The defamation lawsuit involving Evolution and the intelligence firm Black Cube in the New Jersey Superior Court is drawing significant attention within the gaming industry. This case traces back to 2020, when Playtech allegedly hired Black Cube to investigate Evolution's operations in unauthorized and unregulated markets.
The investigation encompassed secret recordings of interviews and discussions with Evolution employees and whistleblowers, leading to a report that accused the supplier of knowingly operating in restricted jurisdictions. Recently, court documents revealed that Evolution sought to include Playtech in its case.
Playtech has defended its investigation and Black Cube's findings, while Evolution has characterized the allegations as a "smear campaign," firmly denying the claims as "highly inflammatory and knowingly false."
As proceedings continue, a crucial element of Evolution's defense is the Spectrum Gaming Capital report, which was initially kept confidential due to its sensitive nature. This report aimed to counter the allegations made by Black Cube and was released in full by the court this week.
Playtech has publicly celebrated specific findings in the Spectrum report, which it claims support the conclusions of Black Cube. Importantly, the report indicates that while Evolution did not consciously permit games in prohibited territories, it nonetheless identified various compliance issues that allowed its games to be accessible in regions where online gambling is restricted.
The Spectrum report's preliminary findings suggest that Evolution's games were found to be available in the UAE, Singapore, Hong Kong, and Saudi Arabia. The August 2021 report detailed an extensive examination of Evolution's business practices and compliance protocols in relation to the anonymous allegations.
Additionally, tests using VPNs uncovered that Evolution's games could be accessed in these banned locations. However, there were also findings that contradicted Black Cube's earlier claims regarding access in Iran, Sudan, and Syria, where Spectrum noted repeated denial of entry.
Spectrum's investigation emphasized shortcomings in Evolution's compliance procedures. Specifically, BitCasino.com and Stake.com were reportedly found offering Evolution's games in prohibited markets, contrary to their agreements with the supplier. The report indicated that Evolution's lack of effective compliance measures enabled these violations to persist, advising immediate improvements to align with contractual terms.
Spectrum highlighted that Evolution may not intentionally allow its games to be used through third-party operators in violation of agreements, though it noted that such unauthorized activities might damage Evolution's reputation and lead to increased regulatory scrutiny.
The review examined Evolution's vetting processes for potential clients and noted that while the company sought certification of ownership stakes, it did not reliably verify the accuracy of provided documents.
The report also reconsidered claims made by Black Cube based on interviews with Evolution personnel. It found that some employees, previously cited as sources of incriminating information about Evolution's business practices, had little awareness of the claims against the company. Kfir Kugler, the CEO of Ezugi, clarified he had been misled during his interviews and asserted that Evolution does not serve markets like Iran.
Another allegation by Black Cube suggested Evolution was accepting crypto wagers. Spectrum confirmed that users placed bets with virtual currencies through operators such as Hub88, while Evolution itself did not directly accept these bets. The report indicated the presence of approximately 1,124 instances of cryptocurrency usage, amounting to 11.5% of the gaming sessions sampled.
Spectrum noted that Evolution relies on its clients to enforce AML and KYC protocols and does not conduct compliance reviews of its operators’ efforts to prevent cryptocurrency use. The entire Spectrum Gaming Capital report is now accessible to the public.
