The overall market value of a Swedish gaming company has dropped considerably after accusations of illegal gaming were made by a United States law firm. Evolution AB dropped by $3 billion due to allegedly breaking United States sanctions by offering services in Iran and other countries where they should not be operating.
Details of the Complaint
According to sources, the complaint surfaced via a Bloomberg report when details of the complaint went public. A letter was sent last week to the New Jersey Division of Gaming Enforcement by private investigators, whose identity remains a mystery.
The investigators were said to be hired by a competitor of Evolution based in the United States. These individuals recorded gameplay of Evolution services while using online addresses from areas like Hong Kong and Singapore. Online betting is prohibited in these countries.
Evolution denies that the company is taking part in illegal gambling services. Officials say they operate based on laws and regulations of any given region where services are offered. The company says that tools are used to block gaming from certain countries, including within the ones that are listed in the complaint.
The company also pointed out that it does not have control of or own any of the operators that it works with to offer gaming services. Evolution is not connected to the player or their money as well.
The allegation adds that Evolution is allowing unlicensed third-party companies to offer its games in areas like Sweden, Italy, and Spain.
As the news came to light about the illegal operation accusations, it caused a chain reaction, affecting shares and value. At one point, shares dropped 9%, which is a considerable dip. The drop comes not long after Evolution saw a boost of 62%, creating a company valuation of $33 billion.
Evolution does keep its games from countries that are on the sanction list, the complaint draws attention to the company and its operations. Any negative press leads to questions by shareholders as well as regulators, which is never positive.
With this latest complaint, it was sent to regulators in New Jersey. The Division of Gaming Enforcement has the ability to investigate the allegations and prosecute any casino-related crime.
We shall see in the coming weeks if any action is taken against Evolution regarding the accusation. In New Jersey, as well as other states where Evolution operators, regulators expect license holders to have good character and integrity. Operators should not offer services in illegal markets.