The U.S. Securities and Exchange Commission (SEC) announced that Flutter Entertainment has agreed to pay a $4 million in settlement to address violations of U.S. securities laws.
The settlement, which came to light from the SEC this morning, concerns violations of the Exchange Act by Flutter’s Russian gaming affiliate, PokerStars.
An investigation by the US Financial Markets Authority found that between May 2015 and May 2022, PokerStars paid approximately $8.9 million to Russian consultants to support the company’s operations and efforts to legalize poker in the country.
The US Securities and Exchange Commission accused PokerStars operator, The Stars Group Inc, of failing to comply with internal controls over the company’s activities in Russia, and that its accounting department had inaccurately disclosed payouts to Russian advisors.
An investigation into the company’s ties to Russia found that the payments included the reimbursement of annual gifts to private individuals, including Russian government officials, which in itself is a violation of Flutter’s policy.
Flutter also reimbursed consultant payments to Roskomnadzor, the Russian state agency responsible for internet censorship.
The SEC contends that between 2015 and 2020, PokerStars did not develop and maintain adequate internal accounting controls for its third party advisory operations in Russia and did not maintain accurate books relating to its advisors.
In response, Flutter did neither confirm nor deny the allegations, but agreed to pay a $4 million in settlement and stop interacting with Russian third parties.
The SEC also noted Flutter’s cooperation and corrective action and the withdrawal of all brands from Russia after the invasion of Ukraine last February, which was supported by the entire betting industry.
In March 2022, PokerStars announced its full withdrawal from the Russian market as global companies began imposing international sanctions on the Russian government and economy following the illegal invasion of Ukraine.
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