Calcagni Report Whodunnit – Latest Developments

It’s November 2021. Ralph Marra, senior legal counsel with the firm Calcagni & Kanefsky files a complaint with the New Jersey Division of Gaming Enforcement (“NJDGE”) alleging Evolution had been operating in black markets.

Included in the complaint is a report compiled by private investigators detailing how they were able to access Evolution’s live games playing various online casinos from a number of black market countries, including some subject to US sanctions ( Sudan, Syria and Iraq are named).

The investigators were hired by an unnamed client. The report has since come to be known as the Calcagni Report (“the report”).

When news of the report dropped on Bloomberg it caused quite a stir. Not least among Evolution shareholders. The company’s share price cratered over 35% on the news, wiping more than $10 billion off Evo’s market cap at the time.

Evolution went into damage control with a press release on 24 November 2021, strongly denying any wrongdoing and claiming they were the target of a stitch up. An excerpt from that release reads as follows:

“It has been falsely alleged that Evolution games are accessible directly from countries under US sanctions. This is not the case without sophisticated technical manipulation. According to allegations made in the anonymous and dubious report, active manipulation of Evolution’s systems has been deployed to create the impression that play from such countries was possible”

They also clarified that while all available tools at their disposal are used to block play from certain countries, control over which players an operator accepts, rests largely with the operator (or their aggregator, eg EveryMatrix).

Nonetheless, the NJDGE launched an investigation into the issue. As did regulators in Pennsylvania where Evolution also holds a provider license and operates a live dealer studio.

Meanwhile, Evolution launched defamation proceedings in the Superior Court of New Jersey against Calcagni & Kanefsky, the investigators who compiled the report and the mystery party commissioning the report. Evolution sought compensatory and punitive damages – a figure that could run into the billions given the quantum of market cap losses caused by the report, should they win.

The court ordered that the identity of the mystery party be revealed.  Then came a few rounds of legal ping-pong beginning with the defendants successfully appealing this decision to The Appellate Court. In January this year the Appellate Court then referred the matter back to a lower court, but not before noting that the report’s veracity could be better assessed following the outcome of the NJDGE investigation.

This came in February with the NJDGE closing the matter and finding, ‘no evidence that Evolution sanctioned, promoted, permitted, or otherwise materially benefitted from its content offered by operators in any market that the NJDGE considers a prohibited jurisdiction‘. The Pennsylvania Gaming Control Board had also reached a nothing-to-see-here conclusion.

Now the matter is back before the Superior Court with Judge John C. Porto presiding. Notwithstanding the NJDGE’s conclusion, he’s wanting to see more evidence including the completion of key depositions before handing down a ruling. The defendant’s are scrambling with delaying tactics. Evolution are out for blood but as yet unsuccessful in having the mystery defendant unmasked. The online gambling industry is watching with keen interest.

The question remains, who’s behind the Calcagni Report?

A rival B2B online casino games provider? A hedge fund looking to make a killing shorting Evo stock?

Word on the street is that it’s the former. If this is the case, it’s not a long list of suspects.

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