The defamation lawsuit filed by Evolution against intelligence firm Black Cube is drawing significant attention within the gaming industry. The case began in 2020 when Playtech allegedly enlisted Black Cube to investigate Evolution's operations in unlicensed markets.
The investigation involved covertly recorded interviews with Evolution employees and others, culminating in a report that accused the company of knowingly operating in restricted jurisdictions. In April, court filings indicated that Evolution aimed to include Playtech in the lawsuit.
Playtech has defended its collaboration with Black Cube, while Evolution has condemned the allegations as part of a "smear campaign," asserting that the claims are "highly inflammatory and knowingly false."
As the legal proceedings progress, a critical element supporting Evolution's defense is a report by Spectrum Gaming Capital, which assessed the company's business transactions in light of the accusations from Black Cube. This report had been kept confidential due to its commercially sensitive nature but was released in full by the court this week.
Playtech has highlighted findings from the Spectrum report that it claims support the conclusions of Black Cube. The Spectrum document concedes that Evolution did not intentionally permit games in restricted areas, yet it pointed out various compliance issues that led to the availability of Evolution's games in markets where online gambling is forbidden.
Among the significant revelations from the long report, Spectrum Gaming discovered that Evolution's games could be accessed in the UAE, Singapore, Hong Kong, and Saudi Arabia. Their review encompassed a thorough investigation into Evolution's operations and compliance protocols pertaining to anti-money laundering procedures.
Using a VPN to access the blocked markets, Spectrum noted that while Evolution's games were available in some prohibited areas, attempts to access these games from Iran, Sudan, and Syria were unsuccessful. Spectrum stated that its efforts to play Evolution's games in those locations were met with repeated access denials, rendering the allegations against the company regarding these countries "unsupportable."
The report indicated that two websites, BitCasino.com and Stake.com, were proactively offering Evolution's games in banned jurisdictions, which violated their contractual agreements. These sites were linked to Evolution’s clients, specifically B2B operators Hub 88 and Babylon.
Spectrum attributed the situation to "ineffective compliance procedures" at Evolution, asserting that these flaws allowed unauthorized access to the games.
Further, the investigation revealed that Evolution inadvertently gained revenue from these non-compliant activities, potentially damaging its reputation and exposing the company to increased scrutiny from regulators.
The report also analyzed Evolution's client vetting processes, concluding that while Evolution required clients to disclose ownership of 25% or more, the verification of documents was inadequate, as inaccuracies could occur. Spectrum urged Evolution to enhance due diligence and reconsider partnerships if red flags were encountered during onboarding.
From the interviews conducted by Black Cube, specific Evolution employees were said to have provided damaging information. However, Spectrum found that many of these employees had limited knowledge regarding the claims against the company. Notably, Kfir Kugler, a CEO of Ezugi, expressed that providing any damaging information was unintentional and felt misled by Black Cube during their discussions.
Additionally, Black Cube's claim that Evolution accepted bets in cryptocurrencies was confirmed to some extent by Spectrum. The report indicated that while wagers using virtual currencies occurred, it was actually the operators, not Evolution, who accepted these bets. Spectrum identified up to 1,124 instances of cryptocurrency usage in transactions linked to Evolution’s games, comprising about 11.5% of the sampled sessions.
In conclusion, the Spectrum report emphasized Evolution's reliance on its clients to uphold compliance requirements, indicating a lack of oversight in the implementation of related anti-money laundering practices.
