Flutter Entertainment, the global gaming and sports betting company based in Dublin and the owner of PokerStars, has been charged by the US Securities and Exchange Commission (SEC) for alleged violations of the US foreign bribery law, resulting in a $4 million fine. The SEC claims that the company, which also owns other popular brands such as FanDuel and Paddy Power, committed “books and records and internal accounting controls violations” through the use of third-party consultants in Russia, a practice that allegedly took place between May 2015 and May 2020. Flutter Entertainment purchased the Toronto-based Stars Group, which previously owned PokerStars, in 2020.
According to the SEC, the Stars Group paid approximately $8.9 million to Russia-based consultants for the support of the company’s operations and efforts to have poker legalized in Russia, including reimbursements of gifts to Russia-based individuals. A portion of these payments also allegedly reimbursed a consultant’s payments to a Russian state agency responsible for administering internet censorship filters. Flutter Entertainment neither admitted nor rejected the SEC’s allegations from the administrative proceeding but agreed to pay the fine and desist from future violations.
Flutter Entertainment confirmed that this is a “legacy issue” that occurred before the company’s ownership of the Stars Group. Following the acquisition of TSG, Flutter Entertainment claims to have made significant changes to implement a framework of controls that are in line with its existing standards. The company has cooperated with the SEC during the proceeding, provided facts through its internal investigation, and encouraged parties outside SEC authority to provide evidence. The gaming company has also followed the SEC’s findings to improve its internal accounting controls and compliance.
The SEC also acknowledged that Flutter Entertainment withdrew from Russia following last year’s invasion of Ukraine. The company’s spokesman said that the company is pleased that the matter has been concluded. Flutter Entertainment’s owned brands continue to operate in several countries worldwide.
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