One of the largest iGaming firms in the industry is to have their UK licence ‘reviewed’ by the Gambling Commission over allegations that they are operating in illegal black markets.
Evolution, a global conglomerate with an annual revenue in the region of £1.5 billion, could – sensationally – be banned from operating on UK soil pending the regulator’s investigation.
And that would be one of the most significant legal acts in the history of the UK gambling industry.
Under the Microscope
Evolution Gaming is a global gambling sector heavyweight.
They have been developing slots and table games themselves for decades, but through an aggressive strategy of mergers and acquisitions have been able to grow in stature by buying out other successful operators.
The likes of NetEnt, Red Tiger, Ezugi and Big Time Gaming have all been acquired by Evolution, which has helped to facilitate their worldwide growth and industry stranglehold.
And a handful of billionaires – including the reclusive entrepreneur Kenneth Dart – have been persuaded to invest in the multi-national corporation.
However, the UK remains one of their biggest markets… and that future could be in peril if the Gambling Commission decides that their alleged activities in black markets are a breach of their licence conditions.
The crux of the investigation will be determining why Evolution’s games library is currently available to play on a number of illegal casino sites available to UK players. That is a potential trigger for Section 116 of the Gambling Act, which affords the regulator the opportunity to undertake a review when it ‘suspects that conditions of a licence have been or are being breached.’
Their powers include the ability to strip an operator of their licence where a ‘condition of the licence has been breached’, or where ‘licensed activity is being or has been carried on in a manner which is inconsistent with the licensing objectives.’
After news of the probe was revealed, Evolution’s games vanished from the libraries of the black market operators in question.
Rather than hiding behind an anonymous spokesperson, the Evolution CEO – Martin Carlesund – has confirmed that his company is assisting the Gambling Commission with their investigation.
“Evolution embraces the objectives of the review by the Commission. We are committed to support the licensed UK market as well as preventing unlicensed traffic,” he said.
“We are now taking forceful action using all technical tools available to us to ensure that our games only are available in the UK through Commission licensed operators. We believe that a close collaboration to address our joint concerns will lead to swifter and better results. As always, we remain committed to an open and transparent relationship with our regulators.”
The question, perhaps, will be how much knowledge Evolution had of their content being made available by illegal operators, and how long it took them to take action.
And that will ultimately determine the punishment – if any – metered out by the Gambling Commission, whose available sanctions range from the token effort all the way through to significant action.
Taking Action
The regulator could decide to simply issue a warning to Evolution, if they believe their games were unknowingly made available by black market operators, all the way through to hefty fines and/or the revocation of their licence, if they believe the operator was complicit in some way.
A financial punishment would be of little consequence to Evolution, given the scale of their yearly profitability, but the suspension or revocation of their licence would be a considerable stance from the Gambling Commission… and cost Evolution around 5% of their annual revenue.
They can’t say they weren’t warned, either. As recently as November, Gambling Commission CEO Andrew Rhodes encouraged licensed operators to ensure they weren’t supporting ‘illegal activity’ – if they were, they would be forced to face the consequences.
No wonder shareholders and investors have become twitchy. As news of the investigation broke, Evolution’s share price tumbled by a staggering 10% in one day, wiping millions off their stock market value.
That share price has since rallied somewhat, although that’s in-line with overall market index gains over the festive period.
There could be worse to come, too. Josimar Football, an independent investigator into the sport’s links with the gambling industry, has alleged that Evolution are ‘making a fortune’ from illegal activity, particularly in the Asian market.
They have claimed that the firm has working partnerships with operators that have links to ‘human trafficking, money laundering and cyber slavery’, with a number of these Asia-based outfits operating on European soil… and promoting their services via sponsorships with Premier League football teams.