Flutter Entertainment Pays $4 Million Bribery Fine
The U.S. Securities and Exchange Commission has charged Flutter Entertainment, the Dublin-based global gaming and sports betting company and the owner of the online poker site PokerStars, with a $4 million fine for the alleged violation of the US foreign bribery law committed through the circulation of payments to consultants based in Russia.
Flutter Entertainment PLC, the gaming behemoth and the owner of PokerStars, FanDuel, Paddy Power, and other brands, has commenced a settlement with the U.S. Securities and Exchange Commission (SEC). The SEC alleges that PokerStars’ previous owner, the Stars Group, committed ”books and records and internal accounting controls violations” which arose out of the Company’s use of third-party consultants in Russia. Flutter Entertainment bought the Toronto-based Stars Group in 2020.
$8.9 million of payments over five years:
The SEC announced the settlement Monday and informed that the Stars Group paid about $8.9 million to Russia-based consultants for the support of the company’s operations and its efforts to have poker legalized in Russia. The SEC’s administrative proceeding alleges that the payments were made between May 2015 and May 2020. The proceeding alleges that those payments also covered reimbursements of gifts to Russia-based individuals.
$4 million fine with legacy claims:
Flutter neither admitted nor rejected the SEC’s allegations from the administrative proceeding but agreed to desist from future violations and pay the $4 million fine. As The Wall Street Journal reports, the company said it was pleased the matter had been concluded. “This is a legacy issue, related to a period prior to Flutter’s ownership of the Stars Group,” a spokesman said, and added: “Following our acquisition of TSG, we made significant changes to implement a framework of controls in line with Flutter’s existing standards.”
Gift and consultancy reimbursements:
Detailing the allegations, the SEC said that a part of the payments made by the Stars Group to the Russia-based third parties over the five-year period referred to New Year’s gifts to Russian government officials. Another part of the financial assets was used to reimburse a consultant’s payments to a Russian state agency responsible for administering internet censorship filters.
The company thus violated the provisions of the U.S. foreign bribery law requesting companies to maintain adequate book and record keeping, as well as compliant internal accounting controls.
The SEC acknowledged Flutter’s availability for cooperation during the proceeding, the company’s agility in serving facts developed through its own internal investigation, and the encouragement rendered to parties outside SEC authority to provide the respective evidence. The gaming company has also followed the SEC’s findings to improve its internal accounting controls and compliance. The U.S. authority also acknowledged that Flutter Entertainment withdrew from Russia after the last year’s invasion of Ukraine.