The UK Gambling Commission (UKGC) has launched a formal review of Evolution Malta Holding Limited's operating license. The action follows allegations that Evolution’s games were accessible via operators without UKGC licensing, in violation of regulatory guidelines. Evolution, a leading global provider of live dealer and online casino solutions, has confirmed it is fully cooperating with the Commission and has already taken corrective measures.
The review, initiated under Section 116 of the Gambling Act 2005, comes as part of the Commission’s efforts to curb unlicensed gambling activity. Evolution stated it promptly removed its games from the unlicensed websites in question and is working closely with the UKGC to address the situation.
Potential Implications for Evolution
Depending on the findings, the review may lead to a variety of outcomes, ranging from no action to more severe measures such as financial penalties or the suspension or revocation of Evolution’s UK operating license. This situation places Evolution in a precarious position during the festive season.
Although the UK accounts for approximately 3% of Evolution’s global revenue, the company’s CEO, Martin Carlesund, has reaffirmed Evolution’s commitment to the licensed UK market and its dedication to regulatory compliance. "We are now taking forceful action using all technical tools available to us to ensure that our games are only available in the UK through Commission-licensed operators," Carlesund said. He also emphasized the importance of maintaining transparency and a collaborative approach with regulators.
Broader Regulatory Context
This incident arises amidst increasing pressure from the UKGC for operators to monitor their suppliers rigorously. In November, Andrew Rhodes, CEO of the UKGC, urged operators to conduct due diligence on their business partners to avoid inadvertently supporting unlicensed sites. However, industry stakeholders argue that monitoring the activities of B2B suppliers is a challenging task that requires more proactive enforcement by regulators.
The review also follows media scrutiny of Evolution’s activities in other markets. Reports, including one from Josimar, alleged that some Asia-based operators using Evolution’s games provide services to unlicensed operators across Europe. This raises broader compliance questions for the company, especially as Asia constitutes roughly 40% of its revenue. The company's Q3 earnings also revealed a decline in the percentage of revenue from regulated markets, down to 39% from 40% in 2023.
Industry experts, such as Regulus Partners, have noted the potential risks for companies operating in unregulated markets. In its Q3 analysis, Regulus warned of the challenges associated with unchecked growth in such regions, stating, "Being on the wrong side of ‘unregulated’ markets in Asia can be a painful experience."
Evolution's Next Steps
Evolution has a strong track record of licensing across jurisdictions, including the UK, Malta, and Canada, among others. The company is leveraging its technical capabilities to ensure that its games are accessible only through regulated operators. While the UKGC review presents immediate challenges, Evolution’s swift action and collaboration with regulators may mitigate the risk of severe penalties.
As the investigation progresses, the gaming industry will closely watch the outcomes, which could influence regulatory practices and supplier relationships across the sector.
Source:
Evolution faces Gambling Commission review over black market activity, igamingbusiness.com, December 20, 2024.
