One of the largest UK gambling operators will be forced to pay $4 million as part of a settlement with the US Securities and Exchange Commission over allegations that the company breached foreign bribery law by handling payments to consultants based in Russia.
Dublin-based Flutter Entertainment, which some of the most popular brands on the international gambling market, such as Paddy Power, PokerStars, FanDuel, etc., reached an agreement with the Government agency over the violations mentioned above by the previous owner of its PokerStars brand – the Stars Group. Flutter acquired the company in 2020.
The US Securities and Exchange Commission officially announced the settlement earlier this week. At the time, the Government agency revealed that the Stars Group paid approximately $8.9 million to Russia-based consultants when it started campaigning in favor of poker legalization in the country. Allegedly, the payments were made in the period from 2015 to 2020.
Under the settlement terms, Flutter Entertainment neither agreed with the allegations of the US Securities and Exchange Commission nor rejected them. The British and Irish gambling company shared it was pleased that the “legacy issue”, related to a period preceding Flutter Entertainment’s ownership of the Stars Group, was finally solved. After the completion of the takeover deal in 2020, the Dublin-based company made significant changes to make sure the new assets met its existing standards.
Flutter Entertainment Spent Millions on Gifts and Reimbursements of Russian Consultants
Some of the money that the Stars Group allegedly paid out was spent on New Year’s gifts to Russian Government officials. Another part of the money was used as reimbursement of a consultant’s payments to a state agency in Russia. As revealed by the US Securities and Exchange Commission, the gambling operator breached rules some of the US foreign bribery law rules that require companies to make sure their internal accounting controls are in line with the country’s legislation.
As mentioned above, the gambling company failed to devise and keep a reasonable system when it comes to international accounting management that is in control of its relationship with Russian consultants and the payments that have been initiated by it. The agency found that Flutter Entertainment failed to adequately record and monitor such payments in its books, which resulted in certain shortcomings in the company’s processes.
For example, in one case, the gambling operator paid a total of approximately $461,000 for reimbursements of Russian consultants but they lacked documentation. The company also paid $2 million across a number of payments to a consulting agency registered in Belize and banking in Latvia but the investigation found no evidence that the business delivered the services it was supposed to.
The Government agency acknowledged that Flutter Entertainment had cooperated during the investigation by sharing facts developed in its own internal probe and encouraged foreign parties outside the jurisdictions of the US Securities and Exchange Commission to provide evidence on the matter. The British and Irish gambling giant also strengthened its compliance and internal accounting controls.
Flutter Entertainment withdrew its operations from the Russian market after the country’s 2022 invasion of Ukraine.
- Author
Olivia Cole
