November 24, 2021 Legal, Technology, Online

Evolution responds to allegations of irregularities


Company’s stock price continues to drop.

Sweden-based Evolution AB on Wednesday released a lengthy statement addressing allegations of irregularities, including that it operated in markets under US sanctions.

The company offers video feeds of games such as blackjack and roulette, in which players can participate remotely.

As reported last week by Gaming America’s sister publication, Gambling Insider, an attorney in New Jersey sent a letter to the New Jersey Division of Gaming Enforcement (NJDGE) with several allegations.

In response, Evolution on Wednesday said has “received questions with regards to reports of allegations of irregularities.”

“Those allegations originate from an anonymous third party with what appears to be an intention to discredit Evolution,” the company said in a statement it noted “aims to clarify the fundamentals of Evolution's business model, responsibilities and way of operating.”

According to the company, Evolution innovates, develops and produces content for online casinos on a B2B basis. Evolution said it supplies services to licensed B2C casino operators and B2B aggregators.

“Evolution performs full due diligence of the operators or aggregators that the company has contracts with and requires counterparties to hold a valid license,” the statement said. “In many jurisdictions, suppliers such as Evolution also need a B2B license to be allowed to supply content to the licensed operators. Evolution holds B2B-licenses in over 20 jurisdictions.”

Evolution asserted it does not handle any players or any of the players' money. Instead, the company provides a service to an operator, which in turn provides its services to the players.

According to Evolution, it is each operator’s responsibility to conduct a KYC on each player and decide what markets to focus on and what players to accept.

“It is the operator's responsibility to comply with their regulation and their license,” Evolution wrote. “This is the same structure as for land-based casinos. The supplier of a cabinet on a gaming floor is not responsible for who enters the casino and plays on that cabinet. Consequently, the supplier of the cabinet is not responsible for the KYC of the player and does not handle the player's money. The same principle applies in the online casino market. The control of who plays the game is a strict responsibility of the operator.”

Evolution added despite its assertion that operators hold responsibility, the company works closely with regulators and operators in an “ever-changing online environment” to “support and provide tools” for operators, to address and manage their markets according to their license and regulatory framework.

The company argued there are “frequent changes” implemented from the regulators that affect both services supplied by Evolution, as well as interaction with operators.

“It is important to point out that Evolution does not own or control any of the operators or aggregators the company works with,” the statement said. “Thus, Evolution does not control which players the operators allow to play. It is equally important to point out that Evolution uses tools at its disposal to block play from certain countries, including countries on sanction lists.”

‘False’ allegations

According to the company, allegations that Evolution games are accessible directly from countries under US sanctions are “false.”

“This is not the case without sophisticated technical manipulation,” Evolution asserted. “According to allegations made in the anonymous and dubious report, active manipulation of Evolution's systems has been deployed to create the impression that play from such countries was possible.”

The company went on to say the alleged use of Evolution's content was made through an operator that was not an Evolution customer but connected to an aggregator that Evolution has as a customer. Further, it seemingly was conducted by first establishing a VPN-tunnel from an IP-address in a blocked country to obtain an IP address in an accepted country.

From this IP-address a connection through the operator to Evolution's lobby was made, the company said, clearing all geographical IP checks, and a session was established with the browser, the company explained. Thereafter, Evolution said the VPN from the accepted IP address was terminated, while the content session remained active in the browser. The first IP address from the blocked country remains active. Prior to those steps, multiple attempts to connect directly from the IP address in the blocked country were rejected.

Per the statement from Evolution: “This is a deliberate course of action to circumvent a broadly accepted and well-established process to check users' geographical location, with the purpose of discrediting Evolution.”

Alleged incident under investigation

Evolution went on to say it “constantly works to be better” and any suspected irregularities from laws or regulations that apply to Evolution are “carefully investigated,” with the objective to “continuously improve” its operations both when it comes to security for players, compliance with regulatory frameworks as well as supporting operators with their compliance.

In response to the current allegations, Evolution said it proactively reached out to the New Jersey Division of Gaming Enforcement as part of its standard procedure in its relations with regulators.

“An internal review has been initiated to ensure a swift response to any questions from the NJDGE,” the statement concluded.

Evolution noted it would be hosting an investor call on November 24. The company’s stock price had been $167.33 on November 16, but on November 24 it was $133.88.

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