Exclusive: STS sues Kindred Group for accepting Polish players

STS S.A. has filed a lawsuit in Poland against Kindred Group’s Unibet brand for allegedly breaking Polish law concerning illegal gambling, EGR can exclusively reveal.

It is alleged Unibet has been serving consumers in the country via its Malta-licensed Trannel International Ltd subsidiary but in the eyes of STS, this violates Polish law as the Kindred-owned brand does not hold a specific Polish licence.

STS believes Unibet is circumventing the law by offering its services to Polish consumers and conducting regular marketing activities in Poland.

The Polish bookmaker also argues that Unibet breaks Polish law by repeatedly advertising on the shirts of foreign clubs that play fixtures in Poland, for example in Champions League or Europa League competitions.

STS claims the fact that the Unibet website is available in Polish, along with the fact its domain name has changed several times to bypass IP blocking by the Ministry of Finance, are direct contraventions of regulations.

Lastly, the operator claims that Unibet exposes clients to fiscal responsibility, as Unibet claims it has an international licence, which STS states doesn’t exist.

The District Court in Warsaw decided on 7 December 2021 that Unibet was prohibited from offering betting services and advertising in Poland and was in violation of the Polish Gambling Act.

A freezing order was issued to Unibet which means, until the final decision is made in a higher court, Unibet has to stop offering its services in Poland, but the lawsuit says Unibet has continued to offer services in the country.

Due to this, STS is now taking Unibet to court, as it has yet to adhere to the decision of the District Court, almost 12 months after its initial verdict.

In accordance with Polish law, if the court sides with STS, Unibet could be hit with a fine of PLN28.9m (£5.31m).

When supplied with the court documents, Kindred subsidiary Trannel International Ltd refused to accept them as they were written in Polish, which is not a legal language in Malta.

STS has indicated that it may not be the only operator launching this kind of action against Unibet.

EGR understands that other unnamed legal operators are seriously considering joint action against Unibet.

The Polish market was regulated in 2017 and is under the stewardship of the Ministry of Finance, with STS operating as the largest licensed bookmaker, as online casino is not permitted alongside sports betting in licensed operators’ offerings.

In a paper published last year by Poland’s former Finance Minister, Konrad Raczkowski, only two of the 20 companies with licences in Poland turned a profit, primarily due to the exorbitant 12% tax on turnover, which equates to a 55%-65% tax on gross gaming revenue (GGR).

This has led to Poland having one of the worst channelisation rates in Europe, with around 20% of bettors using websites neither licensed, regulated nor taxed in the country, says Raczkowski who has called for the controversial turnover tax to be supplanted by a 20% tax on GGR.

Zdzisław Kostrubała, a member of the board of STS, said: “While some gambling companies, after the entry into force of the 2017 amendment to the gambling act, withdrew from illegally offering gambling games in the territory of Polish companies, Unibet continues to provide services in Poland, clearly violating the provisions of Polish law.”

Kindred Group provided no comment when approached by EGR.

This action aligns with what STS CEO Mateusz Juroszek told EGR in an exclusive interview in October. Juroszek said: “I think our issue is that there are still companies, such as Kindred, Betsson and 1xBet, who operate in Poland on the black market when compared to what is visible on the governmental website.

“I don’t understand how they can if there is regulation in Poland and it is notified by the European Union. But these companies currently operating in Poland are breaking the law. I don’t understand how this can work, so it shows there is still work to be done.”