In August 2025, Los Angeles identified Nasdaq Stockholm-listed Evolution AB as a defendant in its legal action against Stake.us. This lawsuit could potentially redefine the boundaries of legal responsibility for B2B gambling suppliers, yet Evolution has not made any public statements regarding the case nor has it informed its shareholders about the lawsuit.
Last year, when the Los Angeles City Attorney initiated legal proceedings against the sweepstakes casino Stake.us, it marked a significant shift by also targeting the suppliers involved.
Among the defendants listed in the case is Evolution AB, a prominent Swedish live-casino provider recognized as one of the most valuable companies on the Stockholm stock exchange.
A year later, the case remains ongoing, and Evolution's shareholders have not seen any mention of it in the company's financial disclosures.
A review by Gambling Insider of the complaint, four interim and year-end reports from Evolution, and the transcript from the latest earnings call revealed that the lawsuit has not been acknowledged in any investor communications.
No analysts have raised the issue during earnings discussions. While Evolution has informed investors about a regulatory settlement in the UK and a defamation lawsuit it initiated, it has not addressed the California lawsuit where it is a defendant.
The City Attorney, Hydee Feldstein Soto, filed the case titled People of the State of California v. Sweepsteaks Ltd. (case No. 25STCV25304) in the Los Angeles Superior Court on August 28, 2025, with the legal firm Susman Godfrey.
This lawsuit accuses the defendants of facilitating an illegal online gambling operation, violating California's Unfair Competition Law and False Advertising Law, which are key consumer protection regulations in the state.
The suit seeks to impose an injunction to halt the alleged activities, restitution for affected consumers, and civil penalties of up to $2,500 for each infraction.
The City Attorney has described this as the first case of its kind in the nation.
What makes this case particularly noteworthy is the list of defendants. In addition to the Stake.us operator Sweepsteaks Ltd., its owners Ed Craven and Bijan Tehrani, and the streaming service Kick, the lawsuit also names ten entities associated with Evolution. These include Evolution AB, Evolution US LLC, Evolution Malta Ltd., NetEnt, Nolimit City, Red Tiger, and Big Time Gaming.
Additionally, four entities from Hacksaw Gaming are implicated, with the alleged wrongdoing being “marketing and licensing casino games to Stake.us.” Gambling Insider reported on the filing at that time.
The implications of this case are significant as it could hold content suppliers accountable for the actions of operators. If the court rules that a supplier can be liable for an operator's misconduct, it exposes every B2B supplier working with a disputed operator to potential legal challenges.
In response to the lawsuit, suppliers acted swiftly. Within days, both Evolution and Pragmatic Play announced their exit from the California sweepstakes market.
However, exiting the market does not equate to notifying investors about the ongoing lawsuit. In this regard, Evolution's communication has been notably sparse.
In its third-quarter report for 2025, released on October 23, 2025, Evolution's CEO Martin Carlesund made a vague reference to changing conditions in California but did not specifically mention Stake.us or acknowledge Evolution's status as a defendant. This comment was included in the CEO's remarks rather than in the legal proceedings section of the report.
Subsequent reports have not referenced the case at all. The full-year report for 2025, dated February 5, 2026, states there were “no significant events” after the reporting period and omits any mention of California. The first-quarter report for 2026, published on April 22, 2026, alongside the annual general meeting, also fails to mention the lawsuit, as does the second-quarter report released on July 17, 2026. The legal proceedings note in the latter report only discusses a defamation case Evolution filed against Playtech and a £4.75m ($6.43m) settlement with the UK Gambling Commission.