Olympic Casino fined €8.4 million in Lithuania over Stepukonis embezzlement case
Šarūnas Stepukonis, a former partner at BaltCap Fund, is the businessman at the centre of the case. He gambled with Olympic Casino, which operates land-based and online casino brands across Lithuania, Estonia and Latvia, between 2016 and 2021.
Stepukonis is suspected of embezzling around €42 million from several companies managed by BaltCap. Of this, large amounts were gambled away through various operators.
The allegations were made public in January this year and Stepukonis will soon face trial over the matter.
The fine is in part based on Stepukonis losing up to €6.4 million with Olympic Casino and the operator’s failure to cooperate with the regulator during its investigation.
What did Olympic Casino do wrong?
Detailing the case last week, the LPT found Olympic Casino breached several regulations related to player monitoring. This includes failing to verify source of player funds, to ensure they are not coming from criminal activities. On this, the LPT said the measures applied by the operator were “poor-quality and insufficient”.
The regulator also flagged how Olympic Casino did not report suspicious transactions to the country’s Financial Crime Investigation Service (FNTT). Licensed operators are required to do so if they have any concerns over a player’s activity.
“Stepukonis’ transactions had obvious signs that should have raised suspicions against the gambling operator,” the LPT said in a statement. “However, the FNTT was not informed about this.”
On top of this, the LPT said Olympic Casino failed to notice Stepukonis’ irresponsible gambling behaviour. This was despite him being assigned a personal VIP manager, who monitored all his transactions.
Regulator raps Olympic Casino for €1.3 million incentive
Aside from monitoring failures, the LPT also noted how Olympic Casino provided Stepukonis with a €1.3 million incentive package to continue gambling.
Since mid-2021, licensed operators in Lithuania have been barred from providing users with a financial incentive they can gamble and lose. Stepukonis transferred his gambling activities to Estonia just before this rule change came into effect, so he could use the bonus.
On this, the LPT said a Lithuanian player trying to attempt to register with the Estonia-facing Olympic Casino site should be redirected to the Lithuania domain. However, in the case of Stepukonis, this redirection did not take place.
“Instead of finding out whether Stepukonis had problems with gambling or informing the supervisory authority, Olympic Casino encouraged him to gamble even more,” LPT director Virginijus Daukšys said.
“An individual incentive package was prepared for him. This could only be spent on gambling. Other incentive measures were also allocated.”
Stepukonis lost €6.4 million
Concluding its investigation, the LPT said it identified a total of five violations of the law on the prevention of money laundering and financing of terrorism, as well as the law on gambling.
In line with national law, the LPT is permitted to issue a fine up to two times the “damage” caused. With Stepukonis, he lost a total of €6.4 million gambling with Olympic Casino and this amount was classed as the damage.
Olympic Casino did not cooperate during the investigation, which led the LPT to include an aggravating circumstance when calculating the fine.
The case also led the LPT to make changes to its own operations and rules to help prevent similar incidents. These include requiring operators to take action after noticing irresponsible gambling and providing the LPT with information about the case in real time.
“Until now, there was no such obligation,” Daukšys said. “Therefore, the LPT did not have information that would allow it to take preventive actions in advance.”
The LPT also committed to more frequent scheduled inspections of gambling operators. In addition, the Lithuania ministry of finance audited the regulator but did not find any significant operational deficiencies.