Flutter Entertainment bought PokerStars from The Stars Group in 2020. The deal increased the brand equity of Flutter Entertainment, but it also had unexpected consequences. This is according to a US Securities and Exchange Commission report. The SEC released a statement Monday claiming that it discovered that PokerStars’ previous owner, The Stars Group, had allegedly made payments to Russian third-party consultants.
According to the SEC, the payments totaling $8.9 Million were made between May 26, 2015 and May 15, 2020. According to the SEC these payments were made to support legalization of poker in Russia and thus pave the way for PokerStars. According to the SEC, the company failed to maintain “a sufficient system for internal accounting controls over its Russian operations with respect to third party consultants” during that period. The payments were used to buy gifts for Russian officials and to settle payments to Roskomnadzor, a Russian regulatory body responsible for internet censorship filters.
Cease and Desist to Resolve Matter
According to the SEC the alleged payments were a violation of the Securities Exchange Act (344) Flutter, PokerStars’ new owner agreed to end the matter via cease-and-desist. Flutter has not admitted to or denied the allegations of the SEC, but she has agreed that the matter will be closed and that a $4 million penalty will be paid. The Commission did acknowledge that Flutter had taken remedial actions and has cooperated in the matter. The company also withdrew its support from Russia in the wake of the invasion of Ukraine.
Flutter accepted the findings without admitting or denial and agreed to cease and desist any future violations. Flutter also agreed to pay $4 million in penalties.”
This is a statement from the US Securities and Exchange Commission
Flutter’s spokesperson said that the allegations were a legacy issue from before it acquired The Stars Group. Flutter acquired TSG in order to comply with its high standards.
PokerStars recently announced that it has extended its partnership to Oracle Red Bull Racing. This new collaboration was announced just in time to welcome the new Formula 1 season. It is expected that it will bring benefits for both the duo.
