MGM Resorts to pay $8.5M fine for anti-money laundering violations

MGM Resorts International has reached an agreement to pay $8.5 million to Nevada regulators following an extensive investigation into anti-money laundering (AML) violations associated with two previously convicted illegal bookmakers.

If sanctioned by the Nevada Gaming Commission next week, this proposed settlement would be one of the largest regulatory fines in the state’s history, underscoring the seriousness of the issues at hand.

The penalty arises from a detailed 10-count complaint lodged by the Nevada Gaming Control Board (NGCB), highlighting MGM’s shortcomings in preventing unlawful gambling activities and effectively managing significant cash transactions at both the MGM Grand and The Cosmopolitan. The inquiry notably implicates former MGM Grand President Scott Sibella.

According to the findings, Sibella sanctioned various complimentary incentives—ranging from hotel accommodations to meals and entertainment tickets—for Wayne Nix, a former minor league baseball player turned illegal bookmaker. Investigators determined that Nix funneled millions in illicit funds over numerous visits, frequently arriving with large quantities of cash in bags. Alarmingly, despite internal red flags dating back to 2015, no suspicious activity reports were filed, allowing Nix continued access to MGM properties.

The investigation further revealed that another illegal bookmaker, Mathew Bowyer, engaged in betting activities at MGM venues from 2015 to 2018. Concerns regarding Bowyer’s financial credibility were raised early on, yet he was still permitted to gamble, even after a patron accused him of soliciting clients for illegal betting operations.

Consequences and Recommendations for MGM and Resorts World

MGM Resorts has recognized the settlement and asserts that it has cooperated fully with regulatory authorities while enhancing its internal controls. Although the company did not publicly address the specifics of the fine, it noted the implementation of rigorous AML training and the establishment of systems enabling front-line employees to report suspicious activities effectively.

This state-level fine follows a previous $7.45 million federal penalty MGM incurred under a non-prosecution agreement. In total, MGM has allocated over $16 million to rectify deficiencies related to illegal betting operations and lapses in AML compliance.

The unfolding saga serves as a critical reminder for the gambling industry to prioritize robust compliance frameworks and effective monitoring systems, particularly in areas susceptible to illicit activity. As trends in online and mobile betting continue to rise, the importance of stringent AML practices has never been more pronounced. Therefore, operators must remain vigilant, invest in ongoing training, and foster a culture of compliance to safeguard against potential violations and protect their operational integrity.