After the New Jersey Division of Gaming Enforcement (NJDGE) decided not to press charges in the case of misconduct less than a month ago, Evolution Gaming Group is facing another lawsuit.
New lawsuit for Evolution:
Pomerantz, a renowned New York law firm, filed a class action suit against the B2B solution provider because it has allegedly committed securities fraud.
One of the leading live dealer companies in the industry, Evolution, has reportedly been accused of fraudulent activities, including various securities fraud or “other unlawful business practices,” according to the source.
The deadline for submitting the motion is March 25.
According to Pomerantz, various suspicious activities that affected the prices of Evolution’s shares on the market were recorded between February 14, 2019, and October 25, 2023. The law company wants to clarify these claims and make sure all potential wrongdoings are investigated and potentially punished.
Among the documents that awakened the suspicion was a report that was written by Analyst Generation Limited in January 2022, and was available to some investors. According to the source, two key allegations were included in the report – it was expected that the company’s revenue could be at risk because of the regulatory limitations that were expected to be established, as well as that part of Evolution’s revenue might be coming from illegal gambling activities.
The report made a splash in the investors’ circles, so after it was published, Evolution’s American Depositary Shares (ADS) declined by 14,68%.
In October 2023, the provider announced that the opening of its new studios would be delayed, followed by a stagnation in revenue in some sectors during the third quarter. It caused a drop in ADS price by 7.61%.
But that’s not all – Evolution was hit with another lawsuit in January this year when Federman & Sherwood submitted a complaint to the United States District Court for the Eastern District of Pennsylvania. The company was accused of deceiving its investors when it came to it’s expansion and status, which is similar to the accusation Pomerantz has made.
Revenue report:
But despite the lawsuits and all concerns, Evolution keeps growing. Its live casino sector earned €1,07 billionn (£913,5 million/$1,16 billion) net profit in 2023. The revenue was €1,80 billion, which is a growth of 23,5% annually. Live casino generated 84.7% of the total amount, with earnings that reached €1,52 billionn.
Revenue generated from random number generators in 2023 was €275.3 million, which is an increase of 2.6%. However, in the fourth quarter, a decrease of 3.7% was noticed, and the revenue decreased to €69.8 million.
The figures are great, but the company’s Chief Executive Martin Carlesund is reportedly still worried that they won’t be able to keep pace with the market and achieve what the industry requires. To make sure that things will go smoothly, Evolution plans to add new game studios to its network to increase the interest of the public.
Carlesund commented: “We have increased the pace of our studio expansions in the fourth quarter and expect to continue into 2024. We launched a new studio in Bulgaria and have initiated the project to build a second studio in Colombia.”