Lithuanian regulator fines operator €8.4m over gambler suspected of embezzlement
The Lithuanian gambling regulator says the operator failed to monitor the former fund manager’s play.
Lithuania.- The Lithuanian gambling regulator LPT has issued a fine totalling nearly €8.4m in relation to the case of a former private equity fund manager accused of embezzlement. The regulator said that Olympic Casino Group Baltija (OCGB) failed to monitor the activity of Šarūnas Stepukonis.
Stepukonis is due to face trial over allegations that he embezzled around €42m from companies managed by the private equity fund BaltCap, of which he was a partner. It is believed that he gambled large amounts of embezzled money with several gambling operators.
Stepukonis was found to have gambled with Olympic Casino in Lithuania between 2016 and 2021 and to have lost up to €6.4m with the company, which also operates in Estonia and Latvia. The LPT identified five violations of Lithuania’s Prevention of Money Laundering and Financing of Terrorism Law and Gambling Law.
The regulator says Olympic Casino did not verify the source of Stepukonis’ funds and applied “poor-quality and insufficient” procedures. The operator also failed to report suspicious transactions to the national Financial Crime Investigation Service (FNTT) as required under legislation despite “obvious signs that should have raised suspicions”.
Meanwhile, the operator assigned a personal VIP manager to monitor Stepukonis’s transactions but failed to flag up any irresponsible gambling behaviour. It even gave Stepukonis €1.3m in incentives to encourage him to continue to gamble with Olympic. In order to use the bonus after Lithuania’s 2021 ban on gambling incentives, he moved his play to Estonia before the rule came into force. This was another cause for concern from the gambling regulator, which said that a Lithuanian player trying to register with Olympic Casino’s Estonian site should have been redirected to the Lithuanian domain.
LPT director Virginijus Daukšys said: “Instead of investigating whether Stepukonis had problems with gambling or informing the supervisory authority, Olympic Casino encouraged him to gamble even more. A dedicated incentive package was prepared for him. This could only be spent on gambling. Other incentive measures were also allocated.”
The regulations state that LPT can issue a fine worth up to two times the damage caused. It considered the damage in this case to be the €6.4m that Stepukonis lost to Olympic Casino. The regulator said the size of the fine reflects a lack of cooperation from the operation during its investigation of the case.
Regulatory changes for gambling in Lithuania
The LPT said that as a result of the Stepukonis case, it has decided to change its rules. It will now require all operators to take action when they notice irresponsible gambling and to pass details on the case to the LPT in real time. The regulator also plans to make more frequent scheduled inspections of gambling operators.
Just last month, the Lithuanian Ministry of Finance submitted proposed new requirements for remote gambling platforms to the European Commission (EC) for review. The new text outlines rules for IT security, game controls, technical compliance, data management and intellectual property.
The LPT will require licensed operators to ensure online platforms and systems are accredited by independent bodies and undergo certified inspections to vouch for their controls for identification and the collection of player data, including records of stakes and payouts.
Meanwhile, Lithuania is to increase the minimum age for gambling from 18 to 21 from July. The move will apply to both land-based and online gambling, except for national lottery draws, and will bring Lithuania in line with Estonia and Latvia. Belgium and Greece also have 21 as the minimum age for gambling, and the Netherlands is to consider raising the minimum age to 21 for online slots.
