Shares in Playtech plummeted on Tuesday following news that the gambling software company has become entangled in a US defamation lawsuit.
The FTSE 250 firm is identified as the entity behind a 2021 investigative report which levelled numerous misconduct allegations against its Swedish competitor, Evolution, as reported by .
It's understood that Playtech commissioned Israeli private intelligence agency Black Cube to compile the report, for which it paid a fee of £1.8m.
Two state regulators in the US have deemed the report to be lacking in evidentiary support.
Evolution has initiated a defamation claim against Black Cube, and Playtech has now been included in this.
Playtech's shares ended the day down 21 per cent at 270p. The stock has dropped by nearly two-thirds since the beginning 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," said Evolution, labelling the report as a "smear campaign".
"Notwithstanding those findings, dissemination of the report has resulted in multi-billion dollar damage to our company."
In response, Playtech stated it "stands by the decision to commission the report," and added it "welcomes court examination of the report and its findings."
Playtech stated: "Evolution continues to seek to avoid legitimate scrutiny rather than address longstanding questions about its conduct," and "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 commented: "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."
This marks the second instance this year where Playtech's shares have suffered a significant blow, following a steep drop in May after a special dividend payout.
