Evolution Investigation in New Jersey Concludes, No Action Taken

Article ByDavid Weir

February 20, 2024

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Posted in: New Jersey Gambling News, US Casino News, US Gambling News

The New Jersey Division of Gaming Enforcement (NJDGE) has announced it will take no action against live casino provider Evolution. That’s after completing the misconduct investigation it began against the operator in 2021.

An unnamed third party told the regulator that Evolution was allegedly providing its live casino products in unlicensed jurisdictions globally, including in countries on U.S. trade sanctions lists.

The European operator strenuously denied the allegations, suggesting the reporting party had ulterior motives against the business.

Despite the denial, regulators for New Jersey online gambling spent two years investigating the claims.

When the case was announced, Evolution’s share price dropped some 15% in a week. However, two years later, it remains trading at a cool 863% up on 2019.

“The NJDGE found no evidence that Evolution sanctioned, promoted, permitted, or otherwise materially benefited from its content offered by operators in any market that the NJDGE considers a prohibited jurisdiction,” Evolution said in a statement.

The Charges

The allegations against Evolution are serious, as most U.S. gambling markets require licensees to keep their operations of “good character,” as well as adhering to federal laws.

The NJDGE’s source accused Evolution of knowingly having their games available in U.S. sanctioned countries, such as Iran and Syria.

Evolution denied this. It said that it requires that all of its clients it supplies games to are adequately licensed for their relevant markets. In many markets, it is also required to have its own license.

However, sometimes its games are available via aggregators who license casino gaming platforms to others. Although it maintains it does vet its clients, some of these platform providers don’t always look at their clients’ procedures in accordance with Evolution’s standards.

This can lead to casinos that don’t block users from VPNs, or Virtual Private Networks, where users spoof the location of their connection in order to get around blocks or stay private.

Many of the popular VPNs are blocked by casino operators.

Evolution says these smaller operators under its aggregators sometimes don’t follow suit. That is how users from banned countries have used “sophisticated technical manipulation” to access its games.

It says it has since taken proactive steps to fix the issue. But its core belief is that it is not liable for people using tech workarounds to access its product when it specifically has taken steps to stop them.

It seems, after two years of investigation, New Jersey regulators agree with that position.

“Evolution also conducted an internal review, and while concluding that its due diligence and compliance processes were sufficient, Evolution took the opportunity to enhance its processes,” a statement said.

“The NJDGE supports the enhancements that Evolution has made. The enhancements did not relate to any jurisdictional violations.”

Evolution’s Growth

If you invested $10,000 in Evolution in 2019, then known as Evolution Gaming, today that stock would be worth $86,636.

The European developer joined the U.S. markets in 2019 in New Jersey, and now supplies games for online casinos in Michigan, New Jersey, Delaware, Connecticut, Pennsylvania, and West Virginia.

It also has studios in four U.S. states, livestreaming casino games across U.S. markets 24/7. They supply online casinos in Connecticut, New Jersey, Pennsylvania, and West Virginia, with live games streamed from local live dealers in their state.

The only legal online casino state you won’t find Evolution live games in will be the upcoming Rhode Island online casinos market.

The sole licensee in that state, Bally’s, snubbed market-leading Evolution in favor of Stakelogic.

Although Evolution made $200 million in revenue in the U.S. across 2023, that made up a fraction of its $1.456 billion operating revenues for the year.

Its biggest market is in Asia, much of which is supplying games to grey area offshore casinos.

Evolution says that 40% of its business comes from fully regulated markets, although it requires all of its direct clients to have at least one license in one jurisdiction.