Flutter will pay another fine for its acquisition, The Stars Group. This is due to Flutter’s activities prior to the purchase of the company.
Securities and Exchange Commission (SEC ) announced Tuesday, that Flutter would have to pay a $4million fine for how TSG conducted Russian business between 2015 and 2020. According to the filing, TSG violated Federal Corrupt Practices Act. Flutter was issued a cease-and-desist order. Flutter agreed to pay the fine, but did not admit to any wrongdoing.
The filing describes the TSG parent company Oldford Group as well as the Russian consulting relationship that Oldford Group inherited when it was purchased by Amaya in 2014.
According to the SEC, the company spent $8.9 million on these consultants to obtain improperly documented services in relation to its business in Russia. The SEC alleged that Amaya had done little due diligence before deciding to continue the relationship with Oldford Group’s trio of consultants. One example is that a consulting firm had an address in Belize, and a bank account Latvia even though it was exclusively focused on Russian markets for TSG.
The company also accepted vague invoices from consultants which could not be linked to work product. Although the company claimed that $1 million was paid for lobbying in the country, there was no documentation to clarify what lobbying was and why it was so expensive.
In the filing, it was also mentioned that gifts given to Russian decision-makers on behalf of the company would be refunded.
“From March 2017 through January 2018, Consultant C received six payments of approximately $139,000 as lobbying fees and costs. There was no supporting documentation.” Emails indicate that Consultant C received funds to reimburse him for gifts he gave to Russian officials in the New Year. This is contrary to Company policies.
The company implemented a system to control internal incidents after the acquisition of Flutter. This was done under the watchful eye of the new regime. Flutter was warned by the SEC to stop and desist from any future behavior as described in the complaint.
PokerStars’ Russian business was suspended in March 2022 to support Ukraine. The company has not yet to re-enter this market.
Flutter’s $4 million fine is insignificant compared to the $300 million Flutter is liable for in connection to the successful lawsuit of PokerStars against the State of Kentucky. This lawsuit was settled in 2021 ten years after its original filing.
In October 2019, Flutter purchased The Stars Group, worth $6 billion. This deal did not only include PokerStars, but also FOX Bet and Sky Betting and Gaming.
