Evolution has accused Playtech Software, a subsidiary of Playtech, of ordering investigation firm Black Cube to prepare a report containing “highly inflammatory and knowingly false claims” about its business operations, to harm the company for anti-competitive reasons.

The case, Evolution said, dates back to December 2020 when Playtech began working with intelligence firm Black Cube.

According to Evolution, this is when the controversial report – which it said was intended to “destroy its reputation” – was commissioned by the developer, with input from high-level Playtech executives including CEO Mor Weizer.

Playtech stands by report

Playtech issued an almost-immediate response to Evolution’s statement on Tuesday, insisting claims of a smear campaign are “wholly untrue” and “designed to distract from serious questions about Evolution’s business practices”.

The supplier giant said its subsidiary approached the independent investigator to look into “credible and repeated concerns” from operators, suppliers and regulators about Evolution’s activities in prohibited and sanctioned markets. The probe also targeted the extent of Evolution’s supply to unlicensed operators in regulated markets.

It added that the investigation was undertaken lawfully to understand and verify “concerns of significant regulatory and commercial importance”.

“The report published, as a result of the investigation, clearly evidences that Evolution’s business practices undermine lawful and compliant gambling operations,” Playtech said. “Such conduct damages trust in the credibility of the entire industry and also ultimately impacts government tax collection.

“Playtech stands by the decision to commission the report. Evolution continues to seek to avoid legitimate scrutiny rather than address longstanding questions about its conduct, including its decision to supply operators in illegal markets and to support unlicensed operators in regulated markets.

Evolution under review by GB Gambling Commission

In December 2024, Great Britain’s Gambling Commission initiated a review of Evolution’s supplier licence in the market, as it had discovered the company’s games had been provided to unlicensed operators in the country.

The review is ongoing, with no visible timeline set. In response to the move, Evolution sought to shut down services in grey markets across Europe to tidy up its operations.

Evolution said in its Q1 earnings report in April that it had taken steps to ensure its regulatory requirements across Europe were being met. But it noted that group profitability had taken a hit during the quarter, as a result of these exits.

In July CEO Martin Carlesund said the financial impact of this process had continued into Q2, as it had adopted geo-blocking technology to prevent its products from being used in unlicensed markets.

“We don’t guide on [the impact of] each market, but we are working hard to ensure we are in a position proactively in the European market and that is a little bit more expensive than we anticipated,” Carlesund said during the Q2 analyst call.  

Black Cube’s investigation

Playtech and Black Cube’s investigation dates back to 2021 when the latter was accused of secretly recording conversations and interviews with Evolution employees, using false personas and disguises.

Up to five former Evolution employees and board members are said to have featured. On this, Evolution accused Black Cube of editing videos and audio to create a “misleading and defamatory report”.

In November 2021, law firm Calcagni & Kanefsky submitted the report to regulators in New Jersey and Pennsylvania for analysis.

Evolution flagged a PR company (HeraldPR) which it said was paid $10,000 by Black Cube later the same month. HeraldPR is led by Juda Engelmayer, who, according to a New York Times piece referenced by Evolution, is seen as a “go-to guy among a particular subset of alleged fraudsters and predators”.

Weeks later Evolution filed a lawsuit over the matter. This targeted Calcagni & Kanefsky and, at the time, the anonymous parties behind the report as it sought to understand who had commissioned the document.

The suit made claims about defamation, trade libel, tortious interference with prospective economic advantage, fraud and other illegal conduct. It remains ongoing in the Superior Court of New Jersey.

‘Extraordinary’ measures to hide Playtech and Black Cube identities

Evolution went on to say that for years after the lawsuit was filed, Playtech and Black Cube took “extraordinary” measures to conceal their roles in the matter.

However, the case began to unravel in February last year. Regulators in both New Jersey and Pennsylvania found no evidence of wrongdoing by Evolution, including accusations it took illegal bets and inappropriate payments.

Black Cube’s identity was revealed in April this year but the firm denied knowledge of who had commissioned the report. As such, Evolution amended its complaint by adding Black Cube as a defendant in the case.

The New Jersey Superior Court in September ordered Black Cube to identify its client. Within this order, it branded the report as “objectively baseless”.

Now, Evolution has said it will amend its complaint to include Playtech as a defendant. It said it expects litigation to proceed in earnest and likely extend through 2026.

‘Deeply disturbing’ case for Evolution

In its statement, Evolution said it was “deeply disturbing” to see one of its competitors take such action. It added that Playtech would have been fully aware of the “extremely harmful repercussions” of its investigation.

“The report, which was furnished to regulators by a law firm representing Black Cube and purposely leaked to the media, was determined by two state regulators in the US to be lacking in evidentiary support,” Evolution said.

“Later, the New Jersey Superior Court also determined that the defamatory report was untruthful and lacked veracity. Notwithstanding those findings, dissemination of the report has resulted in multi-billion-dollar damage to our company.”

Implications on the wider industry

Commenting on the case, analysts at Regulus Partners raised concerns about how it may impact wider opinion of the iGaming sector. Regulus’ Paul Leyland said the industry “does not need any more help to make itself look dishonest”.

“This latest revelation is simply grist to the mill that the industry as a whole cannot really be trusted to do the right thing even though the majority of operators and suppliers are decent companies staffed by decent people trying to provide a decent product,” Regulus said.

“An industry that can only thrive with its social contract intact simply cannot behave like this. It is worse than tone-deaf from a corporate perspective, it is self-defeating for the whole industry, which Playtech’s clients are also no doubt reflecting on.”

Regulus also noted the long-term impact for Playtech, with 30% having already been wiped off its stock market value since the news broke on Tuesday.

“To commission a deliberately anonymous smear campaign that was clearly designed to do serious regulatory and reputational damage requires the blow to land: the bullet must kill, not wound, or the wounded party can claim damages,” Regulus said.

“The fact that Playtech has lost £300 million from its stock market value suggests that investors realise the financial threat to Playtech might be rather more serious than the embarrassment of getting caught.”