The ongoing defamation case involving Evolution against the intelligence firm Black Cube is drawing significant attention within the gaming industry. This legal matter began in 2020, when Playtech allegedly hired Black Cube to investigate Evolution's activities in markets that were prohibited and unlicensed.
This investigation reportedly included covert recordings made during interviews with Evolution staff and other whistleblowers. The findings of Black Cube resulted in a critical report, alleging that Evolution knowingly operated its services in jurisdictions with restrictions.
In April, court filings indicated that Evolution sought to add Playtech as a defendant in this case. Playtech has defended its partnership with Black Cube, while Evolution has denounced the investigation as a "smear campaign" and vehemently rejected the claims, labeling them as “highly inflammatory and knowingly false.”
As proceedings continue, a crucial piece of evidence intended to support Evolution’s defense—a report from gaming advisors Spectrum Gaming Capital—has gained attention. This document analyzed Evolution's operations and aimed to counter the allegations presented in the Black Cube report. Initially kept confidential due to commercially sensitive information, the full report was released by the court this week.
Playtech has highlighted certain findings from the Spectrum report, which it claims support the conclusions drawn by Black Cube. Notably, the Spectrum review acknowledges that Evolution did not intentionally permit its games in prohibited territories. However, it does identify several compliance issues that led to the availability of its games in markets where online gambling is illegal.
Spectrum Gaming’s lengthy report began with an extensive review of Evolution's business practices, including compliance with anti-money laundering procedures, in relation to the allegations from Black Cube. The analysis found that Evolution’s games were accessible to players in the restricted areas of the UAE, Singapore, Hong Kong, and Saudi Arabia using VPN connections.
Interestingly, while using a VPN, Spectrum could not access Evolution’s games in Iran, Sudan, and Syria, contradicting Black Cube's earlier claims. "When we attempted to play games in those locales using VPNs, we were repeatedly denied access," noted the report, which characterized the allegations related to these countries as “unsupportable and lacking credibility.”
The Spectrum report pointed out that BitCasino.com and Stake.com had knowingly provided Evolution's games in these prohibited territories, violating their contract terms. Both sites were found to be associated with Evolution's clients, B2B aggregators Hub 88 and Babylon. The report indicated, "Our investigation revealed certain clients had allowed for Evolution’s game content to be provided on their online gaming websites in clear violation of their contracts."
Spectrum criticized Evolution's compliance procedures as "ineffective," suggesting that these shortcomings allowed violations to occur without detection. "In our judgment, Evolution’s ineffective compliance procedures have allowed these situations to develop and therefore need prompt reevaluation and enhancement," the report stated. It emphasized the potential reputational risk and regulatory scrutiny that might arise from these unauthorized activities.
Spectrum also reviewed Evolution's client onboarding process, asserting that the requirement for clients to certify beneficial ownership of 25% or more was not being enforced effectively. The report recommended that Evolution should either decline business with clients presenting red flags or perform enhanced due diligence.
In addition, the Spectrum review examined claims made by Black Cube regarding interviews with Evolution employees to support its allegations. Following these claims, Spectrum interviewed those same individuals and found that some were not well-acquainted with the allegations made against Evolution. Specifically, CEO Kfir Kugler of games developer Ezugi asserted that he did not intend to provide damaging information and felt misled during the meeting with Black Cube.
Kugler stated, "I know we have players in Dubai," reiterating that Evolution does not operate games in Iran.
Another assertion from Black Cube claimed Evolution accepted virtual currency wagers. While the Spectrum report confirmed the use of cryptocurrencies by end users, it clarified that it was the operators who accepted these bets—not Evolution itself.
In a review of a 75-page spreadsheet detailing transactions provided by Evolution, Spectrum identified over 1,100 instances of virtual currency usage, constituting 11.5% of the assessed sessions. The report noted that Evolution relies on its clients to implement anti-money laundering and know-your-customer procedures, and does not monitor compliance,
The full Spectrum Gaming Capital report is now available for further examination.
