Flutter pays $4 million to the United States to avoid PokerStars Russia bribery charges
Flutter Entertainment, based in Dublin, has agreed to pay the US Securities and Exchange Commission (SEC) $4 million. This is to settle claims that its flagship poker site, PokerStars, broke US bribery laws by funnelling approximately $8.9 million in payments to Russian lobbyists.
The payments were made between 2015 and 2020, when PokerStars was owned by the Stars Group, a Canadian firm that Flutter bought in 2020. The Russian government was considering allowing internet poker at the moment.
Some of the funds were used to purchase New Year's gifts for Russian government leaders. According to the SEC, it was also used to refund payments made by one consultant to Roskomnadzor, the state agency in charge of overseeing internet censorship filters.
According to the SEC, the firm violated restrictions under US foreign bribery statute. The company also "failed to both devise and maintain a sufficient system of internal accounting controls over its operations in Russia with respect to third-party consultants, as well as to consistently make and keep accurate books and records regarding its consultant payments in Russia," according to the SEC.
20 Million Participants
The Kremlin made noise about legalising and regulating online poker beginning in mid-2015. There are an estimated 20 million online poker players in the country, with some currently playing on PokerStars. At the time, operators deemed Russia a "grey market," where no regulatory or legal rules were available when it comes to foreign-based online gambling sites.
Officials from Russia's Finance Ministry agreed that the ban on live poker games had forced the activity underground and urged that it be licenced and taxed alongside the online form.
But it never happened. Despite PokerStars best efforts behind the scenes, Russia legalized sports betting instead and cracked down harder on all other forms of online gambling.
Under the settlement, Flutter, which withdrew all of its activities from Russia following the 2022 invasion of Ukraine, neither accepted nor rejected the SEC's claims.
In a statement, Flutter expressed satisfaction that the situation had been resolved, while underlining that the alleged breaches occurred under previous ownership.
This is a legacy issue, related to a period prior to Flutter’s ownership of the Stars Group,” a spokesman said. “Following our acquisition of TSG, we made significant changes to implement a framework of controls in line with Flutter’s existing standards.”
The SEC agreed that Flutter had fully cooperated with its investigation by disclosing the results of its own internal probe. It also encouraged persons who were not subject to SEC jurisdiction to give evidence. Flutter had strengthened its internal accounting controls and compliance, according to the SEC.
By fLEXI tEAM