MGM Resorts Settles Illegal Bookmaking Issues in Nevada

As the proliferation of online sports betting continues throughout the U.S., retail and online sports betting operators are being pressured to do more to discourage illegal betting. That's very evident in Nevada where MGM Resorts has finally just reached a settlement with the Nevada Gaming Commission (NGC) related to illegal bookmaking activities.

The settlement starts with a fine of $8.5 million, which the retail and online sports betting operator has agreed to pay. The operator will also be required to improve its controls related to monitoring efforts targeting illegal sports gambling and money laundering.

As part of the "friendly" settlement, the NGC made a point to stress that MGM Resorts has a history of compliance when it comes to looking out for illicit betting action across its retail and online (BetMGM) operations. The two incidents cited in the settlement were written off as sloppy work done by a couple of bad actors who were able to avoid detection. With new monitoring protocols in place, management at MGM Resorts and BetMGM are confident no further issues will arise.

About the Illegal Betting Actions

In Las Vegas, retail sports betting operators are required to be on the lookout for known illegal bookmakers. Illegal bookmakers will often use retail and online betting sites to lay off large sports bets that put them in an undesirable risk situation.

In the complaint that led to the settlement, the Nevada Gaming Control Board (NGCB) cited the illegal betting activities of two individuals: Wayne Nix and Matthew Bowyer. The illegal betting activities were facilitated by employees at the company's three main Las Vegas properties: MGM Resorts International, the MGM Grand, and The Cosmopolitan of Las Vegas. The complaint further alleges that the acceptance of suspicious wagers came as a result of deficiencies within MGM Resort's anti-money laundering program.

It's noteworthy that the incidents that took place occurred between 2015 and 2018. That was long before retail and online sports betting was legalized across the nation in 2019. Since that time, MGM Resort's management has been able to institute better controls, something that members of the NGCB noted during the hearing.

While the settlement was necessary, it's clear that the NGCB put the blame for these issues on the shoulders of one or two bad apples who had effectively tarnished years of good compliance work by MGM Resorts.

The Sibella Effect

Evidence shows that MGM Resorts flew onto the radar of Nevada regulators due to the actions of former President and COO Scott Sibella. The executive served in those roles for 8 years starting in 2011 and ending in 2019. He was alleged to have allowed Nix to place large wagers with illegal cash, also getting casino comps in the process.

While Sibella eventually pleaded guilty to violating the Bank Secrecy Act, he claimed to be a scapegoat and “blamed the violations on subordinates who failed to file a suspicious activity report.” Both Bowyer and Nix have been convicted of illegal bookmaking with both men still awaiting sentencing.