Evolution, a Swedish online gaming software provider, saw its shares drop over 10% following news that the UK Gambling Commission (UKGC) was reviewing its license. The stock decline occurred on the last trading day before Christmas, with a slight recovery observed on Friday.

The company acknowledged that its games were accessible to UK players through unlicensed operators, but confirmed these games have since been made unavailable. CEO Martin Carlesund stated that Evolution is implementing technical measures to ensure their games are only available through UK-licensed operators.

While the UK represents just 3% of Evolution's revenue, market analysts at Jeffries noted that investors fear potential regulatory actions in other territories. However, Pareto analysts believe these concerns are exaggerated and don't expect Evolution to lose its UK license.

The company is currently involved in a defamation case regarding a 2021 report claiming Evolution operated in black markets, including US-sanctioned countries like Iraq, Sudan, and Syria. The New Jersey Division of Gaming Enforcement (DGE) investigated these claims and cleared Evolution of wrongdoing in February 2024.

Evolution has filed a lawsuit to reveal the identity of the report's author, which was initially presented by Newark law firm Calcagni & Kanefsky. The case continues as the court balances attorney-client privilege against Evolution's right to pursue civil action. The original DGE investigation reportedly caused a $3 billion reduction in Evolution's market capitalization.

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