Evolution's defamation lawsuit against intelligence firm Black Cube is under scrutiny within the gaming industry as proceedings unfold in the New Jersey Superior Court. This legal dispute traces back to 2020 when Playtech allegedly contracted Black Cube to infiltrate and investigate Evolution's operations in markets where it was supposedly unlicensed or prohibited.
The findings from Black Cube, which emerged through clandestine recordings and interviews with Evolution personnel, culminated in a report accusing the gaming supplier of willfully providing its services in jurisdictions deemed off-limits.
In April, it was revealed through court filings that Evolution sought to include Playtech in its lawsuit. Playtech has publicly defended its association with Black Cube, while Evolution has staunchly denounced the investigation, branding it a “smear campaign” filled with “highly inflammatory and knowingly false” claims.
A significant piece of evidence in Evolution's defense is a report from Spectrum Gaming Capital, a specialist in gaming. This report aimed to counter Black Cube's allegations regarding Evolution's operational practices. Until recently, this document was confidential, described by Evolution as containing sensitive commercial information.
However, the court released the full 2022 Spectrum report this week. Playtech has since lauded certain segments of the report, which it claims align with the findings from Black Cube.
Crucially, the Spectrum report acknowledges that Evolution did not deliberately enable games in prohibited territories. Still, it highlights various compliance lapses that allowed its offerings to reach markets where online gambling is banned.
Among the report’s prominent findings is evidence that Evolution's games were accessible in the UAE, Singapore, Hong Kong, and Saudi Arabia. Spectrum gaming undertook a comprehensive review of Evolution’s business practices, regulatory compliance processes, and anti-money laundering measures in response to the allegations raised in the prior anonymous report.
Using VPN technology, Spectrum found that it could access Evolution’s games in those regions categorized as prohibited. However, attempts to access these games in Iran, Sudan, and Syria were unsuccessful, contradicting Black Cube’s claims. Spectrum asserted, “We were repeatedly denied access,” and characterized the allegations relating to these countries as “unsupportable and lacking credibility.”
The report also criticized Evolution’s compliance protocols, particularly highlighting that sites such as BitCasino.com and Stake.com were offering its games in markets that explicitly violated contract terms. These sites were linked to Evolution's clients, specifically B2B aggregators Hub 88 and Babylon.
Spectrum indicated that Evolution's insufficient compliance measures facilitated these transgressions without detection. They emphasized that the company's current compliance processes must be reevaluated and strengthened to adhere to contractual agreements.
The investigation found that Evolution inadvertently profited from these unauthorized activities, which could jeopardize its reputation and attract increased regulatory scrutiny.
Further inquiry into Evolution's client vetting revealed that while clients were required to certify beneficial ownership of 25% or more, the process lacked sufficient rigor, often allowing potentially inaccurate documentation.
Spectrum advised that if red flags appear during the onboarding process, Evolution should either avoid partnering with these entities or conduct further due diligence before proceeding.
In addressing the interviews conducted by Black Cube, Spectrum examined several Evolution employees cited by the intelligence firm. The report indicated that follow-up discussions revealed many interviewees were not fully knowledgeable about the allegations leveled against the company. Kfir Kugler, CEO of Ezugi, noted that he felt manipulated during his interaction with Black Cube, claiming that he never intended to implicate Evolution, asserting, “I know we have players in Dubai.”
Black Cube also alleged that Evolution accepted cryptocurrency wagers. Spectrum confirmed the existence of these transactions but clarified that while users placed bets using virtual currency, it was the operators, not Evolution, that processed those wagers. The analysis indicated over 1,124 instances of cryptocurrency usage across transactions, making up approximately 11.5% of the reviewed data.
The Spectrum report further noted that Evolution relies on its clients to uphold anti-money laundering and know-your-customer protocols and does not monitor their compliance with these obligations adequately.
The complete Spectrum Gaming Capital report is available for viewing.
