Two of the UK’s largest gambling operators have been left counting the cost of a series of regulatory breaches that will see them fined mammoth sums.
The Rank Group’s subsidiary firm, Daub Alderney, have been left licking their wounds after being hit with a £5.85 million fine by the UK Gambling Commission.
But that pales in comparison to the astonishing $1.3 billion – around £942 million – that Flutter must cough up following a landmark lawsuit in America.
The story began in 2018, when officials in Kentucky fined The Stars Group for illegally offering online gambling in the state – linked to the PokerStars brand. But that was subsequently quashed in the appeals court in January 2019, and most thought that was the end of the matter.
But the Kentucky Supreme Court wouldn’t let it lie, and in December 2020 the fine was reinstated – meaning that Flutter, who have taken the reins of The Stars Group, must now pay as much as $1.3 billion due to the accrued interest on the original fine.
Flutter chiefs were fairly pragmatic about the whole affair, and claimed the fine was unenforceable because their main operations are based in the Isle of Man – outside of Kentucky’s jurisdiction.
Even so, they are getting twitchy and have appealed to the US Supreme Court to step in and review the case, which now dates back more than a decade after Steve Beshear, the governor of Kentucky, seized the PokerStars domain.
Pulling Rank
The UK Gambling Commission has warned operators that they ‘will face the full consequences of regulatory failures’ – even in situations where those breaches occurred under the tenure of a former owner.
The regulator has issued Daub Alderney with the near £6 million fine for a catalogue of social responsibility and anti-money laundering – the latter in which one player was able to deposit £50,000 into their account without any background checks being performed. It comes almost three years since the same firm was fined £7.1 million for a similar list of misdemeanours.
Daub Alderney, whose brands include Aspers, Magical Vegas and Kitty Bingo, are a subsidiary of the Rank Group, who acquired ownership in October 2019. The breaches took place prior to Rank’s involvement, but Helen Venn – the executive director at the UKGC – that the new licensee should still be held accountable for past failings.
“The Licensee does not escape or mitigate the consequences of its actions because its shares are sold. The requisite penalty reflecting that culpability, cannot be affected by the fact that its shares have now passed from one set of investors to another,” she confirmed.
“Every operator out there should be aware that we will continue to take firm action against those who fail to raise standards.”
Rank, meanwhile, have confirmed that they will appeal the decision to the First-Tier Tribunal, claiming the fine is unfair and does not reflect the ‘significant remedial actions’ they have implemented since.
“The UKGC identified concerns regarding Daub’s compliance arrangements in respect of its anti-money laundering and safer gambling controls, principally relating to activities prior to its acquisition by Rank.
“As a consequence, the UKGC levied a £3m fine on Daub which Rank does not believe fairly reflects their findings nor takes account of the significant remedial actions taken by Rank following the acquisition.”