The New Jersey Division of Gaming Enforcement has closed its investigation into software developer Evolution, concluding that no evidence could be found to support allegations of misconduct concerning illegal activity in U.S.-sanctioned markets.
The inquiry, initiated after a report in November 2021 by an unidentified firm, scrutinized claims that Evolution’s products were available in countries under U.S. trade sanctions. The allegations had a significant effect on Evolution’s market capitalization.
“The NJDGE found 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,” a press release from Evolution said.
The allegations suggested that Evolution’s products were accessible in sanctioned countries, such as Syria, Iran and Sudan, through sophisticated technical manipulation, including the use of virtual private networks, or VPNs.
Evolution said such access would require deliberate efforts to bypass established geographical location checks, efforts aimed at discrediting the company. Evolution emphasized that it works closely with regulators and its operator partners to block play from sanctioned countries, underscoring the responsibility of its operators to conduct Know Your Customer checks and comply with their respective regulations and licenses.
While the NJDGE’s findings bring a degree of closure to Evolution, the company still faces scrutiny from a class-action lawsuit alleging it deceived investors about its growth trajectory and compliance.
Filed by Federman & Sherwood, the lawsuit covers a period between February 14, 2019, and October 25, 2023, accusing Evolution of making misleading statements regarding its growth potential and compliance with regulatory requirements. Evolution’s CEO, Martin Carlesund, and CFO, Jacob Kaplan, are named defendants in this ongoing legal challenge.
