Lithuania’s Olympic Casino Group Baltija has been slapped with a substantial €8.4 million fine following a major investigation into its operations by the country’s Gaming Control Authority. The fine relates to regulatory breaches identified during the management of accounts held by Šarūnas Stepukonis, a former partner at BaltCap Fund, who is accused of misappropriating funds from the company.

The investigation, spearheaded by Lithuania’s Gaming Control Authority, pinpointed several significant regulatory failings by Olympic Casino. Notably, the casino did not adequately monitor transactions or the origins of funds associated with Stepukonis, who reportedly embezzled around €42 million from several companies. This oversight occurred despite Stepukonis’ high-volume gambling activities between December 2016 and June 2021, according to LRT.

Detailed Account of the Investigation

The case began to unfold publicly in January when allegations against Stepukonis were first revealed. He is now awaiting trial for his involvement in what appears to be an extensive embezzlement scheme. During his tenure at BaltCap, he allegedly diverted substantial funds, gambling away millions across various platforms, including Olympic Casino.

According to Virginijus Daukšys, director of the Lithuania Gaming Control Authority, Olympic Casino failed across multiple areas of compliance. This includes inadequate monitoring of player behavior and the source of their funds, which should be part of a robust anti-money laundering protocol. The casino also failed to report suspicious transactions to the Financial Crime Investigation Service (FNTT) as required by law.

The casino’s approach to monitoring was deemed insufficient and formal, with little to no real checks on potentially illegal activities. This lax oversight allowed Stepukonis to continue his gambling spree unchecked, leading to significant financial losses that Olympic Casino is now accountable for.

Incentives and Irresponsible Gambling

A particularly contentious issue was the casino’s decision to offer Stepukonis a €1.3 million incentive package to continue gambling. This package came into the spotlight particularly because it was offered just before a new regulation banning such incentives was implemented in mid-2021. This timing allowed Stepukonis to transfer his gambling activities to Estonia, where he could still benefit from the bonus, circumventing the imminent Lithuanian law.

This failure to redirect a Lithuanian player from an Estonia-facing site back to the Lithuanian domain was a direct violation of national regulations aimed at preventing such circumventions. It highlighted a grave oversight and mismanagement on the part of Olympic Casino, according to the Lithuania Gaming Control Authority.

Consequences and Reforms

The hefty fine imposed on Olympic Casino is calculated at nearly double the estimated damage caused by Stepukonis’ gambling activities, which amounted to approximately €6.4 million. The fine also includes penalties for the casino’s non-cooperation during the investigation.

In response to this case, the Lithuania Gaming Control Authority has announced plans to tighten regulations and increase oversight of gambling operations. This includes more frequent inspections and mandatory reporting by casinos of any suspicious or irregular gambling activities directly to the authority in real-time, ensuring faster response and prevention of similar cases.