. This is a very 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 2nd large city in Lithuania, where 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 number 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 Q1 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 Q1, which was not very much affected by COVID, and also as we've seen all through last year. Also, we've had several successful new game launches during the quarter, as Martin just covered, Mega Ball, Flower Vatjack, Bakker and Multiplay, and the official launch of Crazy Time was 1st 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, scalable blackjack games or RNG first person blackjack games. 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 Q2, which is also reflected in the extra high growth rate. Moving on to EBITDA, also very strong in the quarter at €81,000,000 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 surplus 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 effects 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 1st 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, increase travel and also increase 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 look at the more detailed P and L for the period.
Revenues for the 3 month period April to June amount to EUR 128,300,000 As mentioned, that's an increase of 50% compared to the same period 2019. And for the 1st 6 months of 2020, revenue is about EUR 2 €43,000,000 which is a 47% increase from the corresponding period last year. Moving down, Personnel expenses totaled €30,300,000 It's in line with the same period previous year, but actually EUR 3,000,000 lower than the Q1 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 all studios.
Most of our employment contracts are a mix of fixed monthly salary and variable pay, we do not have the same percentage reduction in personnel cost as in 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 that in the quarters to come. Further down, depreciation is just under €7,000,000 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, consultants and royalties. The line amounts to EUR 16,800,000 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 increase as we grow revenues, so those will move together. But compared to last year, we also had higher cost this year for some extraordinary measures in the studios, extra cleaning, transport, sanitizer, etcetera.
So summing up, total operating expenses increased by €5,000,000 or 10% year on year in the Q2, which is a slightly lower increase than what we normally have and mainly due to lower personnel expenses. Tax is at €3,600,000 in the quarter for a tax rate of 5%, and all this sums up to a profit for the 3 month period of €70,400,000 and for the 6 months 1st 6 months of the year, just over €124,000,000 Profit for the period is up 104% compared to the first half of twenty nineteen. This equals an EPS of 0.38 euros per share for the 2nd quarter and for the rolling 12 month period €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 investment in tangible assets. This is mainly our studio construction. It is almost at €5,000,000 in the quarter. The main projects for the second half of the year is to finalize the studio in Pennsylvania, as we mentioned earlier, and also start construction in Michigan.
We also said last quarter that we are planning for 1 to 2 new mid sized studios in Europe, and we have settled on Lithuania and the city of Kaunas for one 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 is related to development of new games and features to the platform. It is €3,400,000 in the quarter, slightly up from Q1, but more or less in line with the pace from the full year of 2019.
Altogether, CapEx for the first half of the year is just over €15,000,000 which means we are in line with our guidance that CapEx for the year will be slightly up from the €30,000,000 invested during 2019. So a bit higher CapEx to be 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 it at this level, but we've also seen in the past that 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 of the slide, we 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 €76,000,000 but the strong result brings us back to €212,000,000 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, which state with states becoming more and more positive on regulating online casino. Time will tell at 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 Netan.
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 improved 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 during 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 We have first question from Ed Young from Morgan Stanley.
Please go ahead. We can't hear you.
Okay. It looks like we have the first question from Martin Allen from DNB Markets. Please go ahead. Hi, guys. Martin here.
Can you hear me?
We can hear you fine. 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, Cat Launch, 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, let's 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 added flow that we talked about. But exactly what is that, what is new games, what this 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 at least.
Okay. Great. And 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 is 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's 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 they are social distancing. 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 NVIDIA 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 goes first for employees and social distancing still puts limitations
to the studios.
Okay. Thanks. And I think
you mentioned also during the comment 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 back 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 statements we made. And of course, we look at the U. S. Market as potential.
We see it's opening up. And Matan'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 risk with acquisitions. I mean, look, I believe in hard work, dedication and focus and high energy, and that goes with an acquisition as well. You need to see that the companies come together fast and that we come into the delivery phase. And there's always risks to acquisitions, but I believe Evolution is very well positioned to take it on. I have fantastic management.
Thank you for that.
Okay. Thanks guys. I might come back later. Thank you.
Thank you. Thank you.
Next question from Eliane from Morgan Stanley.
Can you
hear me this time?
No. Yes, I
can hear you.
Great. Thank you, and thanks for taking my questions.
The first one is for Martin.
What is anything have you learned about player demand 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 willingness to 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 and your sort of pipeline for next year?
Good question. I of course, you learn. 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.
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 is left 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 types. So we were completely right in our strategy 3 years ago to go in this direction and create and invent the game show segment, which is then very attractive in a situation like that. That's also a 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.
Thank you. And just the last part of that was in terms of your creativity or sort of your pipeline, how much of that's been affected by the pandemic? Or do you still expect to be able to produce a similarly strong slate of gains for 2021?
Not really much. It's 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, but you made a comment there.
But given you'll be adding back capacity, is it sort of a fair assumption that H2 EBITDA growth will be more, if you like, revenue led and less cost led than P2?
I guess you could face it that way. As you said, we don't give the quarter to quarter guidance. So but the outlook for the second half is that we will gradually continue to reopen tables, which will mean that we get some of these fixed fees for the dedicated environments will slow the return. It will also drive a bit of costs. So then exactly what happens that there's, 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 when 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.
Okay. Thanks very much.
Thank you.
Thank you. Next question from Olsten Yaki from Kenny Hanvey. Please go ahead. Hello, your microphone is open.
Perhaps it's me, Oscar, from Carnegie here. A few questions. Hi, hi. Hi. 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 I mean, we are engaged 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 in 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 discussion 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-nineteen 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 it's political process, regulatory, tax implications, all different kinds of things affecting it. But there is a parity 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 revenues that have 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 pronounce or forecast.
Understood. And 2 more questions from me here. I 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 acceleration?
I mean, Asia, I would say the dedicated fleets do not affect Asia that much. They're very hardly any it's more or less on the network tables, all that volume. So that there's that effect is not so much there. So the broad statement in Malaysia is that we see a continued trend pretty much similar to what we've seen in the last I mean all through 2019 and also in Q1. So there's no real change in that.
And was that did I answer your question? I'm not sure.
Yes, absolutely. Final question from me then. Just sort of touching on previous questions here, but just to understand the dynamics with the personnel costs primarily now in Q2. I mean, I guess, there are some part time workers with sort of full time salary. Will there be a considerable increase in costs as the capacity utilization increases in the second half of the year, do you think?
As we scale up, the cost will come back, sure, yes. And it's simply that if we would have been able to operate full during Q2, we would have had much more revenue, some dedicated fees and then a little bit lower margin. Now we are sort of skimming a little bit like we're operating not all the tables. We get higher margin and pushing of or pushing the players to scalable games in a higher degree. So it sort of balances out.
Now when we come in to more as we scale up operations, of course, costs will come back. We will do that as fast as possible and as fast as safety allows. And then, of course, we will get more revenue as a result of that, and it will be a little bit lower margin on that. But in the total, we will also get the dedicated fees, which is done in another way.
And then I'll just add on to that, it's back to your H2 question earlier. On the other hand, you will have some of this kind of extra play that we've had from sports players in this quarter with gradually kind of level off in the 3rd and rest of the year. So those are the kind of the factors at play.
The underlying organic growth is fantastic. We came in from Q1 with fantastic figures. And if we would just have continued through Q2 without COVID, it would be a fantastic quarter. So yes.
Thank you. Next question from Lars Olsson from Pareto Securities. Please go ahead.
Hi guys. I just can just follow-up a final one on Asia where Oscar left off.
So would
it be reasonable to assume that we will have a relatively larger setback in Asia compared to other regions in Q3 given lower share of dedicated table fees and sports being back?
I don't think I can answer that really. I don't know. But look, I wouldn't say that the growth in Asia hasn't been driven. It's probably I mean, we've had this growth trajectory for a while, so there's probably less of this the effects of sports or no sports. I would say that's less in the Asian category.
There's, of course, some, but it's I wouldn't sort of point it out that Asia wouldn't fall back significantly more, not for that reason.
So the growth in Asia is mainly driven by the additional products and new customers here simply penetrating deeper into the Asian gambling market?
The Asian gaming market is very, very large, maybe 10, even 20 times bigger than Europe. So we are a small player and it's sort of a greenfield. I wouldn't say that COVID affected the Asian market for us in any really significant way, not like in Europe.
Okay. And also on operated tables, can you even provide us with a figure on how many tables you operated by the end of the quarter? So
done that. We haven't done that. I mean, as we said, it's a lower number and some type of direction would be, I think, towards the end of the year, we'll be back to pre COVID levels. So you could say where we were in Q1 is probably where we are in Q4 in terms of number of tables. That gives you some idea.
So back to 7 50 tables by end of the year, it's your Yes.
We haven't given an exact number, but that's what I just said was kind of some directional. I mean the reason we don't do it is that we don't see the number of tables. 1, it's very variable almost on a daily basis. And 2, it's not the only indicator of revenue. So we've chosen to kind of we provide that on kind of annual level to sort of it.
It, of course, indicates the growth of the company as a whole, but it's not a number we give quarter to quarter.
And on an aggregate level, with our tables being ramped up in Q3, Q4, We actually believe that the positive FX seen from absence of sports, etcetera, that higher the capabilities will be able to compensate the fall off from sports coming back.
I stated I look forward to the end of to the remaining part of the year. We have a good momentum in Q1, and you see the revenue growth there. And then we have COVID, which is sort of an odd quarter, And now we will come back to more normal situation during the remaining part of the year. Given that there is not a second wave and other things happening with the pandemic, which no one of us knows.
Okay. On products, it seems really positive on megamoles that has been out now for more than a quarter. If you rank it to other game releases the last year, how would you place
it? We don't do top list of the releases, but we can say Mega Ball is a fantastic new category of game. It's a bouncing ball game, and that's a lot of type of game, which we sort of then penetrate into a new section of gaming, online gaming for the future. But then we also released Crazy Time, which is the strongest release we ever made. So there are 2 fantastic new games that are being launched together with 5 others during 6 in total for the quarter and then Crazy Time coming in the next quarter.
So we have a product wise fantastic quarter to 2020. And we should also remember that we do those things and we release those again during the full pandemic. So it also shows that we are pushing forward even though the circumstances are very hard.
We can rank it number 1 in the lottery category. Okay.
And I asked this question, the last quarter report as well. Now we have more data, but Playtech was let into the GPC brand. What are you seeing? Are you still capturing all the money?
Sorry, I didn't get that. It's a comment.
I said You're
playing second gen,
Yes. Now you've placed second genuity. I don't think we have a comment on that.
I don't have full visibility on that. That's just to ask Beauty. But we are doing fantastically well with UDC. It's a valuable customer, and a good relationship, and we look forward to continue working with them for the future. So we're doing well.
And the final question for me here on U. S. And for the growth there. How do you see live casino versus slot in that market in the next few years going forward? Will it be a preference for slots?
And then gradually, like casino, will gain popularity? Or how do you view the market growth there?
I think share of life will increase over time, but I think the slots will do phenomenally in U. S. Both products will have a very bright future as the regulation proceeds in the U. S. Market.
Thank you.
Thank you. Last question from Erik Malberg from ABG. Please go ahead.
Good morning, gents. In regards of other receivables, during Q3 2019, you mentioned that this was due to tax receivable from Malta and that this would come down to normalized level. But still, we have basically seen every quarter an increase on your level, and we saw quite an increase now here in Q2, both on Q Q on Q and year over year. Could you elaborate a bit more on this?
Because it is actually almost all the other receivables corresponds to the current tax liabilities pretty much 100%. So it's with the increasing profit, also the tax liability is increasing. So there's it's the same placement.
Okay. Because then you said it was sort of like a seasonality effect, the usually comes up in Q3. But this is not really the case anymore or
Well, I mean, it depends on the profits that we generate every quarter. So I think this doesn't have what we have if it was 1 or 2 quarters ago, we have sort of 2 years, Both 2018 2019 were in the same now. I think it is just should be 2019, that's the year, and then whatever we've done in 2020. So all the other receivables are related to tax.
Okay. Fair enough. Thank you, guys.
Thanks, Eric.
Thank you. We don't have any questions for the moment. There are no further questions. Please proceed with the conclusion.
Okay. Thank you, everybody, for listening. I was proud to present this quarter. Look forward to speak to you soon again. Thank you.
Bye bye.