Sweden's Evolution launches review after illegal gaming accusation

STOCKHOLM, Nov 24 (Reuters) - Swedish gaming company Evolution AB said on Wednesday it had initiated an internal review after accusations from a U.S. law firm that the maker of online slot machines was operating in countries such as Iran, in violation of U.S. sanctions.

Bloomberg reported this month that private investigators, retained by a U.S.-based competitor of Evolution, had also recorded themselves playing games through internet addresses in Singapore and Hong Kong, where online betting is banned.

A spokesman for Evolution, whose share price has continued to slide after it lost about $3 billion in market value when the accusation was reported, denied the allegation and said at the time it strictly complied with all laws and regulations.

On Wednesday it repeated that it used all tools at its disposal to block play in certain countries, including those on sanctions lists, and suggested "manipulation" of its systems may have been undertaken.

The company has grown rapidly as more people turned to online gambling during the pandemic, with the United States becoming a focus, as more of its regions legalise sports betting.

The complaint via the law firm was made in a letter to the New Jersey Division of Gaming Enforcement (NJDGE) on behalf of the unnamed private investigators, the Bloomberg report on Nov. 17 said. The law firm did not immediately reply to a request for comment on Wednesday.

Evolution said on Wednesday it had reached out to the NJDGE 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 company said in a statement, adding the allegations originated from an anonymous third party with "what appears to be an intention to discredit Evolution".

The company said it had been falsely alleged that its games were accessible directly from countries under U.S. sanctions, adding that it is not the case without sophisticated technical manipulation.

"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," Evolution said.

(Reporting by Helena Soderpalm; Editing by Alison Williams)