Argument: Evil exists because God gave us Free Will.
The Mario Refutation: In Super Mario Brothers 3, there are several ways of completing the levels. You could go down a pipe. You could get the Fur Suit and fly over everything. You could bounce on the magic note block and run through the cloud bonus areas. You can choose between many different paths. Never do you do something which is morally evil.
Conclusion: God giving us Free Will and Evil not existing are not incompatible, because even Nintendo can do it.