MGM admits to wrongdoing in illegal bookie case as Nevada regulators approve $8.5 million settlement
As expected, the Nevada Gaming Commission (NGC) approved an $8.5 million (£6.4 million/€7.5 million) fine against MGM Resorts on Thursday, settling widespread charges surrounding the company’s anti-money laundering (AML) protocols. The NGC approved the stipulation for settlement against MGM by a vote of 4-0.
The approval is the NGC’s second over the last month regarding AML casino procedures, a sore subject for compliance teams on both ends of the Las Vegas Strip. Both settlements involve Scott Sibella, who served as president of MGM Grand before he left in 2019 to accept the same position at Resorts World Las Vegas (RWLV).
The MGM fine is less than the $10.5 million RWLV settlement approved by the commission last month. Terminated by RWLV in 2023, Sibella was sentenced to one year of probation last year for several federal crimes, including failure to file a suspicious activity report (SAR).
MGM Resorts notably accepted wrongdoing for its transgressions, unlike RWLV, which did not admit or deny any of the charges at last month’s hearing.
“We did not put up obstacles, we cooperated and we knew at the end of the day there would be a sanction,” MGM chief legal officer John McManus said in his remarks before the commission.
Brown paper bags
The 74-minute hearing came approximately a week after the Nevada Gaming Control Board released a 10-count complaint against two MGM Resorts properties – the MGM Grand and The Cosmopolitan of Las Vegas. The counts stem from the activities of two illegal bookmakers, both of whom are awaiting sentencing on federal charges.
The majority of the charges relate to MGM’s dealings with Wayne Nix, a California bookie who pleaded guilty in 2022 to operating an illegal gambling business and subscribing to a false tax return. Starting in 2017, MGM Grand’s compliance team began to raise suspicions about his sources of funds after Nix presented $50,000 in cash at a cage inside the property.
The transaction drew suspicion in part because Nix submitted more than $5,000 in small denominations of cash, according to the complaint. Yet the casino did not file any SARs for certain Nix deposits that did not involve small denominations, the complaint states.
According to the complaint, Nix travelled frequently to Las Vegas, sometimes with bags of cash containing high-denomination bills. On some occasions, Nix used duffle bags to carry his money, while at others he used leather purses or brown paper bags. By 2020, the Cosmopolitan accepted at least $928,600 in illicit proceeds from the Nix Gambling Business, Nevada regulators contend.
Relationships with Nix, Bowyer
Nix maintained a longstanding relationship with Sibella, accepting multiple excursions for free golf trips at Sibella’s urging. Separately, Sibella stated in a hearing last December that he made several “gentleman’s bets” with Nix on the golf course. Still, the former MGM executive denied that he maintained an account with the illegal sportsbook operated by Nix.
Of the 10 charges, nine relate to Nix, with the remaining charge pertaining to activities of Matt Bowyer, another illegal bookmaker. Bowyer’s illegal sports betting enterprise accepted more than $325 million in wagers from Ippei Mizuhara, the former interpreter for Shohei Ohtani.
MGM had suspicions of Bowyer’s illegal bookmaking activities as early as 2015, according to the complaint. MGM Resorts banned Bowyer three years later, attorneys for the company confirmed at Thursday’s hearing.
NGC commissioner Abbi Silver recused herself from Thursday’s hearing due to her relationship with Sibella.
A prominent list of clientele
The Nix Gambling Business allegedly had hundreds of customers, including some with ties to the world’s most famous athletes. The Nix clientele allegedly included former MLB All-Star Yasiel Puig, Pro Basketball Hall of Famer Scottie Pippen and Maverick Carter, a business manager for Lebron James. Nix also allegedly funnelled his clients’ wagers offshore through Sand Island Sports, a Costa Rica call centre.
The Nevada settlement closely mimics a federal non-prosecutorial agreement signed by the MGM Grand and The Cosmopolitan last January. Under that $7.45 million settlement, The Cosmopolitan agreed to a $928,600 fine, including the forfeiture of $500,000.
The NGC revoked Sibella’s gaming licence at the December hearing by a vote of 3-0. At the same time, Sibella indicated that it was his understanding that certain MGM employees received kickbacks while assisting Nix in his endeavours. As of now, no current or former MGM employees, beyond Sibella, have been charged in the matter.
Nix at times used the golf trips with MGM Grand’s high-net worth customers to solicit new clients for his gambling business, the Nevada complaint alleged.
Beyond Sibella, two marketing hosts from the MGM Grand had knowledge of the bookmaking activities by Nix, according to the complaint. Representatives for the company indicate that it believes the hosts have received additional training since the federal non-prosecutorial agreement.
Maintaining the “right culture”
While MGM Resorts enlisted a handful of attorneys and executives to represent the company at the hearing, CEO Bill Hornbuckle was not among them. Hornbuckle apparently travelled outside the country to attend a company event in Japan, participants at Thursday’s hearing disclosed. Last week, however, Hornbuckle discussed AML standards across the Strip in a brief interview with iGB.
Although Hornbuckle admitted that a “rogue employee” may be responsible for a rare slip-up, he indicated that the company is in constant communication with regulators when something appears out of the ordinary. Moreover, Hornbuckle emphasised that MGM maintains the “right culture” with compliance matters, a proclamation made by several MGM representatives at the hearing.
Scott Scherer, an attorney with Brownstein Hyatt Farber Schreck LLP, represented MGM Resorts before the commission and provided a slide presentation on the company’s compliance framework. The presentation contained a quote from Hornbuckle at a 2024 MGM town hall: “I don’t care if there’s a single customer with all the money in the world,” he said at the time. “It is still not worth our reputation.”
Eight-point remediation plan
Stephen Martino, chief compliance officer at MGM Resorts, outlined an eight-point remediation plan the company plans to undertake in light of the settlement. Among the changes, Martino noted that MGM plans to employ the following:
- Formalising a plan to share credit information between the credit and compliance departments to assist in know-your-customer reviews.
- Enhanced due diligence for the company’s top 25 cash customers.
- New procedures for large cash transactions, including transactions that are not conducted in small bills. Moving forward, all transactions that exceed $100,000, regardless of the denomination, will be reported to the compliance department.
- Increased spending on the company’s AML framework by more than $1 million.
While Martino contends that the company had a solid AML compliance programme before the allegations, he admitted that it could have done better. McManus also expressed contrition in taking responsibility for the previous missteps.
A standard of perfection
Jennifer Togliatti, chair of the NGC, spoke only briefly on the case but said she supported the settlement. Commissioner Brian Krolicki was more expansive with his comments. Krolicki repeated his statements from the RWLV hearing, reiterating that the money laundering allegations across the Las Vegas Strip serve as a “clarion call” that regulators view the infractions with the utmost seriousness.
Krolicki lauded MGM Resorts for its forthright approach in working with regulators, but he cautioned that its “tone at the top” is critical. He borrowed a line from famed investor Warren Buffett in articulating that a company’s best plans are only as good as those who adhere to it. Sibella was not mentioned by name in his comments.
The commissioner also declared that the NGC’s response to the investigations will send a message to illegal bookmakers that they cannot conduct illicit business in Nevada. Krolicki is confident that the defendants will be handed the strictest penalties.
While McManus noted that compliance is a pillar that makes the business possible, the NGC will accept nothing less “than perfection”, Krolicki emphasised.
Impact of incoming NGCB chairman
Earlier this week, Nevada governor Joe Lombardo appointed Mike Dreitzer as chairman of the Nevada Gaming Control Board. Dreitzer has extensive experience in gaming technology.
With the appointment, the incoming chair will resign from his post as CEO at Gaming Arts, a gaming equipment supplier. The company holds licences in more than 100 jurisdictions in North America, Latin America, the Pacific Rim and South Africa. Before his stint at Gaming Arts, Dreitzer served as president of Ainsworth Game Technology’s North America division.
As a former regulator in California and Bermuda, Richard Schuetz is one of the gaming industry’s leading voices on integrity issues. Schuetz told iGB on Thursday evening that he is hopeful that Dreitzer’s appointment is a step in the right direction.
Schuetz is also optimistic that Dreitzer will bring some continuity to the position given the large turnover in the last decade. Dreitzer will be the fifth person to serve as chair of the board since January 2019. He inherits a partial term through January 2027.
On the docket
While the relationship between Nix and Bowyer is not entirely clear, an agent of Bowyer’s placed dozens of sports wagers with the Nix Gambling Business, a source with knowledge of the case told iGB on condition of anonymity.
Last spring, an attorney for Sibella asserted that his client is not connected with Bowyer.
After receiving an eight-month continuance, Bowyer is scheduled to be sentenced on 3 October 2025.
As of Thursday, the federal government has not handed down any penalties against RWLV in connection with the sweeping illegal gambling investigation. Nix, meanwhile, has received multiple continuances since his guilty plea three years ago. The timing of the Nix sentencing has been delayed indefinitely.