Saying it’s now “Resorts World 2.0,” the Las Vegas Strip gaming operator Thursday agreed to pay a $10.5 million fine over allegations it catered to illegal bookmakers involving millions of dollars, and that it has implemented measures to prevent it from happening again.
Following a 40-minute hearing, the Nevada Gaming Commission voted 4-0 to accept the settlement proposed by the Nevada Gaming Control Board, but not before some scolding of the Malaysia-based parent company and global operator Genting Berhad for harming Las Vegas’s reputation. As part of the negotiated settlement that originated from a federal investigation, Resorts World doesn’t admit any liability for violating federal money-laundering laws.
Commissioner Rosa Solis-Rainey said she was surprised that the company hasn’t accepted responsibility for how Resorts World “fell down on the job.” She appreciates the efforts the company has taken going forward, but chided the company’s leadership for ignoring the problem.
“I think the fine is on the low side, but given the tremendous expenses the company is facing, has faced, and will continue to face in implementing corrective measures, I support moving forward.”
Resorts World attorney Erica Okerberg responded by saying the company acknowledges that “things went wrong.
The company isn’t saying nothing went wrong or that adjustments weren’t needed.” She said Resorts World has dedicated significant time and resources, including millions of dollars, to build a better company.
“We believe that before you today is a different company than it was before,” Okerberg said. “It’s Resorts World 2.0, if you will.”
Commission Chair Jennifer Togliatti said she understands why Resorts World logistically doesn’t admit liability, but “$10.5 million is a significant admission that things weren’t right.”
Commissioner Brian Krolicki said regulators can reopen the matter if further issues are raised by the federal government. He called it a “teachable moment” not just for the company, but the industry.
Krolicki called the complaint against Resorts World “breathtaking.” In addition, the failure, from the casino floor to the C-suite, was “truly extraordinary.”
There are questions whether a $10.5 million fine, the second largest in the state’s history, is too much or too little, Krolicki said.
“It had to be significant and it is,” Krolicki said in giving credit to the Gaming Control Board. “People can argue should more people be captured in some of this process, but the folks who made those decisions in the C-Suite and on the floor, the pit and hostesses, are gone. I will accept the stipulation as done, because I yield to the wisdom of the folks who negotiated this. I do believe a lot of good will come out of this bad. We see new faces, procedures, and compliance. We now have a dream team of governance here in the front row.”
Krolicki added, “The size of the penalty and reputational risk is a clarion call for the Strip to adhere to perfectly. Because if not, there are severe ramifications. I hope all the lessons we’ve learned will carry forward for many years to come. I never want to do this again.”
Commissioner George Markantonis said the steps taken by Resorts World are both impressive and expensive and the case won’t be soon forgotten. With the settlement, we’re able to put some of this behind us, but the company will still carry the wound for a while. Perhaps the measures put in place will ease the troubled waters.”
The NGCB detailed how agents uncovered a lack of compliance within Resorts World that “allowed 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.”
Chief Deputy Attorney General Darlene Caruso outlined the case, a 10-count complaint followed by a lengthy and in-depth investigation by the Board and many months of intensive negotiations that led to settlement terms and remediation measures. She noted that Resorts World employees couldn’t verify the funds of one customer who they knew was an illegal bookmaker. A host also knew another customer was an illegal bookmaker and referred a Resorts World patron to him.
The conditions of the agreement beyond the fine require Resorts World to revise and maintain its anti-money- laundering policy and procedures; retain employee AML records; help train its registered agents within 60 days; have its independent internal audit review team report on Resort World’s compliance with the AML program and its enhancements; report to the Gaming Control Board any notice from a governmental agency on a criminal investigation or disciplinary action; and retain its current staffing of AML compliance.
Resorts World made changes by appointing Alex Dixon as CEO and Carlos Castro as COO and CFO. It also created a new position and is seeking a chief compliance officer.
Resorts World also created a board of directors to oversee the AML program and regulatory compliance, in addition to overseeing the property. Former MGM Resorts International CEO Jim Murren was named Chair of the Board. A.G. Burnett, former Chair of the Gaming Control Board, was also named to the board, along with Kong Han Tan, president, CEO, and executive director of parent company Genting Berhad. Former Gov. Brian Sandoval, a former Nevada Gaming Commission member and former federal judge, was also named to the Board, along with industry veteran Michelle DiTondo.
