PokerStars accused of tax evasion by Italian authorities
Operator denies all allegations as Italian police accuses it of using subsidiary Halfords Media Italy to hide undeclared revenues
PokerStars has strenuously denied any wrongdoing after Italy’s financial police today accused the operator of committing fraud and tax evasion over a six year period.
In a statement released this morning, Italy’s Guardia di Finanza alleged PokerStars had used fellow Rational Group subsidiary Halfords Media Italy to hide away undeclared revenues worth over 300m.
However, PokerStars’ head of corporate communications Eric Hollreiser has strongly refuted the allegations and said the firm had been working with authorities to help resolve the issue.
“PokerStars has been working with Italian tax authorities since they launched an audit several years ago,” Hollreiser said. “We have operated in compliance with the applicable local tax regulations and have paid 120m in local taxes over the period covered by the audit.
“Like many other global ecommerce companies, we vigorously dispute the stance of the tax authority regarding local establishment.
“The audit is ongoing and we hope to resolve the issue in our favour soon. Our operations continue as usual on www.pokerstars.it we remain focused on delivering the most popular online poker service in Italy,” he added.
But the police said an investigation into transactions between Halfords Media and Isle of Man-registered PokerStars between 2009 and 2014 showed the company had “wilfully eroded” its Italian tax base and shifted income generated in Italy to the more tax advantageous jurisdictions of Isle of Man and Malta.
And it added the managing director of PokerStars Italian operations would now face charges of tax evasion, although no changes have yet been filed.
“The implementation of this complex criminal design was made possible thanks to the top-position assumed in all subsidiaries by the sole director of the group – now sued for tax evasion,” the police said in the statement.
The police said the alleged evasion was discovered as part of wider Italian tax clampdown dubbed ‘ALL-IN’ which aims to recover receipts from the undeclared income of multinational companies.
Parent company Amaya stressed that the tax dispute relates to operations of PokerStars dating from before its acquisition of the company 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,” it said in a statement.
“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.”