Online gambling operator Stride Gaming has warned investors it expects to pay a £4m penalty for one of its subsidiaries contravening its UK license obligations.

On Wednesday, the UK-listed Stride issued a trading update previewing its final results for the 12 months ending August 31, ahead of its official annual report on November 21. The company expects revenue to come in around £85m (£3m higher than in FY17) while forecasting earnings of around £16m (down from £20m).

The company blamed the earnings shortfall on £4m in extra tax paid during the current fiscal year, part of the “backdrop of more challenging trading conditions” the company dealt with in FY18. These challenges also included “implementing further measures to ensure that Stride continues to maintain high standards in the provision of responsible gaming.”

On that last note, Stride announced in early August that the UK Gambling Commission (UKGC) had warned the company that it faced a “significant financial penalty following a review of the manner in which the Licensee has historically carried on its licensed activities.” Stride emphasized at the time that this notice wasn’t final but now appears to be taking the UKGC at its word.