Evolution Stock Tumbles 10% After UK Black Market Gaming Admission
Evolution AB stock dropped over 10% before Christmas after the UK Gambling Commission (UKGC) announced a review of the company's license. The decline came following Evolution's admission that its games were accessible to UK players through unlicensed operators.
Evolution stock price decline graph
The company acknowledged the issue on December 20 but stated they had already made their games unavailable on unlicensed websites targeting UK players. CEO Martin Carlesund emphasized their commitment to using all technical tools available to ensure compliance with UK regulations.
While the UK represents only 3% of Evolution's revenue, investors worry the review could trigger regulatory actions in other jurisdictions. The investigation could result in fines or potential license suspension, though analysts at Pareto suggest license revocation is unlikely.
This incident follows a separate 2021 controversy where an anonymous report claimed Evolution operated in black markets, including US-sanctioned countries like Iraq, Sudan, and Syria. While the New Jersey Division of Gaming Enforcement (DGE) cleared Evolution of wrongdoing in February 2024, the company continues legal efforts to identify the report's author through the New Jersey Superior Court.
The 2021 allegations had previously caused a $3 billion drop in Evolution's market value. The company has since recovered somewhat, with shares showing a slight rally following the initial drop from the UKGC review announcement.