MGM Resorts Fined $8.5 Million for Compliance Violations
The Nevada Gaming Commission recently sanctioned MGM Resorts International with an $8.5 million fine following a stipulated agreement related to a complaint filed by the Nevada Gaming Control Board. The board alleged that MGM knowingly allowed three illegal bookmakers to gamble at its establishments, raising concerns about the integrity of operations within the state’s gaming sector.
Details of the Allegations
The commission’s findings indicated that these illegal bookmakers participated in gambling at MGM properties on over 700 occasions, including at both the MGM Grand and Cosmopolitan, the latter of which MGM acquired. “One bad apple can ruin years of great work,” stated Nevada Gaming Commissioner Brian Krolicki, highlighting the potential reputational damage associated with these violations.
Commissioner’s Insights
Krolicki commended MGM for its overall culture of compliance, despite the serious nature of the allegations. He noted that approximately 2,600 individuals have been banned from MGM properties in the past decade and that the company had filed 46,000 suspicious activity reports (SARs), indicating a substantial commitment to regulatory adherence. “That is a culture of compliance. You should be proud of it,” he remarked.
Another commissioner, Rosa Solis-Rainey, emphasized that the situation surrounding MGM was distinct from similar cases, acknowledging that the company had long maintained a strong compliance culture that predated the current issues.
MGM’s Response and Compliance Efforts
Scott Scherer, a former member of the Gaming Control Board who represented MGM, noted that this incident underscored a vulnerability in the company’s compliance program. “Unfortunately, this case exposed one of the weaknesses in that program – when employees forget their responsibilities or decide not to fulfill those responsibilities,” he explained.
MGM’s General Counsel, John McManus, defended the company’s practices, indicating that compliance is a fundamental aspect of MGM’s operations: “This is not an organization where compliance is a priority until it’s inconvenient for the business. Compliance is what makes the business possible,” he stated.
Consequences for Individuals Involved
In related developments, former MGM Grand president Scott Sibella pled guilty in federal court for failing to submit a suspicious activity report in 2018 and agreed to relinquish his Nevada gaming license for five years. This case underscores the personal ramifications that can arise from compliance failures within the organization.
Continuing Investigations
Further scrutiny into MGM’s practices is ongoing, particularly with federal investigations into both MGM Resorts and Resorts World. Notably, Resorts World recently agreed to a $10.5 million penalty for similar violations. As of now, no federal actions have been taken against Resorts World.
Conclusion
The hefty fine imposed on MGM Resorts International serves as a stark reminder of the critical nature of compliance within the gaming industry. As regulations continue to evolve, companies must remain vigilant to ensure the integrity of their operations while safeguarding their reputation.