Recordings Suggest Evolution Leaders Knew of Illegal Market Access

Sweden-based gaming giant Evolution AB faced renewed scrutiny after leaked recordings suggested that senior executives were aware that the company’s games were accessible in illegal markets or those subject to US sanctions, such as Iran and Sudan.

The revelations, first reported by Bloomberg, were submitted by private intelligence firm Black Cube in a defamation suit Evolution filed against Calcagni & Kanefsky, a New York-based law firm representing an unnamed client.

Executives Allegedly Aware of Illegal Market Penetration

According to Bloomberg, Black Cube acquired the recordings between 2021 and 2024, capturing current and former Evolution executives reacting to evidence of access in Iran, Sudan, China, and Syria.

Jeff Millar, Evolution’s former US commercial director, said: “It really shocked me, it absolutely shocked me” that the company’s games could be accessed in illegal or sanctioned markets.

According to the filing, Millar made the comments to an undercover Black Cube agent who posted as a gambling investor and asked him if Evolution games are available in “not only unregulated but sanctioned” countries.

In another recording, Kfir Kugler, Evolution’s commercial director for Africa and Latin America, showed a Black Cube agent a spreadsheet of data breaking down revenues by countries, including Sudan. He claimed he can pull data as far back as 2016, when the US designated Sudan as a state sponsor of terrorism.

Kugler also claimed that Evolution’s games are available in Syria, and he is “sure that Assad’s family are playing, 100%.” Assad is the former Syrian president, who is still under US sanctions.

Moreover, Black Cube agents filmed themselves playing Evolution games in Iran and Syria, with local identifiers such as license plates, street signs, and IP addresses visible.

Evolution has denied wrongdoing. The company has attributed access from these countries to cybercriminal activity, stream hijacking, or misuse by aggregators. It recently cited cybersecurity attacks as margin hits in its latest quarterly earnings call.

Over Half of Evolution’s Revenue Comes From Unregulated Markets

Evolution generates over half of its revenue from “unregulated” markets. In the latest filing, the number was 56%, down from 61% in 2024. Rival Playtech, by comparison, reported just 15% of its revenue from unregulated markets last year.

Evolution does not disclose revenue from specific countries, but from regions. Millar, who left the company in 2023, said in his recording that the company utilizes aggregators (intermediaries) to sell its games to markets such as China, South Korea, Malaysia, and Thailand, all of which prohibit online casinos.

Millar added that Evolution’s CEO, Martin Carlesund, had regular briefings on the size of these markets by regional directors. However, he withheld that information from investors.

Millar stated: “They do their best to avoid the question of who exactly is playing their games in Asia, right? And he’s getting away with it.”

Evolution says it provides only regional data because country-specific figures are commercially sensitive.

The 2021 Complaint and NJ Clearance

In 2021, Calcagni & Kanefsky, acting on behalf of an unnamed client, filed a complaint with the New Jersey Division of Gaming Enforcement (NJDGE) against Evolution.

The law firm based its filing on an investigative report titled “Evolution’s Online Casino Presence in Illegal Markets”. The report, later revealed to have been prepared by Black Cube, alleged that Evolution knowingly allowed its games to be played in prohibited jurisdictions.

“Evolution is fully aware of its end-users’ physical location within the mentioned above illegal markets, via its direct and indirect offerings in these territories.”

The report cited test cases where users from Iran, Syria, and Sudan were able to access Evolution’s games. It accused the company of:

• Failing to enforce Know Your Customer (KYC) protocols.
• Continuing to collect revenue from banned territories.
• Committing licensing breaches in countries including Italy, Spain, and Sweden.

Evolution denied the report’s findings. It countered by stressing that it’s a business-to-business (B2B) supplier, saying that licensed operators are responsible for player compliance.

In February 2024, the NJDGE concluded its investigation. It found no evidence that Evolution “sanctioned, promoted, permitted, or otherwise materially benefited” from operators offering its games in prohibited jurisdictions.

The regulator noted that Evolution voluntarily implemented compliance enhancements and added that they were “unrelated to any alleged jurisdictional violations.”

Following the clearance, a New Jersey court ordered Calcagni & Kanefsky to reveal the identity of its client.

The firm disclosed that its client was Black Cube. Still, it did not name the entity that had commissioned Black Cube to prepare the 2021 report. Many speculated that it was a competitor, but no evidence has surfaced to back those claims.

Legal Fallout and Black Cube’s Continued Probe

Following the 2021 complaint, Evolution lost over $3 billion in market value. As a result, the company sued Calcagni & Kanefsky, saying the report was “inaccurate, false, defamatory and methodologically flawed”.

As a result, Black Cube “redoubled its investigative efforts to further corroborate the accuracy of its findings”, according to the affidavit.

The intelligence firm submitted the latest filing and recordings as part of a request to move the case to a court that specializes in complex business matters.

UK Gambling Commission Investigation

In December 2024, the UK Gambling Commission (UKGC) launched a review into the company’s subsidiary Evolution Malta Limited regarding its operating license in the UK market.

The regulator initiated the review under Section 116 of the Gambling Act 2005 after the UKGC identified Evolution games as “being accessible from the UK through operators not holding a Commission license.”

Evolution responded by removing its content from those platforms and pledged full cooperation. In a statement, the company said:

“Evolution is cooperating fully with the Commission and has taken requested immediate actions to remedy the situation,”

“Games on the identified websites not holding a Commission license have been made unavailable from the UK. Evolution continues to actively work with the Commission to resolve this matter.”

Carlesund revealed that the UK market accounts for approximately 3% of Evolution’s revenue. The revenue announcement sent the company’s stock down more than 10% amid fears of possible fines or licensing conditions.

The UKGC’s investigation remains ongoing.

Impact on Galaxy Gaming Acquisition

In July 2024, Evolution announced an agreement to acquire Galaxy Gaming, a Las Vegas-based table games and technology provider for approximately $85 million in equity value ($124 million including net debt) — a $3.20 per share offer representing a 124% premium.

According to its website, Galaxy Gaming is the “world’s largest independent developer and distributor of casino table games and technology.” Many gamblers know the company for its patented side bets. They include the 21+3 blackjack side bet, Perfect Pairs, and Lucky Ladies.

The acquisition of Galaxy Gaming gives Evolution an expanded US footprint, as the technology provider holds licenses in 28 states. As the two companies had an existing partnership, acquiring Galaxy Gaming would also save Evolution licensing fees.

Galaxy shareholders approved in November 2024. However, the completion of the deal has been delayed due to regulatory reviews. The new target date is October 18, 2025, and possibly January 18, 2026.

However, potential regulatory scrutiny over the Black Cube allegations could impact approval timelines. Many US regulators enforce strict prohibitions against black-market associations.