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MGM board member Barry Diller moves from restricted to unlimited gaming licensed

Gaming regulators said a letter from the SEC and a condition added by the control board satisfied concerns regarding a now-closed insider trading investigation.
Howard Stutz
Howard Stutz
EconomyGaming
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Nearly 24 months after media mogul Barry Diller was granted a restricted, two-year license by state gaming regulators due to concerns about an insider trading investigation, the billionaire investor now has unlimited approval as an MGM Resorts International board member.

However, in its 4-1 approval vote Thursday, the Nevada Gaming Commission did leave a condition on the license the Gaming Control Board recommended two weeks ago. Diller and his attorneys need to notify regulators within 48 hours if anything changes surrounding the now-closed Securities and Exchange Commission (SEC) investigation into questionable stock purchases.

Commissioner Rosa Solis-Rainey voted against the nonrestricted license, saying there wasn’t “some caveat that if there's any settlement, prosecution or anything like that, then he comes before us.” She added, “In no way do I want to impugn his character [and] his history of service both to his communities or to his businesses.”

However, early in the 15-minute hearing, commission member Abbi Silver said, “I'm confident there doesn't even need to be a condition.”

Silver, a former Nevada Supreme Court justice and Clark County district judge who was participating in her first meeting since being appointed last month by Gov. Joe Lombardo added, “I'm satisfied just by the letter and then our further investigation into it.”

During the control board hearing, MGM Resorts attorneys said Diller, 82, who has a net worth of $4.1 billion according to Forbes, was informed by the SEC that it had closed an investigation into the insider trading matter that began two years ago with the recommendation that no enforcement action be taken. 

However, the control board added the license condition because the matter could be reopened by either the SEC or the Department of Justice (DOJ).

Diller, who testified by video conference, said the SEC’s conclusion of the insider trading probe meant there wasn’t much more he could tell commissioners.

“The process was very cumbersome in terms of records and all sorts of information that we supplied,” Diller said. “I did one interview with government representatives and I think [they were] satisfied with the answers that I gave. I'm glad it's finished.”

Diller is chairman of IAC/Interactive Corp., a holding company with more than 150 digital products and brands including People Magazine and The Daily Beast. IAC is the largest shareholder of the Las Vegas-based casino giant, having increased its ownership from 14 percent two years ago to nearly 20 percent.

Nevada Gaming Commission member Rosa Solis-Rainey during a hearing on Feb. 17, 2022. (Jeff Scheid/The Nevada Independent)

“I appreciated the thoughtful conversation by the Gaming Control Board,” said gaming commissioner Brian Krolicki. “You're eminently qualified. It’s good to have you in the MGM boardroom.”

Diller, entertainment mogul David Geffen and Alexander von Furstenberg — the son of Diller’s wife, fashion designer Diane von Furstenberg — were being investigated by federal prosecutors over stock they purchased in Activision Blizzard Inc. in January 2022, days before the video game developer agreed to be acquired by Microsoft Corp. 

According to The Wall Street Journal, the three realized a $60 million profit when the firm was sold a few days after the purchase. Diller, in a 2022 interview with The Wall Street Journal, referred to the transaction as “simply a lucky bet,” saying none of the men had any material, nonpublic information about the deal.

Diller’s gaming commission hearing two years ago became heated. As the panel debated limiting the license, he blurted out, “It’s not fair,” and left the room shortly after the vote.

An MGM attorney Thursday told the commission that after the panel ruled on the matter two years ago, gaming commissions in Massachusetts, New Jersey, Maryland, Michigan and Louisiana granted Diller unlimited gaming licenses.

Gaming Commission Chairwoman Jennifer Togliatti and Solis-Rainey were the two members of the current board who participated in Diller’s hearing two years ago. Togliatti said the commission had to balance its decision, “knowing that the federal government can and do take as long as they choose to undertake certain investigations.”

Togliatti added, “The [SEC] letter speaks for itself and that definitely has an impact here today.”

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