Evolution Shares Dive After ‘Black Market’ Admission

Evolution Shares Dive After ‘Black Market’ Admission.

Costfoto / NurPhoto / Getty Images

Key Takeaways

Shares in [ST: EVOG] plunged by more than 10% on Monday, the last day of trading before Christmas, over news that the Swedish online gaming software provider’s license was under review by the UK Gambling Commission (UKGC). The company’s shares rallied slightly on Friday.

Evolution AB, Evo, UKGC, black marketInvestors fear the UKGC investigation might have a spillover effect into other jurisdictions, according to analysts, although these fears may be overblown. (Image: Casino.org)

The investigation is related to claims that Evolution’s games were accessible to players in the UK through unlicensed operators, which the company acknowledged in a note to investors on December 20. Evolution confirmed its games had appeared on unlicensed sites but added the situation was now remedied.

“…[G]ames on the identified websites not holding a Commission license have been made unavailable from the UK,” read the note.

‘Forceful Action’

Martin Carlesund, CEO of Evolution, said his company was “now taking forceful action, using all technical tools available” to ensure its games were only available to Brits through UK-licensed operators.

Evolution remained committed to “an open and transparent relationship” with regulators, Carlesund added.

Shareholders were spooked by the possible consequence of the review, which could result in a hefty fine, or even license suspension or revocation.

While the UK accounts for only about 3% of Evolution’s revenues, analysts at Jeffries suggested investors were concerned that the review could spark regulatory action in additional territories.

Analysts at Pareto suggested these fears were overstated, however, and Evolution isn t in danger of losing its UK license.

Mystery Report

Evolution is currently engaged in a defamation case in which it s suing an that authored a 2021 report alleging the company was conducting business in various black markets. These included countries subject to US sanctions, such as Iraq, Sudan, and Syria.

The report was presented by Newark, NJ-based law firm Calcagni Kanefsky in the form of a complaint to the New Jersey Division of Gaming Enforcement (DGE).

A subsequent DGE investigation found no regulatory breaches by Evolution and the company was cleared of wrongdoing in February 2024. The software provider has petitioned the New Jersey Superior Court to reveal the identity of its accuser, so far unsuccessfully.

In April, a judge determined that more work needed to be done to examine the allegations contained in the report before Evolution could find out exactly who it s suing. That was because of the need to balance an attorney’s obligation to avoid revealing a client’s identity against a plaintiff’s right to get the information needed to pursue civil action, the judge ruled.

News of the DGE investigation wiped US$3 billion off Evolution’s market cap, according to the company’s lawsuit.

Article Sources
Laughlin’s Riverside Resort Casino Confirms Data Breach, 55K Customers Affected editorial policy.
  1. VIDEO: Las Vegas Debuts New Tourism TV Ad

Compare Accounts
×
Crystal Cruises Bringing Back Casinos for 2024 Excursions
Provider
Name
Description
Jackpot: Two Players Win $1M on Dragon Link Slot at Wynn — On Same Weekend  Australia’s Sportsbet Sees Profits Slip Amid Higher Taxes and Marketing Spend  Atlantic City Casinos Hype New Jersey Gaming Town as Ideal Fall Getaway  Indianapolis Colts Allow Running Back Jonathan Taylor to Seek Trade  Aussie Greyhound Racing Trainers Suspended for Brutal Live-Lure Tactics  Encore Boston Harbor Avoids Strike, Reaches Union Contract  LOST VEGAS: First Documented ‘Trick Roll’ by a Prostitute  VEGAS RESTAURANT ROUNDUP: Food Network Star Joins Caesars Palace, Mexican Restaurant Standoff  Las Vegas Icon Jimmy Buffett Dies at 76  VEGAS MUSIC ROUNDUP: Lady Gaga to Return to Strip, Jonas Bros. Add Show