(Bloomberg) -- Online gambling giant Evolution AB is accused by an anonymous competitor of operating illegally in some markets and doing business in countries that are under U.S. sanctions.

Ralph Marra, a senior counsel at Calcagni & Kanefsky LLP, made the complaint in a letter Nov. 12 to the New Jersey Division of Gaming Enforcement, a copy of which was provided to Bloomberg News. Marra said he was writing on behalf of private investigators he didn’t name. The investigators were retained by a competitor of Evolution, according to people with knowledge of the matter who asked not to be identified.

Evolution, based in Stockholm, has been a hot stock, with a market value of more than $35 billion. The company specializes in live gambling, providing video feeds of games such as blackjack and roulette, with real dealers. Evolution offers the feeds to a number of independent online casino operators, including some of the biggest names in the business. Players win and lose real money, just like in casinos.

Carl Linton, the head of investor relations at Evolution, said in an email that the assertions weren’t accurate, although the company hadn’t seen the letter.

“Evolution strictly complies with all applicable laws and regulations,” Linton said.

Evolution is licensed in New Jersey, an early adopter of online betting. Regulators require licensees to demonstrate “good character, honesty, and integrity,” including not operating in so-called black markets, according to Marra’s letter. A spokesman for the gaming division declined to comment, citing ongoing policy not to do so in such matters.

The private investigators were able to access and play Evolution’s games from Iran, a country that’s subject to U.S. sanctions, according to the letter. An Evolution executive allegedly told one of the investigators that the company has also accepted bets in Sudan and Syria, both of which have been subject to U.S. sanctions. The executive suggested members of Syrian President Bashar al-Assad’s family were among the players, the letter says. The investigator was operating undercover during the interview.

Made Recordings

The investigators also say they recorded themselves playing Evolution games through internet addresses in Singapore and Hong Kong, where online betting is banned. They used Bitcoin to deposit and retrieve money, the letter said. Evolution also allows unlicensed third parties to offer its products in Spain, Sweden and Italy, the letter said.

The investigators made video recordings -- viewed by Bloomberg News -- to document their findings.

Evolution said its games can’t be played in any countries on sanctions lists. The company said it only sells its products to gaming operators with valid licenses in markets where online gambling is legal. It is the operators who decide where to offer the products, according to Linton.

“We have no direct relationship with the underlying player and no involvement in handling of players’ money,” Linton said in his email.

Shares of Evolution rose 1.1% to 1,482.80 kronor Tuesday in Stockholm. The stock is up 78% this year.

Online gambling has exploded globally in recent years, with many jurisdictions wrestling with the legality of the business and the regulation of operators.

The complaints are similar to ones made earlier this year by Hindenburg Research, a firm specializing in short sales. Hindenburg said a DraftKings Inc. subsidiary, SBTech, also operated in illegal markets. DraftKings said it conducted a thorough review of SBTech’s business practices before merging with the company and was comfortable with its findings. The U.S. Securities and Exchange Commission has been investigating the matter. 

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