Redburn Atlantic: Regulatory Probe Endangers Evolution’s Valuation

Leading innovator in product development and advanced IT solutions for online casinos, Evolution, is facing challenges amid a fresh report by Rothschild & Co’s public equities arm, Redburn Atlantic. 

Among other things, the report considers the regulatory scrutiny the company is subject to as a potential risk to its valuation. 

Evolution Taking “Forceful Action Using All Technical Tools Available”

This follows a December 2024 announcement that the UK Gambling Commission (UKGC) had placed Evolution’s license under review, citing the presence of its games on unlicensed websites accessible from Great Britain. 

In response, Evolution removed its games from unregulated platforms in the UK, Sweden, and Romania.

At the time, Evolution’s chief executive operator, Martin Carlesund, expressed the company’s commitment to supporting the UK’s licensed market and preventing unlicensed traffic. 

“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,” he commented. 

Broader Implications 

Redburn’s analysis delves into the broader implications of the UKGC’s review. 

The report argues that regulatory scrutiny is diminishing the role of aggregators in distancing Evolution from unlicensed operators, stating that the UKGC license review “points to the waning value of aggregators to distance Evolution from end operators.” 

The report also highlights Evolution’s significant reliance on unregulated markets, particularly in Asia, while questioning the sustainability of its exposure to both regulated and unregulated markets while remaining publicly listed.

Redburn noted Evolution’s “conditional IP address blocking” as evidence of the company’s control over access to its game servers. 

The report concludes, “Aggregators in the supply chain are becoming less relevant… We expect this to continue as Evolution’s technical reality becomes better understood.”

Evolution Says Claims Are Untrue

The multinational business-to-business product and service provider with an extensive track record of number 1s has rejected claims that it fully controls access to its games, explaining that “several sites may use the same integration without any technical involvement from Evolution,” which can result in longer distribution chains for games.

To add more fuel to the fire, Swedish financial regulator Finansinspektionen has reportedly launched an investigation into the company over an alleged failure to disclose the UKGC review. 

This omission coincided with a 10.1% drop in Evolution’s share price last December.

Finally, Redburn’s report also outlined the global shift toward stricter regulation, with analysts arguing previously unregulated “grey” markets are becoming extinct, with examples like end-player arrests in Japan, POGO shutdowns in the Philippines, and Turkey’s illegal gambling crackdowns. 

In September, Evolution announced it would boost its live casino portfolio by inking an agreement with Arcadia Gaming Solutions.