Evolution’s defence in its defamation case against intelligence firm Black Cube has been bolstered by a Spectrum Gaming report that rejects some allegations but also identifies shortcomings in the supplier’s compliance controls.
The case is being heard in the New Jersey Superior Court and dates to 2020, when Playtech allegedly engaged Black Cube to investigate Evolution’s activities in prohibited and unlicensed markets. Black Cube’s work included secretly recorded interviews with Evolution staff and other whistleblowers, followed by a report alleging that the supplier knowingly provided services in sanctioned jurisdictions.
Evolution has described the investigation as a “smear campaign” and called the allegations “highly inflammatory and knowingly false”. In April, court documents showed that Evolution had sought to add Playtech to the case.
Games found in four prohibited markets
Spectrum Gaming Capital’s report was prepared to assess Evolution’s operations and challenge Black Cube’s findings. Evolution had kept it confidential because it contained commercially sensitive material, but the court released the 2022 report in full this week.
Spectrum found that Evolution did not knowingly permit its games to be offered in prohibited territories. However, VPN tests showed that games had been available to players in the UAE, Singapore, Hong Kong and Saudi Arabia.
The same tests could not access Evolution games in Iran, Sudan or Syria. Spectrum said allegations concerning those markets were “unsupportable and lacking credibility and proper foundation”.
The report also found that BitCasino.com and Stake.com were knowingly offering Evolution games in banned markets, despite contractual restrictions. The sites were connected to Evolution clients and B2B aggregators Hub 88 and Babylon.
Spectrum said Evolution’s “ineffective compliance procedures” had allowed these activities to go undetected. It recommended a prompt review and enhancement of those procedures, warning that the supplier could be “unwittingly susceptible” to third-party operators breaching its contracts. Evolution had received income from the unauthorised activity, although Spectrum said it was not purposeful and could expose the company to regulatory scrutiny and sanctions.
Client checks and crypto wagers
Spectrum also questioned Evolution’s client onboarding. At the time, clients had to certify beneficial ownership of 25% or more, but the report said the process was not viable because company documents could be inaccurate. It recommended refusing business or conducting enhanced due diligence where red flags emerged.
The report played down evidence from Black Cube interviews, saying some interviewees had little or no familiarity with the allegations. Ezugi CEO Kfir Kugler told Spectrum he had not intended to provide incriminating information, felt duped and believed the interviewer had used a fake identity. Kugler said Evolution did not supply games to Iran, while noting: “I know we have players in Dubai”.
Spectrum confirmed that end users had placed crypto wagers on Evolution games through Hub88, but said the operator, rather than Evolution, accepted the bets. Its review of part of a 75-page transaction spreadsheet identified up to 1,124 virtual currency transactions, representing 11.5% of the sessions examined. The report said Evolution relied on clients to implement additional AML and KYC controls and did not review operators’ compliance with that enhanced due diligence requirement.
