Wynn agrees to $5.5 million AML fine from Nevada regulators

The Las Vegas Strip’s ongoing challenges with anti-money laundering (AML) compliance continue as Wynn Las Vegas becomes the third casino in 2023 to face significant penalties.

Wynn Las Vegas has agreed to a $5.5 million fine imposed by the Nevada Gaming Control Board (NGCB) due to violations related to unlicensed money transfers, marking a troubling trend in the industry. The adage “one is an accident, two is a coincidence, three is a trend” resonates deeply in the context of regulatory actions against major operators on the Strip.

This latest complaint, consisting of six counts, builds on a federal non-prosecution agreement from September, which saw Wynn forfeiting over $130 million—a record for a casino admitting criminal wrongdoing, as stated by the U.S. Attorney’s Office for the Southern District of California.

Earlier this year, Resorts World Las Vegas faced a $10.5 million fine for AML violations linked to illicit bookmakers, followed by MGM Resorts, which settled for $8.5 million over similar issues involving some of the same offenders. Although Wynn’s fine stems from different infractions, it underscores a series of regulatory failings impacting America’s gaming capital.

The Nevada Gaming Commission is set to finalize its ruling on May 22, having previously approved significant fines without conditions in both prior hearings.

In a statement, Wynn expressed satisfaction with the resolution, reinforcing their commitment to adhere to stringent legal and ethical standards. “We accept responsibility for the actions that violated our compliance protocols and are relieved to have resolved the matter,” the casino stated.

Nature of the Violations

The NGCB’s six-count complaint outlines serious AML breaches tied to a pattern of illicit money transfers dating back to at least 2014. The complaint revealed instances where former Wynn employees allowed international patrons to move or transfer money inappropriately for gambling purposes, thereby breaching the casino’s AML Compliance Program.

Wynn allegedly circumvented federal and state financial regulations by rerouting funds through third-party agents, companies, and bank accounts, funneling money into a Wynn-controlled account in California. Those funds were then transferred to the casino cage account, facilitating access for foreign gamblers without adhering to necessary reporting protocols.

Among the various infractions cited were “human head” schemes, where designated individuals acted as proxy bettors for others who could not meet the usual AML criteria, and “flying money” schemes involving unlicensed money transmitters bringing cash to casino patrons under obscure pretenses.

Comparative Regulatory Challenges

The infractions at Wynn bear resemblance to the challenges faced by Australian operators such as Crown Resorts and Star Entertainment, which have undergone severe regulatory scrutiny for allowing illegal money transfers. Both companies faced investigations for facilitating fund transfers through methods that skirted legal boundaries, with combined illicit transactions surpassing AU$1 billion ($640.5 million).

Regulatory Landscape in Transition

The recent fines levied against Wynn signal an evolving regulatory environment in Las Vegas. While the Strip has seen remarkable financial recovery post-COVID-19, the looming prospect of federal oversight is precarious. All three AML investigations—against Wynn, MGM, and Resorts World—were initiated by federal authorities, not state regulators, highlighting heightened concerns over compliance.

Critics argue that the fines imposed thus far, including Wynn’s record $20 million penalty in 2019 over sexual harassment allegations against founder Steve Wynn, indicate a relatively lenient regulatory approach. Expectations were high that AML violations would incur substantial penalties conducive to deterring further misconduct, yet recent fines have fallen short of those expectations.

Leadership Changes and Regulatory Dynamics

The NGCB has also seen significant turnover, contributing to concerns over regulatory effectiveness. Current Chairman Kirk Hendrick is set to step down on June 22, relinquishing his seat to Mike Dreitzer, a well-respected figure with extensive experience in gaming law and regulatory compliance. This change comes amid an atmosphere of scrutiny over commission members’ handling of regulatory matters and their relationships with industry stakeholders.

As the NGCB adjusts to new leadership, the urgency for robust compliance mechanisms and transparent regulatory practices continues to escalate within the gaming industry.

With internal and external pressures mounting, stakeholders in the Las Vegas gaming sector must prioritize effective AML compliance strategies to navigate the increasingly complex regulatory landscape and sustain the integrity of one of the world’s most iconic entertainment destinations.