A Clean Fold
When California says “no deal,” even industry giants listen.
Swedish gaming powerhouse Evolution is known for playing its cards right, but this time, it’s folding early and calling it quits.
CEO Martin Carlesund told investors last week that the company is taking a “prudent approach” to its sweepstakes operations in the United States, refusing to offer products in any state with regulatory uncertainty.
“Sweepstakes is a popular product in the U.S., and we offer it in states where it’s not prohibited or under scrutiny,” Carlesund said during the company’s Q3 2025 earnings call. “If there would be a letter from a regulator or an authority stating ‘don’t do it here,’ we would immediately go away. Simple as that.”
In a market where most operators are still testing the limits of what’s legal, Evolution seems content to stay on the sidelines, and out of trouble.
How We Got Here
Sweepstakes gaming has always lived in a gray zone. Some states tolerate it, others regulate it, and a growing number are trying to shut it down altogether.
That tension came to a head in California, where lawmakers passed AB 831, a new law banning online sweepstakes gaming. Governor Gavin Newsom signed it in October, and it kicks in January 1, 2025.
For operators and suppliers, California’s move sent a blunt message: the era of “social casino loopholes” may be closing.
California Leavin’
Evolution’s retreat from California wasn’t a bold statement, it was self-preservation.
In August, Los Angeles City Attorney Hydee Feldstein Soto filed a lawsuit against Stake.US, alleging the sweepstakes casino operated as an illegal gambling site. Evolution and several of its studios were named as co-defendants for providing game content.
Within days, Evolution pulled its titles from Stake.us, sticking to its zero-tolerance policy for regulatory gray zones.
“As our strategy is that we don’t offer sweepstakes where there are regulatory uncertainties, we pulled it from the market,” Carlesund said. “Simple as that.”
The timing couldn’t have been better. A few weeks later, California’s AB 831 became law, banning sweepstakes altogether, confirming Evolution had read the room correctly.
A Small Slice, Big Signal
Carlesund was quick to note that sweepstakes represents only a “very small part” of Evolution’s overall business. But even small bets can carry symbolic weight.
The move says more about Evolution’s priorities than its profits: it’s a company that would rather walk away from potential earnings than risk a regulatory fight that could tarnish its reputation.
That kind of caution doesn’t just protect Evolution, it sets a tone. When a market leader refuses to touch gray areas, smaller studios and content partners tend to think twice before pushing the line.
Meanwhile, a Different Kind of Battle
The same earnings call took a sharp turn when questions arose about Evolution’s ongoing feud with Playtech.
Earlier this week, it came to light that Playtech had hired private intelligence firm Black Cube to produce a report accusing Evolution of offering its games in countries where online gambling is banned. Evolution called the report false and damaging, and said it now plans to add Playtech to its existing defamation lawsuit against Black Cube.
“Someone is hiding between layers of companies… writing a number of false statements,” Carlesund said. “It takes a bit away from my belief in humanity and fair play.”
It was a telling moment. Even under legal fire, the CEO’s core message was the same: Evolution plays by the book, and expects others to do the same.
The Industry Read-Through
For the sweepstakes world, Evolution’s move feels like a warning shot.
When one of the biggest suppliers in gaming decides to step back instead of push forward, it changes the tone for everyone else. Operators now see what happens when a heavyweight chooses compliance over confrontation, and smaller players might think twice before testing the line.
Regulators will likely see Evolution’s cooperation as proof their approach is working. And for players, the shift could mean fewer gray-market sites and more clearly defined “social casino” experiences.
One thing’s clear: the Wild West days of sweepstakes are fading fast.
What Comes Next
For now, Evolution plans to keep its sweepstakes content limited to states with clear rules and open lines of communication with regulators. The focus is on staying compliant, not pushing boundaries.
As more states look at laws similar to California’s AB 831, the sweepstakes market could tighten, leaving fewer but more transparent operators in play.
That might mean fewer flashy promos and risky business models, but it also points to a steadier, more sustainable future for social gaming in the U.S.
The Bottom Line
Evolution isn’t bluffing, it’s playing the long game. By walking away from California, the company made its priorities clear: stay clean, stay steady, and stay out of court.
In a business built on risk and reward, Evolution’s decision to fold early might just be its smartest move yet.
Blaise Luis
