Evolution generated revenue from markets where its online casino games were prohibited, according to a company-commissioned report that the Swedish gaming group had tried to keep confidential.
The findings have now become public as part of an ongoing legal dispute involving Evolution and intelligence firm Black Cube, reviving questions over the company’s compliance controls and its operations in markets where gambling products were not permitted.
Evolution commissioned Spectrum Gaming Group in 2021 to examine allegations made in a Black Cube investigation into the company’s business practices. While the report rejected some of the more serious claims, it also identified significant compliance weaknesses and confirmed that Evolution games were being played in several prohibited markets.
Report confirms activity in prohibited markets
Spectrum said it was able to specifically corroborate claims that Evolution’s games were accessible in locations including Hong Kong, Singapore, the United Arab Emirates and Saudi Arabia.
The report also found that Evolution had received revenue from operators offering its games in so-called “grey markets”, including Hong Kong and Singapore.
However, Spectrum did not find evidence supporting allegations that Evolution had operated in US-sanctioned markets such as Syria and Iran.
The distinction is important, as Evolution has previously argued that the Black Cube report contained false allegations about its business.
Compliance concerns highlighted
Beyond market access, Spectrum identified broader weaknesses in Evolution’s compliance framework.
The consultancy found that the company did not take proactive steps to ensure that customer-facing operators using its products were complying with contractual requirements.
It also identified instances where Evolution had accepted wagers in virtual currencies that should have triggered enhanced due diligence.
According to the report, Evolution had not taken remedial action to block the specific sites or jurisdictions identified in the allegations, nor had it enforced contractual provisions against operators involved in the activity.
The findings have put Evolution’s relationship with its operator clients under additional scrutiny, particularly around how responsibility for market compliance is divided between suppliers and operators.
Legal battle brings report into public view
The Spectrum report was disclosed in a New Jersey state court this week after Black Cube successfully argued that the document was relevant to its defence in the ongoing litigation.
Evolution had sought to keep the report confidential, arguing that it contained proprietary information that could damage its competitive position.
The dispute stems from Black Cube’s 2021 investigation, which was commissioned by Playtech and subsequently contributed to allegations submitted to the New Jersey Division of Gaming Enforcement.
Evolution later launched a defamation claim against law firm Calcagni & Kanefsky, alleging that anonymous allegations submitted to regulators contributed to a fall in its share price.
A New Jersey judge said last year that, when viewed through the regulator’s investigation, the allegations were “objectively baseless”. The Division of Gaming Enforcement ultimately closed its probe.
Evolution faces renewed scrutiny
The release of the Spectrum report nevertheless creates a more complicated picture than a simple dismissal of the original allegations.
While the consultancy did not substantiate claims concerning sanctioned markets such as Iran and Syria, it did confirm activity in other prohibited and grey-market jurisdictions and identified significant gaps in Evolution’s compliance processes.
Playtech has continued to defend its decision to commission the original Black Cube investigation, while Evolution has previously maintained that the allegations against it were false.
Evolution declined to comment on the newly disclosed report.
Source: Financial Times