Playtech shares tumble after firm becomes embroiled in US lawsuit
Shares in Playtech tumbled on Tuesday after it emerged the gambling software firm had become embroiled in a US defamation lawsuit.
The FTSE 250 firm has been named as the company behind a 2021 investigative report which made a string of misconduct allegations against its Swedish rival, Evolution.
Playtech is understood to have commissioned Israeli private intelligence agency Black Cube to produce the report, for which it paid a fee of £1.8m.
The report was determined by two state regulators in the US to be lacking in evidentiary support.
Evolution has begun a defamation claim against Black Cube, to which Playtech has now been added.
Playtech’s shares finished the day down 21 per cent to 270p. The stock has fallen by nearly two-thirds since the start of the year.
‘Deeply disturbing’
“It is deeply disturbing to learn that one of our competitors has gone to such extraordinary lengths to damage our business and reputation by hiring Black Cube…to fabricate a report they knew would have extremely harmful repercussions,” Evolution said, describing the report as a “smear campaign”.
“Notwithstanding those findings, dissemination of the report has resulted in multi-billion dollar damage to our company.”
In a statement, Playtech said it “stands by the decision to commission the report,” adding it “welcomes court examination of the report and its findings.”
“Evolution continues to seek to avoid legitimate scrutiny rather than address longstanding questions about its conduct,” Playtech said.
“The report published, as a result of the investigation, clearly evidences that Evolution’s business practices undermine lawful and compliant gambling operations. Such conduct damages trust in the credibility of the entire industry and also ultimately impacts government tax collection.”
Black Cube said: “Black Cube proudly submitted its findings in coordination with its client. The case now enters its decisive stage – where years of Black Cube’s intelligence work will finally be brought to light and thoroughly examined.”
It marks the second time this year Playtech’s shares took a huge hit after the stock tanked in May following a special dividend payout.