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Evolution’s share price crashed 9.9% on Friday after an X post confirmed an upcoming report on the company’s APAC activities.

Investment research firm In Practise is planning to release a written piece of research investigating Evolution’s operations in the Asian-Pacific region, it confirmed last week.

News of the report wiped $2.74bn in value from the business’ market cap on Friday, as its share price fell 9.9% to SEK1,237.40 ($116.97) from SEK1,372.80. The price has since recovered to SEK1,279.20.

The New Jersey Division of Gaming Enforcement (NJDGE) last month said there was “no evidence” to substantiate claims that Evolution sanctioned, promoted or benefited from content offered by operators prohibited under New Jersey regulations.

“In Asia, the prevalence of unlicensed operators that collectively control a significant portion of the market changes how EVO approaches distribution,” alleged In Practise.

“This determines the B2B aggregation mix in the region relative to Europe and the underlying profitability and bargaining power across the value chain.”

In Practise claims to have interviewed a former executive at Evolution’s Ezugi subsidiary, who made claims about the live dealer supplier’s operations in the region.

“[T]here are many completely unlicensed operators who do not care about obtaining a licence,” said a former business development director as quoted in the report.  

“They continue their operations regardless. These operators can often be quite large, but Evolution cannot engage with them due to their lack of licence.

“However, if they sign with a licensed aggregator and use the reseller model, they can claim ignorance about where the games end up.”

Evolution regulatory exposure examined in courts

The upcoming report will be released as Evolution faces several class action lawsuits that allege the business concealed its level of regulatory risk from investors.

Miami law firm Levine Kellogg Lehman Schneider + Grossman (LKLSG) published a press release on Saturday advertising for lead plaintiffs in an upcoming securities class action.

The suit alleges Evolution products were made available to unlicensed companies in prohibited jurisdictions, allegations the provider has, and continues to, strenuously deny.

“We do not sell our product to operators without a licence,” an Evolution spokesperson told NEXT.io.

“Evolution supplies both licensed B2C casino operators, which then supply the games to players, and licensed B2B-actors, which then supply the games to B2C licensed operators, which in turn offer them to players.

“Evolution demands all B2B operators to perform a robust KYC on their B2C customers (our sublicensees) and Evolution performs an abridged due diligence on those sublicensees before approving them.”

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