Evolution is under fire and may face a legal battle due to allegation that the company has allegedly been accepting illegal wagers. (Photo by August de Richelieu on Pexels)
A recent lawsuit alleges that Evolution, an online gambling company, was not transparent with investors about potential legal and regulatory risks.
The suit covers the period between February 14, 2019, to October 26, 2023. It aims to recover money for investors who lost money after buying Evolution shares during this period.
The current Evolution share prices are shown via our latest iGaming stock update. The company is down -2.09% on its 2024 Market Open of 1,217.40 SEK but closed at 1,217.80 SEK yesterday (25 Jan 2024), only slightly down. Despite the current investor dispute outlined in this news piece, the gambling firm’s share price is up 15.93% on its 2023 market opening of 1,050.50 SEK. However, will the latest dispute harm the current share price?
Evolution Questioned Over Following Rules
Over the past few years, Evolution faced growing questions about whether it was following all applicable laws and regulations in the various countries where it operates. In November 2021, Evolution was accused of doing business illegally in several markets. This news led to a large drop in the company’s share price. A January 2022 analyst report suggested Evolution could lose a lot of revenue if regulators cracked down on it.
Evolution is one of the most popular live casino game providers in the iGaming industry. The company has also won numerous awards for its B2B gaming supply excellence and for creating engaging and fresh live dealer titles. In fact, if you check out our live casinos guide, you will see that almost every online casino listed has Evolution. Even on casinos not reviewed here Livecasinocentral, you will nearly always find Evolution games. The brand is basically the most widespread game provider across the globe. On top of this, NetEnt, Red Tiger, Big Time Gaming, and Nolimit City are Evolution companies supplying online slots.
With its renowned fame on the iGaming circuit, it comes as a surprise that a popular brand amongst players has come under fire.
Are Evolution games fair? The lawsuit is not about the integrity of Evolution Gaming games. There are strict laws that govern each Evolution live casino studio and the RNGs used for its online slots making it impossible to cheat. The issue at hand is rather the market Evolution games are being found. For example, online gambling is illegal in many Southeast Asian countries, yet Evolution games continue to be available to players at illegal online casinos in these countries.
Lawsuit Claims Evolution Hid Truth
The recent lawsuit was filed by a specialist legal firm called Federman & Sherwood. It alleges Evolution violated securities laws by hiding the truth about legal and growth issues. Specifically, it claims Evolution made false statements between January 2022 and October 2023. The suit argues that various disclosures during this period revealed problems about legal compliance, revenue and growth that Evolution allegedly concealed earlier. This new information led to a sharp drop in Evolution’s share price.
The lawsuit names Evolution’s CEO and CFO as defendants. If Evolution is found to have covered up growing regulatory and compliance problems, it could face serious long-term consequences. Evolution has not yet responded to the allegations. The court will likely schedule a hearing soon. Investors have until March 26, 2024 to join the lawsuit. The legal pressure highlights the challenges Evolution faces in maintaining legal compliance across different countries. And the damage to its finances and shareholder value could lead to more scrutiny of the broader online gambling industry.
Not the first time Evolution has come under fire: In 2021, an anonymous law firm reported Evolution for breaching US laws by allowing illegal wagers on its games in countries where online gambling is illegal. One report was issued by Bloomberg – Lawyer Alleges Illegal Wagers.
Other events also hurt investor confidence in Evolution
- Australia sought to block unlicensed gambling sites, including 5 Evolution partners
- A Swedish court upheld a big fine against an Evolution customer
- Concerns that new UK gambling laws could hurt profits
- Evolution’s financial reports also showed weak growth, further worrying investors. Delays in opening new studios raised more doubts about the future.
What is the Livecasinocentral’s Team Verdict
We know there have been rumours about the Evolution games appearing in global markets where online gambling is illegal. Evolution has always said that as a B2B supplier, the company often supplies games to aggregator platforms. These companies offer Evolution games to online gambling platforms that fill their live casino lobbies Evolution games. If these aggregators do this, Evolution may feel it has no control and is not responsible for this happening. From our point of view, yes, that is one argument.
Evolution can stop its games from being played in countries where online gambling is illegal!
Now, there is a counterargument here. I like Evolution so that I could be biased. I am a massive fan of Monopoly Live, Double Ball Roulette, and Free Bets Blackjack. Yet, I must say that Evolution can stop its games from appearing in markets where online gambling is illegal. Here’s where I really nail hammer into the brand, which I hate to do.
- Ontario iGaming Market: Evolution can and does follow the iGaming Ontario rules, whereby any gambling platforms operating under the Kahnawake Gaming Commission (KGC), Curacao, or Malta Gaming Authority (MGA) licensing platforms cannot offer Evolution games to players in Ontario. Why can’t Evolution apply the same rule globally? Now, MGA, KGC, and Curacao online casinos are available to players in Ontario, and there is no law against this under the Alcohol and Gaming Commission of Ontario (AGCO). Yet, if Evolution games were found to be available to players in the Candian province, Evolution would have its licensing banned. Therefore, the company has successfully blocked Ontario IPs from accessing their games in Ontario. FYI – All this information is available on our Canadian live casino hub for those who want to investigate it further.
Why can’t Evolution do the same as it does in Ontario on a global scale? I don’t have the answer. It is the million-dollar question. I can only speculate and say that the company doesn’t because it earns so much revenue from these regions. Yet, that is just conjecture. I am sure after a legal dispute, and a possible drop in share price value, the company will need to reshape itself.
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