‘Not a sunny day for our industry:’ Nevada gaming regulators OK another anti-money laundering fine
Frustrations boiled over last week as the Nevada Gaming Commission accepted its third stipulated settlement since March with a major casino operator accused of violating anti-money laundering policies. At least the funds will resolve a small part of the state’s budget deficit.
Casino operators need to heed the “clarion call” from the Nevada Gaming Commission: Violations of federal anti-money laundering (AML) laws will not be tolerated in the Silver State.
Last week, the commission agreed to a $5.5 million settlement with Wynn Resorts — the third in the past three months.
“This is not a sunny day for our industry. We’ve had this monthly drill of speaking about AML,” Commissioner Brian Krolicki said toward the end of the 90-minute hearing. “I believe this is a pivot. The standard for this industry is full compliance.”
He warned other operators not to go down the same path as Wynn, Resorts World Las Vegas, which agreed to a $10.5 million fine in March, and MGM Resorts International, which was assessed an $8.5 million penalty in April.
All together, the gaming commission has accepted $24.5 million from the three Strip operators in AML fines. The funds will help replenish the state's financial coffers.
Wynn agreed to the stipulated agreement eight months after the company forfeited $130 million following a “non-prosecution settlement” with the U.S. Department of Justice. More than 10 years ago, independent agents acting on behalf of Wynn Las Vegas skirted U.S. and foreign laws in facilitating unlawful money transactions from Latin America and China.
The agents worked with Wynn’s casino marketing department, a casino division that Commissioner George Markantonis said he became aware of on his first day at Caesars Palace some 30 years ago. He described how a guest he booked into an upscale room at the resort had to move because the suite was needed for a high-end casino customer who was described to him as a “gamer.”
“I came from normal hotels,” said Markantonis, who spent 17 years with Westin Hotels in non-casino markets. “I was told not to spend too much time thinking about [casino marketing]. It’s a world of smoke and mirrors. That was the exact phrase given to me.”
The commission accepted the Wynn settlement on a 4-1 vote, with Commissioner Rosa Solis-Rainey in opposition because she thought the penalty was not large enough given the allegations raised.
She outlined the activities of just one of several agents acting on behalf of Wynn Las Vegas, who conducted more than 200 transfers totaling more than $17.7 million for 50 different casino customers to and from bank accounts controlled by the resort or associated entities.
The activity, along with the $130 million forfeiture, frustrated the Las Vegas attorney, who is the longest-serving member of the five-person commission.
“The monetary settlement is very low in this case, [given] the nature of the schemes that were going on,” Solis-Rainey said. “These seem pretty egregious in terms of just the sheer number of bank transfers. I think it just warrants a higher amount. The conduct was worse than what other licensees have faced.”
Solis-Rainey has dealt with Wynn as a gaming commission member and as an attorney.
She was part of the legal team that represented Japanese billionaire Kazuo Okada, an investor in Wynn Resorts whose 20 percent stake in the company was bought out in 2018 after a six-year legal battle.
Solis-Rainey was appointed to the part-time commission in April 2019 by former Gov. Steve Sisolak, two months after Wynn Resorts agreed to pay a $20 million fine — the largest in Nevada gaming history — to settle a 10-count complaint concerning numerous allegations of sexual assault, sexual harassment and sexual misconduct by former chairman and CEO Steve Wynn.
In July 2023, Solis-Rainey disclosed her representation of Okada when the gaming commission accepted a $10 million fine paid by Steve Wynn over the misconduct allegations.
During that hearing, she called the Wynn matter “a huge blemish on the industry.” She added the disgraced gaming mogul “made some incredible contributions” to Las Vegas, but the “nature of the allegations that were made warrant at least the amount of the fine that was negotiated.”
There was confusion as to whether or not Solis-Rainey needed to again disclose her prior outside legal activities involving Wynn Resorts last week. After executive secretary Nicole Rupert introduced the Wynn Resorts settlement item, she added, “I believe we have a recusal.”
However, no commissioner stepped forward.
Commissioner Abbi Silver had previously recused herself from the Resorts World and MGM settlements because the actions involved former gaming executive Scott Sibella, with whom she described as having a “long-standing close friendship.”
Silver also initially thought the Wynn settlement was too low. However, she went along with the $5.5 million fine after being told it was more than the $2 million Las Vegas Sands paid in 2016 for similar violations of anti-money laundering law.
Bill seeking stiffer penalties for illegal gambling sites headed to the governor
A bill allowing Nevada courts to increase the fines judges can impose on illegal gambling operators is one procedural vote away from landing on the desk of Gov. Joe Lombardo.
SB256 gives judges the jurisdiction to increase penalties beyond the current $50,000 maximum for violating the state’s online gaming laws.
The legislation proposes that certain offenses be converted from misdemeanors into gross misdemeanors while adding a required “disgorgement” of any profits associated with the activity.
The bill authored by Sen. Rochelle Nguyen (D-Las Vegas) was unanimously approved by the Nevada Assembly last week after the measure’s unanimous passage by the Senate in April. The Senate has to concur on an amendment to the legislation that adds Assm. Brittney Miller (D-Las Vegas) as a co-sponsor.
The bill is supported by the Association of Gaming Equipment Manufacturers (AGEM), the Nevada Resort Association, the Nevada Council on Problem Gambling, the Vegas Chamber of Commerce and the American Gaming Association, which in a statement called Nevada “an example of leadership in effectively regulating gaming.”
Nguyen said the idea for the legislation came from discussions she had during conferences hosted by the National Council of Legislators from Gaming States and with Nevada gaming leadership.
AGEM CEO Daron Dorsey hopes the legislation will discourage illegal operators from targeting Nevada residents.
New Culinary contracts reached at Cosmopolitan, Resorts World and Reid Airport
Culinary Workers Union Local 226 had a busy week leading up to the Memorial Day holiday.
On Wednesday, the union and its affiliated Bartenders Local 165 announced a three-year contract agreement with the Cosmopolitan of Las Vegas. A day later, the Culinary said it struck a five-year deal covering HMS Host workers at Harry Reid International Airport. On Friday, the Culinary and Bartenders reached a three-year deal with Resorts World Las Vegas.
Contracts with the two resorts, which still need to be ratified by workers, bring the properties in line with all other Strip contracts that expire in 2028.
MGM Resorts International operates the Cosmopolitan, and the contract covers nearly 2,500 non-gaming workers. In a statement, Culinary Secretary-Treasurer Ted Pappageorge said the contracts are similar to the five-year deals reached in 2023 and 2024 that included 32 percent salary increases and daily room cleaning in all hotel rooms.
The Resorts World contract covers 2,000 non-gaming workers.
At Reid Airport, the Culinary Union’s contract covers 1,100 food and beverage workers and the various restaurant-style outlets inside the airport’s terminals. However, the union is continuing to negotiate a contract with fast food and quick service venues covering 400 workers.
What I'm reading
🚭 Players increasingly accept smoke-free gaming floors, revenue analysis shows — Mark Gruetze, CDC Gaming
Other than Park MGM, Strip casinos remain opposed to banning smoking on gaming floors.
⚾ Clark County agrees to $3.7M bond if A's stadium can't be completed — Matthew Seeman, KSNV-TV Channel 3
In case the stadium deal falls apart, the Athletics agreed to pay the costs for clearing the site.
🎥 Paramount plans immersive ‘Top Gun’ experience in Las Vegas — Alex Weprin, The Hollywood Reporter
Plans call for the project to be built on a site near the STRAT Hotel, Casino & Tower.
News, notes and quotes
💲 Fertitta to remain a ‘passive investor’ in Wynn Resorts
Tilman Fertitta, the largest shareholder in Wynn Resorts, doesn’t plan to exert any influence over the casino operator while he serves as the U.S. ambassador to Italy, his top executive told the Nevada Gaming Commission last week. Fertitta owns more than 13 million shares in Wynn, a stake greater than 10 percent.
“Fertitta Entertainment and Tilman remain a passive investor … as long as we believe that management is engaged in the right steps to provide value to the shareholders,” company general counsel Steven Scheinthal told the commission. He appeared alongside Paige Farwell Fertitta, Tilman Fertitta’s former wife, who was licensed as the president of the Houston-based company that oversees the Golden Nugget resorts in Las Vegas, Laughlin and Lake Tahoe.
🎰 Kindbridge Research launches problem gambling study
Massachusetts-based Kindbridge Research Institute has launched the first coordinated U.S. effort to confront gambling-related financial harm as a public health and economic stability issue. The multiyear initiative will bring together experts in finance, health care and research to develop practical strategies for reducing the financial harm that can result from gambling. As part of the initiative, researchers at UCLA will also conduct a study to understand better how gambling and financial instability intersect.
“By bringing together sectors that haven’t traditionally worked in partnership, we have a real chance to step in earlier, coordinate care and build practical responses that stabilize lives and strengthen systems of support,” said Daniel Umfleet, who is directing the study.