The defamation lawsuit filed by Evolution against intelligence firm Black Cube is capturing significant attention within the gaming industry. This legal battle stems from events in 2020 when Playtech reportedly hired Black Cube to investigate Evolution’s operations in markets deemed prohibited or unlicensed.
This investigation, which involved secret recordings and conversations with Evolution employees as well as other whistleblowers, led to a serious report accusing Evolution of knowingly offering its services in sanctioned areas.
In April, court records revealed Evolution's effort to include Playtech in the ongoing case. Playtech has defended its collaboration with Black Cube, while Evolution characterized the allegations as a "smear campaign," strongly rejecting the claims as "highly inflammatory and knowingly false."
As the case progresses, a pivotal piece of evidence supporting Evolution's defense has emerged in the form of a report from Spectrum Gaming Capital, a firm specializing in gaming advisory services. This report was intended to counter the negative assertions made by Black Cube regarding Evolution's business practices.
The Spectrum report had remained confidential until recently due to its commercially sensitive content, but it was fully released by the court this week. Playtech has highlighted several findings from this report, noting they align with the conclusions drawn by Black Cube.
One significant point from the Spectrum report is its assertion that Evolution did not intend to operate in banned regions. However, it did identify compliance issues that resulted in Evolution's games being accessible in jurisdictions where online gambling is prohibited, including the UAE, Singapore, Hong Kong, and Saudi Arabia.
The August 2021 Spectrum report underwent a thorough analysis of Evolution's operational and compliance practices. Using a VPN to test access to restricted markets, Spectrum found that Evolution's games could indeed be played in the aforementioned areas. Yet, it also reported that it could not access Evolution's games in Iran, Sudan, and Syria, contradicting Black Cube's earlier claims. Spectrum described the allegations regarding these countries as "unsupportable and lacking credibility."
Spectrum's findings indicated that certain Evolution clients, such as BitCasino.com and Stake.com, were knowingly providing games in these banned markets, violating their contractual agreements with Evolution. This appeared to indicate inadequacies in Evolution's compliance measures, as it seemingly failed to detect these infractions.
The report criticized Evolution's compliance procedures, stating that they were ineffective and necessitated immediate improvement to adhere to contractual obligations. It warned that Evolution’s income stemming from these unauthorized activities could harm its reputation and invite increased regulatory scrutiny.
Additionally, the report assessed Evolution's client vetting process, indicating it required clients to provide ownership certifications but often did not implement a reliable process, exposing the company to potential risks.
Spectrum also addressed claims made by Black Cube regarding interviews conducted with Evolution staff, including Ezugi CEO Kfir Kugler. Notable was Kugler’s assertion that he did not intend to incriminate Evolution and felt misled by Black Cube, believing the individual he met was using a false identity.
Regarding the allegations of accepting cryptocurrency wagers, the Spectrum report confirmed that while end-users placed bets in virtual currencies, it was the operators doing so, not Evolution directly. Analysis of a document provided by Evolution revealed 1,124 instances of cryptocurrency use, accounting for 11.5% of the sessions listed in the spreadsheet.
Finally, Spectrum noted that while Evolution depends on its clients to enforce robust anti-money laundering and KYC protocols, it does not monitor compliance with these obligations, raising further compliance concerns.
