PokerStars owner Mark Scheinberg has been ordered to pay $4m in settlement fees by the US Securities and Exchange Commission (SEC) in relation to violations made by the company’s former owner, Stars Groups (TSG).
The US Federal Government has accused Stars Groups of handling payments to Russia-based consultants in a manner that violated foreign bribery laws. Flutter bought the Toronto-based company in 2020 and also owns PokerStars.
The SEC announced the settlement on Monday, stating that TSG paid about $8.9m to Russia-based consultants as it pushed for the legalization of poker in that country. These alleged payments occurred between 2015-2020.
Flutter neither admitted to nor denied the accusations made by the SEC and only stated that it was pleased that the matter had been concluded.
A Flutter spokesperson said: “This is a legacy issue, related to a period prior to Flutter’s ownership of the Stars Group. Following our acquisition of TSG, we made significant changes to implement a framework of controls in line with Flutter’s existing standards.”
Some of the money that the TSG allegedly paid out went to New Year’s gifts to Russian government officials and toward reimbursing a consultant’s payments to a Russian state agency, according to the SEC.
The company violated rules under US foreign bribery law that requires businesses to maintain adequate internal accounting controls. This infraction is seen as an external breach of accounting controls.
The SEC acknowledged Flutter’s cooperation during its investigation, saying Flutter had shared facts developed in its own internal investigation. Furthermore, Flutter encouraged parties outside SEC jurisdiction to provide evidence.
Flutter withdrew from Russia after its 2022 invasion of Ukraine.
