Resorts World Las Vegas Agrees To Pay $10.5 Million Fine

The proposed $10.5 million fine levied against Resorts World Las Vegas (RWLV) marks a significant moment in Nevada gaming history, positioning it as the second-largest monetary penalty for AML failures, trailing only behind Wynn Resorts’ 2019 fine.

On March 20, the Nevada Gaming Control Board (NGCB) finalized a proposed stipulation for settlement with RWLV, concluding an extensive investigative process that unearthed serious anti-money laundering (AML) compliance issues. This case not only highlights the regulatory challenges within the gambling industry but also reflects the increasing scrutiny on gaming establishments regarding their operational integrity.

The proposed settlement follows a comprehensive 12-count complaint filed by the NGCB against RWLV concerning alleged deficiencies in its AML protocols. With this fine, the NGCB is set to enforce one of the largest penalties on record, raising concerns about the adequacy of current industry compliance frameworks.

The $10.5 million fine, which equates to approximately £7.7 million or €9.2 million, will be directed to the Nevada general fund. This proposed fine is significantly lower than the $20 million penalty imposed on Wynn Resorts for failing to mitigate serious misconduct allegations against its former CEO, Steve Wynn.

The stipulation outlines a series of specific conditions that could affect RWLV’s gaming licenses. Additionally, it aims to settle an amended complaint regarding unsanctioned operational methods alleged over a multi-year period.

The underlying issues stem from activities within RWLV related to two illegal bookmakers, Mathew Bowyer and Damien Leforbes, who are currently awaiting sentencing on federal money laundering charges.

Heavy Wagering at Resorts World Las Vegas

In August, the NGCB unveiled a 31-page complaint detailing a plethora of purported AML compliance failures, particularly citing Mathew Bowyer’s operations as an illegal bookmaker. Bowyer managed to attract approximately 700 clients, facilitating around $325 million in sports wagers, which included significant sums from Ippei Mizuhara, former interpreter for MLB star Shohei Ohtani. Mizuhara himself received a sentence of 57 months in federal prison for his involvement in bank fraud and tax evasion.

Data from the complaint indicates Bowyer gambled at RWLV at least 80 times over a 14-month period, incurring losses upwards of $6.6 million. Since its opening in June 2021, Resorts World Las Vegas has represented a monumental $4.2 billion investment, marking it as the costliest casino in Las Vegas history. Overall, Bowyer’s losses at RWLV reportedly reached at least $7.9 million.

As captured by various reports, Bowyer’s significant gambling activities were complemented by his high-profile connections, raising serious questions about the AML oversight within RWLV.

Allegations of Non-Compliance

An audit of Bowyer’s gambling file revealed repeated presentations before the casino’s AML compliance committee, during which concerns over his funding sources relative to his betting patterns were raised. Notably, during a committee meeting in March 2023, committee members identified Bowyer by his “bookie” title, a descriptor that had been removed upon request by an unnamed RWLV executive two months prior to that meeting.

The NGCB complaint delves into RWLV’s stated commitment to an effective AML program and internal controls, asserting compliance with the Bank Secrecy Act. Despite these claims, the investigation suggests a systemic failure to adhere to risk management principles crucial to safeguarding the casino’s integrity and that of the broader financial system.

“Poker After Dark” Involvement

Of particular interest is Damien Leforbes, a known participant in the poker scene, who has garnered substantial winnings in high-stakes events, including a notable cash at the World Series of Poker. In a notable timeframe, Leforbes allegedly wagered a staggering $148 million at the casino in question (referred to in court filings as “Casino A”).

As outlined in the complaint, Leforbes’ gambling activities included not just casino chips but also payments conducted through cryptocurrency wallets for his clients. Reports indicate his total losses at RWLV surpassed $12.3 million over numerous visits.

Additional investigations conducted by Nevada regulators have revealed that RWLV permitted individuals with backgrounds in gambling-related felonies to place bets, highlighting systemic lapses in compliance measures. Notably, Edwin Ting was documented to have lost over $800,000 over a 25-month timeframe, despite prior convictions for illegal gambling operations.

Blame Shifts to Bookmakers

The NGCB’s findings suggest a troubling environment at Resorts World, wherein executives allegedly tolerated a culture of negligence regarding suspicious activities. The investigation indicated that the casino may have prioritized financial gain over regulatory compliance.

This proposed settlement arrives amidst considerable sentencing delays linked to related criminal cases. Both Leforbes and another illegal bookmaker, Wayne Nix, face ongoing legal proceedings, with significant implications for the future of compliance in the industry.

Scott Sibella, a once prominent executive at RWLV and MGM Grand, has faced scrutiny for failing to file crucial suspicious activity reports. Following a probationary sentence, Sibella was terminated from RWLV, raising questions about the corporate governance and oversight mechanisms driving these ongoing compliance issues.

Rampant Money Laundering Concerns

Incidents of money laundering and related financial crimes have become increasingly prevalent within the casino ecosystem. A recent example includes Wynn Las Vegas, which agreed to a $130 million forfeiture settling allegations of collusion with unlicensed money-transmitting businesses. Industry leaders, like New York State Gaming Commission chairman Brian O’Dwyer, have expressed concerns about the repercussions these activities might have on broader gambling operations nationally.

Internationally, Australian regulators have similarly levied massive fines on casinos guilty of extensive AML violations, underscoring the global nature of the challenges facing the industry.

Upcoming Nevada Hearing Scheduled

The stipulation reached with the NGCB affirms their right to pursue additional disciplinary actions should RWLV face any federal scrutiny. A decision regarding the stipulation is set to take place during the Nevada Gaming Commission meeting on March 27, where representatives from both RWLV and the Nevada attorney general’s office will present their case.

The unfolding events not only highlight the pressing need for robust compliance measures within the gambling industry but also serve as a stark reminder of the financial and reputational risks associated with inadequate AML practices. As the regulatory landscape continues to evolve, the actions taken by the NGCB will likely set important precedents for the future of gaming in Nevada and beyond.