PokerStars faces allegations of €300m fraud and tax evasion

PokerStars, the online gaming brand owned by Amaya Gaming, has been accused of large-scale fraud and tax evasion totalling €300 million ($318.4 million) by financial authorities in Italy.

According to various reports, the tax fraud was run through Malta and the Isle of Man, which in turn meant Italy missed out on a sizeable amount of tax income between 2009 and 2014.

Rome’s financial police, the Guardia di Finanza del Comando Provinciale di Roma, said PokerStars’ managing director has been accused of both fraud and tax evasion.

Authorities said the €300 million in revenue, which was earned in Italy and therefore should have been taxable in the country, was undeclared by PokerStars.

Allegations have been raised following an investigation into transactions linked to Halfords Media Italy, the Italian national subsidiary of PokerStars.

Halfords is said to have hidden taxable income by decreasing the value of services rendered to its PokerStars parent company, which in turn meant it was able to move taxable income the operators earned in Italy to Malta and the Isle of Man.

Authorities in Italy allege that Halfords purposely misreported part of its revenue in order to avoid high gambling tax rates in the country.

Investigators have claimed this was done by using transfer price methods to move income to Malta and the Isle of Man, while at the same time keeping the costs in Italy.

Speaking yesterday, Eric Hollreiser, head of corporate communication at PokerStars, is reported to have said that the company is confident that the issue will be resolved.

“PokerStars has been working with Italian tax authorities since they launched an audit several years ago,” Hollreiser said according go The Malta Independent newspaper.

“We have operated in compliance with the applicable local tax regulations and have paid €120 million over the period covered by the audit.”

PokerStars’ parent company Amaya Gaming has also issued a response to the allegations by stating that the tax dispute is not something it was aware of prior to its acquisition of the operator last year.

In a statement, Amaya said: “The tax dispute relates to operations of PokerStars dating from before the acquisition of the company by Amaya in August 2014.

“The merger agreement related to that transaction provides remedies to address certain income tax and other liabilities that might occur post-closing but stemming from operations prior to the date of acquisition, including monies held in escrow as initial sources for indemnification.

“The current tax dispute is something Amaya was aware of prior to the transaction.

“Amaya does not anticipate that these tax issues would apply to future fiscal periods.

“The company’s operations continue as usual on www.pokerstars.it and it remains focused on delivering the most popular online poker service in the Italian market.”