Online poker giant PokerStars has been accused of a €300m tax fraud by Italy’s financial police, charges the company has vehemently rejected.
On Wednesday, Italy’s Guardia di Finanza accused PokerStars of using subsidiaries of Stars’ parent company the Rational Group to “willfully erode” its Italian tax obligations for the period spanning 2009 to 2014.
The fiscal cops said the Halfords Media Italy subsidiary had used transfer pricing methods to shift Italy-generated income to other Rational subsidiaries in more tax-friendly jurisdictions in the Isle of Man and Malta, while keeping its Italian costs in the country, thereby reducing the amount it owed the Italian taxman.
The Italian police have said the managing director of PokerStars’ Italian operations would be charged with tax evasion for “the implementation of this complex criminal design.”
PokerStars, ownership of which was assumed by Canada’s Amaya Gaming last summer, issued a statement through spokesman Eric Hollreiser. “Like many other global ecommerce companies, we vigorously dispute the stance of the tax authority regarding local establishment.” Hollreiser said Stars “hope to resolve the issue in our favor soon” but in the meantime, it’s business as usual at PokerStars.it.
Stars said it had been cooperating with Italy’s tax authorities “since they launched an audit several years ago.” Hollreiser insisted Stars had “operated in compliance with the applicable local tax regulations and have paid €120m in local taxes over the period covered by the audit.”
The Italian financial cops said they discovered Stars’ alleged shenanigans as “part of a bigger operation dubbed ‘All-In.” This suggests that (a) other online gambling companies may find themselves under a similar microscope and (b) law enforcement types around the globe are simply powerless to resist the lure of the bad poker pun.