Evolution Undergoes UKGC Review, Stock Plummets 10% Amid Regulatory Issues

Evolution AB, a global titan in live and B2B online casino solutions, is under investigation by the UK Gambling Commission (UKGC). The formal review is inspired by concerns that the software developer’s games were available in the UK through operators without a license from the commission.

The UK market generates 3% of Evolution’s overall revenue, but recent scrutiny has spooked investors. According to the commission, the review could end in several ways, from no action to severe repercussions like fines, additional licensing rules, or even suspending or revoking the operator’s license.

Negative Market Reaction

News of the review caused a significant hit to Evolution’s stock, with the value plummeting over 10%. Jefferies’ analysts worry that the UKGC’s actions could have broader effects, inspiring other regulators to perform similar checks and potentially causing a decline in the company’s global operations.

The UKGC investigation comes at a challenging time for Evolution, which recently faced claims of facilitating underground activities in regions like Asia, which are high-revenue markets. The company was also recently fined $25,000 by the Pennsylvania Gaming Control Board (PGCB) for surveillance failures at its live dealer studio.

Evolution’s Pledge for UK Regulation Support

Evolution has acted swiftly to address regulatory concerns and is committed to cooperating with the commission. The company assures it has taken down its games on unlicensed platforms and is engineering corrective measures.

“We are now taking forceful action using all technical tools available to use to ensure that our games are only available in the UK through Commission licensed operators. We believe that a close collaboration to address our joint concerns will lead to swifter and better results. As always, we remain committed to an open and transparent relationship with our regulators,” stated Evolution CEO Martin Carlesund.

Strong Commitment to Safe Gambling

The UKGC’s scrutiny of Evolution is part of a broader trend of growing regulatory oversight to stop illegal gambling operations globally. Speaking at the commission’s annual meeting, UKGC CEO Andrew Rhodes underscored the importance of dismantling illicit activities by asking licensed operators to check their suppliers.

“The Commission’s approach to tackling illegal gambling is focused on creating significant upstream disruption. This is why we target entities like internet service providers, payment processors, search engines, software suppliers, and others,” Rhodes said.