Playtech has hailed the publication of an Evolution-commissioned report compiled following accusations that the latter supplies prohibited and sanctioned markets.
Evolution is currently locked in a defamation lawsuit in New Jersey against the law firm Calcagni & Kanefsky LLP and the Israeli investigative firm Black Cube, which was revealed to have been commissioned by a Playtech subsidiary to investigate Evolution’s practices.
Evolution has accused Playtech of leading a ‘defamatory smear campaign’ against the company. Playtech noted it will ‘defend itself vigorously’ and stands by its decision to commission Black Cube to create a report into Evolution’s working practices.
Following a filing by Black Cube in connection with the ongoing lawsuit that contained the full Spectrum Report, Playtech stated the report does little to exonerate Evolution, as Evolution had previously detailed.
Playtech told the markets that they are ‘pleased that the Spectrum Report is now public, and welcomes the opportunity for the court, regulatory authorities and other stakeholders to review the document in its entirety’.
“Playtech stands by its decision to commission the original Black Cube investigation. The Company remains very confident that the court proceedings will confirm the credibility and legitimacy thereof and the significant concerns it raised,” the game developer added.
An Evolution source told iGaming Expert that Playtech has selectively cited aspects of the report. For example, they noted that investigators found no evidence that Evolution took cash payments to use Evolution’s games in sanctioned countries, as alleged by the Black Cube report.
iGaming Expert breaks down these allegations after viewing the full report.
What the Spectrum Investigation Corroborated
“The Spectrum Report in fact corroborates fundamental aspects of Black Cube’s investigation, including concerns around the availability of Evolution’s games in certain prohibited markets.”
The report stated that it could ‘specifically corroborate’ Black Cube’s accusation that Evolution’s games were available in prohibited locations.
Investigators found that using a VPN, they could access Evolution’s content in Hong Kong, Singapore, the UAE and Saudi Arabia.
However, the Spectrum Report notes that this was done so ‘without Evolution’s knowledge or approval’.
According to the report, contracts Evolution signed with operators and game aggregators specify restricted territories. However, Evolution appears to have failed to exercise ‘due diligence’ to ensure this stipulation is met.
The investigators said they accessed the games through online gambling platforms supplied by game aggregators that are partnered with Evolution.
“The fact that Evolution’s games are able to be accessed in territories that are restricted in the contract is the direct result of Evolution relying exclusively upon its clients to adhere to the contract terms without any verification of them actually doing so,” said the report.
Investigators also said that the use of VPNs can ‘camouflage’ the actual location of players, even when Evolution obtains the IP address when a game session is opened.
“Evolution failed to provide Spectrum with the significant information it had requested. This included, for example, data that would allow Spectrum to determine whether gaming sessions occurred in Iran, Syria and Sudan, as well as the revenue reports for those jurisdictions.
“The failure to provide that information prevented Spectrum from completing critical parts of its investigation, meaning Evolution still has serious questions to answer around the availability of its games in prohibited markets.”
What Investigators Could Not Prove and Their Conclusions
The Spectrum Report said that it could not substantiate claims that Evolution’s games were being played in Iran, Syria and Sudan. Investigators were unable to place bets on Evolution’s content when they used a VPN placed in these locations.
“Based on our findings, Evolution does not conduct business in sanctioned countries,” the report added.
The Spectrum Report noted that Evolution did not submit specific information related to gaming sessions in Iran, Hong Kong, Singapore, France, Spain, Italy and Sweden.
However, it deemed Evolution’s explanation that these session details were unavailable as ‘acceptable’ because the B2B operator holds proprietary information.
Similarly, it determined Evolution’s refusal to provide a 2021 revenue summary by country as acceptable, as the developer’s legal counsel considered it proprietary information.
Investigators did note that this ‘hindered Spectrum’s ability to confirm or refute allegations made in Black Cube’s report’.
“Spectrum reported that Evolution ‘does not take any proactive steps’ to ensure that the customer-facing gambling operators using its products ‘are complying with the terms of the contracts’.
“It is evident that Evolution’s concern around the release of the Spectrum Report was not related to sensitive proprietary financial information as Evolution argued, but instead, the corroboration of its ‘significant’ compliance issues, which according to the Spectrum Report, are ‘problematic’ and ‘place Evolution in a precarious situation with law enforcement officials’.”
The Spectrum Report did find that Evolution has ‘ineffective compliance procedures’ that ‘need prompt re-evaluation and enhancement’ to ensure that there is compliance with signed contracts.
“Evolution should consider reviewing its policies and procedures to strengthen the KYC and policies regarding its clients, particularly its aggregators, and to enforce existing terms and conditions in contracts more stringently,” said the report.
Published in August 2022, the Spectrum Report said at the time of investigation that there had been no ‘remedial action’ since the allegations first arose to enforce contracts with clients related to activity in restricted territories.
However, the report also stated that no information was found that would ‘disqualify Evolution from being found suitable to participate in the highly regulated gaming industry in the US and elsewhere’.
The investigators also stated: “Based on this investigation, Spectrum does not believe that Evolution has engaged in any illegal practices.”
The war of words between the two companies is only likely to intensify as the defamation suit rumbles on and Evolution’s executives expect litigation to extend through 2026.
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