A gaming-license revocation at last week’s meeting of the Nevada Gaming Commission capped a momentous 18 months for regulators and law enforcement.
Scott Sibella, former president and COO of Resorts World Las Vegas, pleaded guilty to federal charges of failing to report illegal gamblers playing at MGM Grand in 2018. He was accused of willfully ignoring the source of a customer’s funds and failing to file a suspicious activity report after allowing illegal bookmaker Wayne Nix to gamble. Sibella was sentenced to probation and fined.
In August, the Gaming Control Board filed a disciplinary complaint against Resorts World, alleging it catered to illegal bookmakers with ties to organized crime.
In the 31-page complaint, the NGCB detailed how agents uncovered a lack of compliance at Resorts World, “allowing a culture that welcomed certain individuals with suspected or actual ties to illegal bookmaking, histories of federal felony convictions related to illegal gambling businesses, and ties to organized crime.”
The complaint asserts that the individuals were allowed to place millions of dollars in wagers over many months, with the resort failing to adhere to its anti-money laundering program.
“The NGCB investigation revealed acceptance among Resorts World executives of a culture where information of suspicious or illegal activity is, at a minimum, negligently disregarded or at worst, willfully ignored for financial gain.”
That wasn’t the end of the bad news to hit the industry.
In September, Wynn Resorts said it will forfeit $130 million to the federal government to settle criminal allegations that it conspired with unlicensed money-transmitting businesses worldwide to transfer funds to benefit itself. Wynn reached a “non-prosecution agreement” with the U.S. Department of Justice to resolve the 10-year-old investigation at Wynn Las Vegas.
The Gaming Control Board has yet to take action against Wynn in light of the federal fine.
Australia has been besieged by money-laundering cases in that country for the past decade involving criminal gangs from mainland China gambling at Star Entertainment and Crown resorts. Crown was fined $300 million in July 2023 by the Federal Court of Australia.
In October, Star was fined $10 million and had its license suspension extended until 2025; its Sydney casino is operated by a court-appointed manager. It was fined $62 million in 2022 for its lax anti-money-laundering protocols.
Anti-money laundering was a focal point at the Gaming Law Conference earlier this month hosted in Las Vegas by the State Bar of Nevada. It featured Paul Camacho, a retired special agent in charge in Las Vegas for the IRS with more than 25 years of financial-crime experience. Today, he’s the vice president of compliance at Yaamava Casino & Resort and previously served at the same capacity for Station Casinos.
In his hour-long presentation, Camacho focused on Chinese money-laundering organizations and outlined how their schemes work.
Chinese money laundering has allowed more fentanyl on U.S. streets and more people dying, Camacho said. It also fuels human trafficking and fraud.
A lot of cash from Mexican cartels ends up going through southern California and Las Vegas as a way to get it into the Mexican banking system. Wealthy Chinese want to get it out and into the U.S., bypassing Chinese capital-flight laws.
“You have these two money-laundering demands and organizations created this scheme to meet those two demands.”
The Mexican cartels work with Chinese money-laundering organizations who transfer a similar amount, less their fee, to bank accounts of the cartel’s front company, Camacho said. They sell that cash to Chinese nationals in the U.S., Canada, and other countries worldwide.
Camacho also discussed the Wynn’s $130 million fine. “Someone takes out a marker for a quarter of a million dollars and they give the chips to somebody else who gambles.”
Wynn admitted they didn’t prevent Chinese money-laundering organizations from funding patrons’ gambling, Camacho said. The operator failed to file suspicious activity reports on patrons associated with criminal history.
“You should look at the suspicious activity report as a free insurance policy. If you file a righteous SAR, you can say, ‘I told you about it.’ When you look at the charging documents on casinos or banks, they failed to file an SAR.”
Camacho said Resorts World is accused of allowing illegal bookies to gamble, didn’t validate the source of funds on large deposits, didn’t notify the compliance department, and disregarded criminal histories of players.
“These are strong messages coming from the gaming regulator that we would take to heart.”
Camacho cited media speculation that the case could impact Resorts World’s New York casino bid, meaning these cases impact a casino’s reputation. He urged casinos to look into sources of funds more closely.
Nevada Gaming Control Chair Kirk Hendrick followed Camacho in his presentation and noted anti-money laundering is on the front page of newspapers.
“We have to be sure we’re educating the industry on what we require,” Hendrick said. “We don’t investigate or prosecute federal crimes. But we require that licensees follow all federal, state, and local laws. By doing that, it’s our job to educate the industry and our job that the industry educates itself. A lot of that is about training.”
Willy Allison, who puts out the Monitor Room newsletter on criminal activity within casinos and hosts the World Game Protection Conference in Las Vegas in March, said what’s happening can simply be described as “senior executives doing the wrong thing. Casinos can train staff to fill out reports, but if executives are mishandling them, it will end poorly.”
Allison said this is the worst he’s seen the problem since he’s been in the industry. “Governments are stepping up (on enforcement). Casinos that don’t take this seriously, the feds are coming after. My message to all casinos is make sure you have a robust program, that it’s enforced and you’re seen as doing everything you possibly can to make sure money laundering isn’t going on.”
Allison called it “a combination of turning a blind eye” and desire for profits in a competitive industry. There’s pressure to bring in big players and the crackdown in Australia has hurt business, he noted.
“The high rollers won’t go, because of the scrutiny the casinos are being asked by the government to put these customers under,” Allison said. “They’ll go somewhere where they don’t have to fill out paperwork and the casino won’t pry into their bank records.”
Despite the hit casinos are taking, Allison said they’re doing a good job overall. They’re asked to do more than other industries, because they have cameras and accounting processes.
“Every now and then, things slip through the gaps and the regulators jump on them,” Allison said. “The casino industry knows how important this is. It’s a sad situation, to be honest. Casinos are so sexy a target. In Australia, it’s the worst I’ve ever seen. It makes me sick how the government and media bash the 12 casinos in the country and they have no idea how hard they work. They see billions of dollars every year and every now and then something slips by. Not only is there a big write up in the media, but the operators are fined a huge amount of money. I’m not defending them. They know what the law is. It’s black and white.”
https://cdcgaming.com/nevada-gaming-license-revocation-highlights-casino-money-laundering/
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State gaming regulators have reached a tentative agreement with Scott Sibella, the former top executive at Resorts World and MGM Grand, which effectively ends his career in Nevada’s casino industry.
The Nevada Gaming Control Board filed a stipulation of settlement with the Nevada Gaming Commission revoking Sibella’s gaming license and his finding of suitability in the state in addition to imposing a fine of $10,000. Sibella also would be placed on the board’s list of denials, revocations and findings of unsuitability, barring him from applying to re-enter Nevada’s gaming industry for a five-year term, retroactive to December 2023.
That’s the month before Sibella pleaded guilty in U.S. District Court in Los Angeles for failing to file, while employed at MGM Grand, a suspicious activities report to federal officials investigating the presence of illegal bookmakers in violation of anti-money laundering laws.
The charge stemmed from his tenure as president of the MGM Grand casino-hotel, which is where since-convicted illegal bookmaker Wayne Nix was gambling with impunity, according to authorities.
License revocations are rare. While the commission could seek a higher fine — up to $300,000 — a license revocation is a far greater penalty on a licensee and it’s expected the commission would agree to the $10,000 fine, which was suggested by Sibella’s legal counsel.
While such a settlement with the Gaming Commission would prevent him from holding a key executive role in Nevada’s licensed casinos, regulators in other states often follow Nevada’s lead on complaint penalties, meaning Sibella could have a hard time getting a top gaming position in other states.
Sibella was sentenced to one year’s probation and fined $9,500, plus a $100 special assessment, for violating the federal Bank Secrecy Act established to prevent money laundering at financial institutions.
U.S. District Judge Dolly M. Gee pronounced the sentence May 8 in the Central District Court of California in downtown Los Angeles.
During that sentencing, Sibella took responsibility for his failings.
https://www.reviewjournal.com/business/casinos-gaming/ex-top-casino-exec-loses-gaming-license-in-settlement-with-regulators-3227910/