Flutter enters $4M settlement with U.S. over Russia payments
The Securities and Exchange Commission has charged Flutter Entertainment, plc, an Ireland-based global gaming and sports betting company and the successor-in-interest to The Stars Group, Inc, with books and records and internal accounting controls violations arising out of the Company’s use of third-party consultants in Russia.
According to the SEC’s order, at all relevant times, the Company operated a number of gaming brands, including the PokerStars online poker website. The order finds that between May 26, 2015 and May 15, 2020, while the Company’s shares were registered with the SEC, the Company paid approximately $8.9 million to consultants in Russia in support of the Company’s operations and its efforts to have poker legalized in that country.
The SEC’s order further finds that, during this time period, the Company failed to both devise and maintain a sufficient system of internal accounting controls over its operations in Russia with respect to third-party consultants, and to consistently make and keep accurate books and records regarding its consultant payments in Russia. According to the order, contemporaneous emails indicate that those payments covered, among other things, (i) reimbursement for New Year’s gifts to individuals including Russian government officials, which relevant Company policies prohibited, and (ii) reimbursement of a consultant’s payments to Roskomnadzor, the Russian state agency responsible for administering internet censorship filters.
The SEC’s order charges Flutter, as successor-in-interest due to its acquisition of the Company in May 2020, with violations of Sections 13(b)(2)(A) and 13(b)(2)(B) of the Securities Exchange Act of 1934. Without admitting or denying the findings, Flutter agreed to cease and desist from future violations. Flutter further agreed to pay a penalty of $4 million. The SEC’s order noted Flutter’s cooperation and remedial efforts, as well as Flutter’s subsequent withdrawal from the Russian market following Russia’s invasion of Ukraine in early 2022.
The SEC’s investigation was conducted by Benjamin Brutlag and Sarah Lamoree. The investigation was supervised by J. Lee Buck II and Melissa Hodgman. The SEC appreciates the assistance of the Québec Autorité des Marchés Financiers, the Latvia Financial and Capital Market Commission, the Belize International Financial Services Commission, the United Kingdom Financial Conduct Authority, the British Virgin Islands Financial Services Commission, the Central Bank of Armenia, the Czech National Bank, the National Bank of Georgia, and the Cyprus Securities and Exchange Commission.