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MGM Resorts Hit With $8.5 Million Fine in Major Money Laundering Case

MGM Resorts International has recently agreed to settle allegations made by the Nevada Gaming Control Board (NGCB) with a fine of $8.5 million. This fine is part of a resolution to the company’s failure to prevent illegal bookmaking operations that were using MGM’s Las Vegas Strip casinos to launder large sums of money. The allegations, which come from a 10-count complaint filed by the NGCB, primarily focus on the company’s failure to comply with anti-money laundering (AML) regulations, specifically those outlined in the Bank Secrecy Act. The complaint and settlement will be reviewed by the Nevada Gaming Commission on April 24, and if approved, will conclude the state’s investigation into MGM Resorts’ involvement in illegal gambling activities.

The fine comes as a result of extensive violations tied to Wayne Nix, a former minor league baseball player turned illegal bookmaker, and Mathew Bowyer, another convicted bookmaker, who are alleged to have been involved in money laundering activities at MGM properties. These activities occurred in 2018 at the MGM Grand Las Vegas and The Cosmopolitan of Las Vegas, which are both owned and operated by MGM Resorts. Scott Sibella, the president of MGM Grand at the time, was responsible for overseeing operations at these properties, and his actions are central to the investigation.

The complaint filed by the NGCB details how Nix and Bowyer facilitated the laundering of millions of dollars in cash transactions, which went largely unreported, through MGM Resorts properties. According to regulators, these unreported transactions, involving illegal bookmaking, violated several key aspects of anti-money laundering regulations. Specifically, the complaint outlines how both Nix and Bowyer made large cash deposits at MGM casinos, where the money was then used to facilitate illegal bets, with the gambling proceeds being paid out in unreported cash payments.

Illegal bookmaking operations typically involve individuals or organizations taking bets on events like sports games and using casinos or other financial institutions as a means to launder the proceeds. In this case, Nix and Bowyer allegedly used MGM properties as part of a larger illegal network that allowed them to gamble and transfer illicit funds without detection by regulatory authorities. This underscores the need for casinos and other financial institutions to have robust anti-money laundering programs to identify and prevent such illegal activities.

MGM Resorts’ Role and the Fallout from the Scandal

The fallout from the scandal was significant for MGM Resorts. The company faced heightened scrutiny from regulators, who were particularly focused on its failure to adhere to AML regulations. The alleged violations took place while Scott Sibella was president of MGM Grand, and the actions under his watch raised serious concerns about the oversight of anti-money laundering measures at MGM properties. Sibella’s role is crucial in understanding the scope of the violations, as his leadership and failure to act responsibly contributed to the company’s involvement in this illegal activity.

In response to the allegations, Sibella was fired from his role at Resorts World Las Vegas in 2023, a move that reflected the seriousness of the violations that occurred under his leadership at MGM Grand. Following his dismissal, Sibella was placed on Nevada’s “Gray List” of unsuitable gaming license applicants, effectively barring him from reentering the gaming industry in Nevada for five years. This move is part of Nevada’s broader effort to maintain integrity and compliance within the state’s gaming industry, particularly as it relates to AML practices.

In a separate case, Sibella admitted his guilt for violating the Bank Secrecy Act in federal court. While he avoided jail time, Sibella was sentenced to a year of probation and ordered to pay a $9,500 fine. In addition, he reimbursed Nevada’s regulatory investigation with a $10,000 payment. These legal consequences have added to the mounting pressure on MGM Resorts, with the company facing significant reputational damage as a result of the scandal. Additionally, Resorts World Las Vegas, under Sibella’s leadership, was fined $10.5 million earlier this year for similar AML violations, which highlights the ongoing regulatory challenges within Nevada’s gaming industry.

MGM Resorts’ Response and Steps Toward Improved Compliance

While MGM Resorts did not directly comment on the $8.5 million fine, the company released a statement acknowledging its full cooperation with regulators during the investigation. The company also emphasized that it had taken significant steps to strengthen its AML compliance program in light of the violations. MGM stated that it had implemented additional safeguards, enhanced employee training programs, and revised its internal protocols to ensure better detection of suspicious financial activity.

“We’ve taken additional steps to strengthen safeguards, increase accountability, and reaffirm our commitment to doing what’s right for regulators, guests, and stakeholders,” MGM Resorts said in a statement quoted by The Nevada Independent. These steps demonstrate MGM’s commitment to improving its compliance program and addressing the concerns raised by regulators during the investigation.

Among the corrective actions MGM has implemented is an expanded training initiative for employees, with particular emphasis on frontline casino workers such as hosts and sportsbook employees. These employees will be provided with training on the identification and reporting of suspicious financial activities. Such measures are vital for ensuring that all employees are well-versed in AML regulations and equipped to help prevent money laundering and other illegal activities at the casino.

Additionally, MGM has introduced revised internal protocols aimed at enhancing accountability and preventing future violations. The company’s efforts to bolster its AML program are part of a broader industry-wide trend toward stricter compliance standards and more proactive oversight of gaming operations.

Regulatory Oversight Tightens in Wake of Scandal

The proposed $8.5 million fine, which will be reviewed by the Nevada Gaming Commission, is part of an ongoing trend toward heightened regulatory enforcement within the Nevada gaming sector. Over the past several years, Nevada has significantly increased its focus on AML compliance, especially in the wake of high-profile scandals such as the MGM Resorts case. The Nevada Gaming Control Board has made it clear that it is committed to ensuring that gaming operators adhere to the highest standards of compliance and integrity.

In addition to the state-level fine, MGM Resorts has already faced other penalties for its failure to comply with AML regulations. Earlier this year, the company was fined $7.45 million by federal authorities in connection with violations related to Scott Sibella’s actions. This fine highlights the broader issue of compliance failures within MGM Resorts and underscores the increasing scrutiny that gaming companies are facing from both state and federal regulators.

If the Nevada Gaming Commission approves the $8.5 million settlement, it will effectively conclude the state’s investigation into MGM Resorts’ role in illegal gambling and money laundering activities. While the fine addresses past violations, it also serves as a clear message to other gaming operators that regulatory compliance is a top priority. The settlement also requires MGM Resorts to continue improving its AML program, ensuring that future violations are avoided and that the company meets the high standards set by regulators.

Looking Forward: Strengthened Compliance in the Gaming Industry

The settlement, if approved, will formally close the book on this high-profile case, but it will also have long-lasting effects on the gaming industry in Nevada and beyond. The fine serves as a reminder to gaming operators of the critical importance of maintaining robust anti-money laundering programs. With the growing focus on compliance in the gaming sector, operators must take proactive steps to prevent illegal activities such as money laundering and illegal bookmaking.

As the gaming industry continues to evolve, it is likely that regulatory bodies will continue to tighten their oversight of gaming operators, particularly when it comes to compliance with AML regulations. MGM’s case highlights the risks associated with failing to meet these requirements and serves as a cautionary tale for other gaming companies. In the wake of this scandal, it will be important for all gaming operators to reassess their internal procedures and ensure that they are doing everything possible to prevent illegal activity at their casinos.