Wynn accepts $5.5 million AML fine, becomes third Las Vegas operator fined this year
The old saying goes that one is an accident, two is a coincidence and three is a trend. Wynn Las Vegas and the Nevada Gaming Control Board announced on Thursday that the casino has agreed to a $5.5 million fine for anti-money laundering violations related to unlicensed money transfers, becoming the third Las Vegas Strip operator to face AML penalties this year.
This six-count complaint from the NGCB follows a federal non-prosecution agreement from last September. As part of that agreement, WLV forfeited more than $130 million, which was “believed to be the largest forfeiture by a casino based on admissions of criminal wrongdoing,” per the US Attorney’s Office for the Southern District of California.
In March, Nevada regulators fined Resorts World Las Vegas $10.5 million for AML violations relating to a pair of illegal bookmakers, awaiting sentencing. Then, last month, MGM Resorts paid $8.5 million for the same offence, in a settlement that involved many of the same offenders. The Wynn fine is not connected with those events, but is the latest regulatory mishap for America’s gaming capital.
The Nevada Gaming Commission will now make a final ruling at its meeting on 22 May. In both of the previous two hearings, the commission approved the fines without conditions.
“We are pleased that we have satisfactorily resolved this matter with the Nevada Gaming Control Board,” Wynn said in a statement. “Wynn Resorts is committed to acting with the highest integrity and in full compliance with all laws and regulations governing our industry.
“The improper actions that are the subject of the settlement, which violated Wynn’s own compliance policies and procedures, were undertaken by individuals with whom we severed ties years ago. We accept responsibility for those actions and are now glad the matter is fully resolved.”
Human heads and flying money
The six counts in the board’s complaint relate to numerous AML violations associated with a pattern of illicit money transfers. These violations date back to 2014 at the earliest, per the complaint.
“The NGCB complaint details instances where former employees of Wynn LV allowed international patrons to obtain and/or transfer money improperly for the purposes of wagering and also allowed wagers to be placed for other patrons at Wynn LV in violation of the gaming licensee’s Anti-Money Laundering Compliance Program,” the board said in a release.
WLV reportedly circumvented federal and state financial reporting laws by funnelling money through third-party agents, companies and bank accounts to a Wynn-controlled account in California. Funds from that account were then transferred to the WLV cage account and distributed by employees to foreign gamblers, enabling them to play freely without proper reporting protocols.
The complaint referenced two other violations related to so-called “human head” and “flying money” proxy schemes. The former referred to WLV allowing third parties or “human heads” to serve as proxy bettors for others who, for various reasons, did not or could not submit to regular AML checks.
References to “flying money”, as the name suggests, pertained to unlicensed money transmitters who brought large sums of cash to Wynn patrons. Those patrons, who wouldn’t otherwise have access to cash, would then transfer the foreign currency equivalent to the transmitters plus a fee.
Australian similarities
Wynn’s transgressions were similar in nature to Australian operators Crown Resorts and Star Entertainment. Both companies have been devastated by regulatory inquiries in recent years and both were found to have allowed illegal money transfers.
Gamblers from China were allowed by both companies to transfer funds for gambling via China UnionPay bank cards. Such transfers are illegal in both countries, although the operators had attempted to disguise them through various schemes.
The two operators processed more than AU$1 billion ($640.5 million) in combined illicit transfers, according to regulatory inquiries.
The gold standard?
Overall, the Wynn fine is indicative of a Las Vegas regulatory environment in major flux. Despite the fact that the Strip and Nevada gaming overall have enjoyed record performances post-Covid, the threat of federal intervention looms large. All three AML investigations – Resorts World, MGM and Wynn – were initiated by federal authorities, not state regulators.
Additionally, the fines that have been administered have been considered by many to be lacklustre. Wynn holds the record for the largest penalty in state history, having been fined $20 million in 2019 for failing to address sexual harassment claims against founder Steve Wynn. That case was also not unearthed by state regulators, but rather a Wall Street Journal report.
Given that these three AML cases tie directly to gaming operations, there was some belief that the fines would be similar to, if not more than, Wynn’s 2018 settlement. That has not been the case, and the general consensus from regulators has been a desire to simply settle the matters and move on.
If anything, regulators have come under scrutiny for being too praiseful. In one instance, NGC Commissioner Brian Krolicki referred to Resorts World Las Vegas’ new board as a “dream team”, as the commission delivered the second-largest regulatory fine in state history.
Turnover at the top
The NGCB specifically has also been beset by massive turnover. The current chairman, Kirk Hendrick, is stepping down on 22 June, more than a year before his term is set to expire.
Former Gaming Arts CEO Mike Dreitzer will take his place, becoming the fifth chair since January 2019.
“Handing over the gavel to Chairman Mike Dreitzer will be a smooth transition,” Hendrick said in a statement. “Mike and I have known each other for almost 30 years going back to our days in the attorney general’s office. Mike is the perfect choice by Governor Lombardo based on Mike’s long career in gaming law, government, regulatory compliance and business.”
The board, which handles much of the day-to-day regulatory legwork, is currently made up of Hendrick, Chandeni Sendall and George Assad, a former Las Vegas judge. Since Hendrick is departing and Sendall received an appointment in January, Assad is technically the most senior board member, having been appointed in 2023.
Assad’s son, Anthony Carleo, stole $1.5 million in chips from the Bellagio and was sentenced to three to 11 years in prison in 2011. Assad, around that same time, was given the lowest retention score of any judge in the Las Vegas Review-Journal’s “Judging the Judges” survey.