Sweden’s Evolution loses $3 billion of market value on illegal gaming accusation

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STOCKHOLM (Businesshala) – Swedish gaming company Evolution AB lost nearly $3 billion in market value on Wednesday after a US law firm accused it of operating in countries like Iran in violation of US sanctions.

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Makers of online slot machines and roulette games have grown rapidly as more people turn to online gambling during the pandemic, with the United States becoming a focus, as more of its regions legalize sports betting.

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The complaint was filed last week in a letter to the New Jersey Division of Gaming Enforcement on behalf of unnamed private investigators, Businesshala reported. Here,

The law firm, Calcagni & Kanefsky LLP, did not respond to requests for comment outside business hours.

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Businesshala reports that investigators created by a US-based competitor of Evolution recorded themselves playing the game via Internet addresses in Singapore and Hong Kong, where online betting is banned.

A spokesperson for Evolution denied the allegation, saying it strictly adheres to all applicable laws and regulations.

“We use all the tools at our disposal to block play from certain countries, including all countries on the sanctions list mentioned in the article,” he said.

He added that Evolution does not own or control any operator it works with and has no direct relationship to the underlying player and is involved in handling players’ money.

Shares of the company were down 9% in morning trading, after a 62% jump this year for a valuation of $33 billion.

Pareto Securities analyst Marlon Warnick said, while Evolution puts its game on the sanction list from countries, the complaint raises questions and could attract more attention from regulators, which is not positive.

The New Jersey Department of Enforcement, to which the complaint was made, is the investigative arm of the casino regulatory system and prosecutes all offenses related to casinos.

Reporting by Supanth Mukherjee and Bolesaw Lassoki; Editing by Clarence Fernandez

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