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The state of Nevada has formalized a settlement with MGM Resorts, in an investigation pertaining to two illegal bookmakers who were allowed to gamble at its properties. The settlement includes an $8.5 million fine.
However, as they voted to accept the settlement at a meeting on Thursday, regulators at the Nevada Gaming Commission lauded MGM’s historical track record of compliance and chalked the failures up to individual bad actors. The investigation arose in the wake of former MGM Grand President Scott Sibella pleading guilty to violating the Bank Secrecy Act for failing to flag suspicious transactions by one of the two bookmakers.
The settlement also includes new monitoring at MGM Resorts in the state but incorporates the actions that MGM has already taken to improve its anti-money laundering controls. The new staff, systems, and training that MGM has put in place could become models for other gaming licensees in Nevada.
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According to an April 18 press release from the Nevada Gaming Control Board, the settlement concerns a complaint that “alleges unsuitable methods of operation arising from the activities of illegal bookmaker, Wayne Nix” and “details the activities of another illegal bookmaker, Mathew Bowyer.” The release continues to state that “the Complaint’s allegations center on the actions and failures of MGM Resorts International’s, the MGM Grand’s, and The Cosmopolitan of Las Vegas’ (MGMRI) employees in relation to Mr. Nix and Mr. Bowyer, as well as deficiencies within MGMRI’s anti-money laundering program.”
On Thursday, the Nevada Gaming Commission (NGC) voted unanimously to accept the settlement. During the hearing, commented on the changes that MGM has made since the incidents in question took place between 2015 and 2018.
For example, NGC Chair Jennifer Togliatti stated her belief that MGM operates a “cutting-edge compliance program” while Commissioner Brian Krolicki likened the situation to one bad apple ruining MGM’s “years of great work.”
Counsel for MGM present at the meeting stressed that MGM has changed policies and increased training for staff related to money laundering. MGM also pointed to bringing on new staff dedicated to compliance and hiring independent auditors to test the controls at its properties.
Monitoring by Nevada regulators regarding money laundering violations will continue at MGM Resorts properties as part of the settlement but otherwise, the instance is largely in MGM’s rearview mirror. Details of the incidents suggest that the actions of multiple MGM employees failed in their duties and ability ultimately lay at the feet of the former President of the MGM Grand, Scott Sibella.
Sibella shifts blame for violations to casino hosts
Sibella served as the president and COO of the MGM Grand for eight years before departing in 2019 to take a similar position at Resorts World Las Vegas. According to Richard N. Velotta of the Las Vegas Review-Journal, investigations alleged that Sibella allowed “Nix to present illicit proceeds to the casino” and provided Nix “complimentary benefits at the casino…to further encourage Nix to patronize the casino and spend his illicit proceeds at the casino.”
Velotta adds that “Nix traveled frequently from his home in California to casinos in Las Vegas with illicit cash proceeds, typically comprising high-denomination bills, and that at times, he brought the cash in duffel bags, brown paper bags or leather purses to casinos for deposit.”
Sibella has faced both criminal penalties and consequences related to his career in the gambling industry as a result of these allegations. Velotta reports that he was fined $9,500 and put on probation for a year.
Additionally, the NGC fined Sibella $10,000 and revoked his gaming license for a minimum of five years.
According to Greg Haas of 8 NewsNow, Sibella characterized the situation as regulators making him a scapegoat and “blamed the violations on subordinates who failed to file a suspicious activity report.”
Both Bowyer and Nix have pleaded guilty to illegal bookmaking charges but have yet to be sentenced.
Aside from the enhanced monitoring and paying the fourth-largest fine the NGC has ever handed out, MGM appears ready to move on from these incidents.
If commissioners’ assessment of MGM’s new protocols are accurate, it will be much more difficult for bad actors to replicate such violations at MGM Resorts properties.
