Evolution Cleared in Lawsuit Alleging Firm Operates in Black Markets

Posted on: February 21, 2024, 07:44h. 

Last updated on: February 21, 2024, 10:20h.

Evolution announced Tuesday that the New Jersey Division of Gaming Enforcement (DGE) recently wrapped its investigation into the Sweden-based business-to-business iGaming operator. It found no regulatory breaches.

Evolution live dealer lawsuit New Jersey
An Evolution live dealer studio. The iGaming business-to-business operator has been cleared in a 2021 lawsuit filed in New Jersey alleging it did business in countries like Sudan, Syria, and Iraq. (Image: Evolution)

Evolution is a leading provider of live dealer table game services for iGaming platforms in the U.S. and around the world. A November 2021 lawsuit filed in New Jersey alleged that Evolution allowed its B2B products to be used in numerous countries currently subject to U.S. sanctions, including Sudan, Syria, and Iraq.

In a brief release, Evolution said investigators with the New Jersey DGE, a state agency under the scope of the state attorney general’s office, found no compliance violations.

The New Jersey DGE found no evidence that Evolution sanctioned, promoted, permitted, or otherwise materially benefitted from its content offered by operators in any market that the New Jersey DGE considers a prohibited jurisdiction,” an Evolution statement read.

“Evolution also conducted an internal review, while concluding that its due diligence and compliance processes were sufficient, Evolution took the opportunity to enhance its processes. The New Jersey DGE supports the enhancements that Evolution has made. The enhancements did not relate to any jurisdictional violations,” the release added.

The New Jersey DGE said the matter “is closed” and requires no further action.

Case History

The Evolution complaint was filed by Newark-based law firm Calcagni & Kanefsky on behalf of an anonymous group. The law firm — which specializes in white-collar crime — alleged in the litigation that the group had hired private investigators. Those operatives flew around the world and were able to access Evolution gaming products in sanctioned countries.

The plaintiffs claimed not to be a direct competitor of Evolution. A communications person for the group told Casino.org that the party “is a U.S.-based interest group” and not an Evolution competitor, as reported by Bloomberg.

When pressed for clarification, the communications person provided no details on why the lawsuit was filed or the goal of the litigation. He did send a copy of the 120-page Evolution report from the group’s private investigators that made a slew of allegations. Those included that Evolution failed to know its customers and enabled “a myriad of illegal activities, as well as regulatory and contractual violations.”

Evolution Cleared

New Jersey’s investigators determined that the report sent to Casino.org and submitted to the DGE was factually inept. A different finding could have been detrimental to Evolution.  Operating in countries like Sudan, Syria, and Iraq likely would have raised suitability concerns for the company to hold a gaming license in New Jersey and elsewhere in the highly regulated U.S. gaming industry.

In responding to the lawsuit, Evolution said as a B2B supplier, “The control of who plays the game is a strict responsibility of the operator.”

It is the operator’s responsibility to conduct a KYC (Know Your Customer) on each player and decide what markets to focus on and what players to accept,” the company said. “It is the operator’s responsibility to comply with their regulation and their license.”

Evolution also denied lending its services to online gaming companies in countries sanctioned by the U.S. Attorneys for the company said the private investigators likely used “sophisticated technical manipulation,” such as virtual private networks (VPNs), to conceal the true identity of their physical location to access Evolution’s live dealer games on the internet from sanctioned countries.