Evolution Wins Legal Battle Over Allegations of Operating in Unregulated Markets

Quick Intro

In January 2024, the New Jersey Division of Gaming Enforcement (DGE) concluded its thorough investigation into Evolution, a Sweden-based leading provider of live dealer table games for iGaming platforms globally. The inquiry was initiated following allegations made in a November 2021 lawsuit filed in New Jersey, which accused Evolution of allowing its B2B products to be accessible in several countries under U.S. sanctions, including Sudan, Syria, and Iraq

Investigation Findings

The DGE’s meticulous review found that Evolution did not violate any regulatory standards. According to a statement from Evolution, the investigation revealed no evidence of the company sanctioning, endorsing, or profiting materially from its content being offered in any jurisdiction deemed prohibited by the New Jersey DGE.

In response to the investigation, Evolution undertook an internal review of its due diligence and compliance procedures. While finding these processes to be adequate, Evolution nonetheless seized the opportunity to strengthen them further. These enhancements, which have received support from the New Jersey DGE, were not related to violations of jurisdiction but were aimed at bolstering the company’s compliance framework.

Background of the Complaint

The lawsuit against Evolution was initiated by a Newark-based law firm, Calcagni & Kanefsky, representing an unnamed group. The firm, known for its expertise in white-collar crime, claimed to have employed private investigators who managed to access Evolution’s gaming products in the sanctioned countries, challenging the company’s compliance with U.S. sanctions and its customer verification processes.

Evolution’s stance has been clear; as a B2B supplier, it maintains that the onus of player verification and market selection rests squarely with the operators. The company emphasized the operators’ responsibility to adhere to their regulatory obligations and licensing requirements.

Outcome for Evolution

The DGE’s investigation effectively clears Evolution of the allegations, affirming the company’s compliance with regulatory standards. A contrary outcome could have raised significant concerns regarding Evolution’s suitability to maintain its gaming license in New Jersey and potentially other regulated markets in the U.S. gaming industry.

Evolution refuted the claims of servicing online gaming entities in U.S.-sanctioned countries, suggesting that the private investigators might have employed advanced techniques like VPNs to obscure their actual locations, thereby accessing Evolution’s live dealer games from prohibited jurisdictions.

This resolution not only vindicates Evolution’s regulatory standing but also underscores the importance of robust compliance and due diligence processes within the iGaming industry. Evolution’s proactive steps to enhance its compliance measures, in light of the investigation, reflect its commitment to upholding the highest standards of integrity and security in its operations.