Evolution's shares dropped over 10% following news that the UK Gambling Commission (UKGC) is reviewing their license. The decline came after the company admitted its games were accessible through unlicensed operators in the UK.

In a December 20 investor note, Evolution confirmed finding their games on unlicensed sites but stated the issue has been resolved by making these games unavailable to UK players.

CEO Martin Carlesund announced "forceful action" using technical tools to ensure games are only accessible through licensed UK operators. The company maintains its commitment to transparency with regulators.

While the UK represents just 3% of Evolution's revenue, investors worry the review could trigger regulatory actions in other jurisdictions. Analysts at Pareto believe these concerns are excessive and don't expect Evolution to lose its UK license.

The company is currently pursuing a defamation case regarding a 2021 report claiming Evolution operated in black markets, including US-sanctioned countries like Iraq, Sudan, and Syria. The report, submitted to the New Jersey Division of Gaming Enforcement (DGE) by Calcagni & Kanefsky law firm, led to an investigation that cleared Evolution of wrongdoing in February 2024.

Evolution has unsuccessfully petitioned the New Jersey Superior Court to reveal their accuser's identity. In April, a judge ruled that the allegations required further examination before revealing the accuser's identity, balancing attorney-client privilege against the plaintiff's right to information.

The initial DGE investigation announcement resulted in a $3 billion reduction in Evolution's market capitalization, according to the company's lawsuit.

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