Casino executives faced pressure, leading to money laundering incidents and hefty fines, according to a legal expert and author specializing in gaming.
Barbaric Casinos: The Sordid State of Gaming
Straying from the beaten path, let's delve into the murky waters of commercial casinos and their tangled web of anti-money laundering (AML) regulations. Buck Wargo, a seasoned gaming lawyer and former UNLV professor, reveals that the pressure to churn out income has led casinos worldwide to turn a blind eye to criminal activity.
Take, for example, Resorts World Las Vegas. The colossal fine of $10.5 million leveled against it for its alleged failure to comply with federal AML laws is the second-most significant in Nevada history. The reason? Allowing illegal bookmakers to gamble millions of dollars on their premises.
Anthony Cabot, the man in the know, expects such fines to become the norm across the industry. "For the last several years," he says, "the Gaming Control Board has been assessing substantial fines against many of the larger casino companies." This hardline stance signals that self-regulation needs to be prioritized, or casinos risk facing hefty penalties.
In September, Wynn Resorts agreed to pay a whopping $130 million to the federal government to settle criminal allegations that it conspired with unlicensed money-transmitting businesses worldwide. Regulators haven't yet taken action against Wynn, still reeling from a $20 million fine levied in 2019 for failure to investigate sexual-misconduct allegations against former CEO and Chairman Steve Wynn.
The picture isn't rosy overseas either. Over the last 18 months, money-laundering cases plagued Australia, with criminal gangs from mainland China gambling with Star Entertainment and Crown Resorts. Crown was fined $300 million in July 2023 by the Federal Court of Australia, and Star Entertainment was fined $62 million in 2022 for its AML protocols. To add insult to injury, it was fined another $10 million, and its license suspension was extended until 2025; its Sydney casino is now operated by a court-appointed manager.
Australia isn't alone in this regulatory quagmire. Vancouver, British Columbia, has seen its fair share of violations, with cases rivaling the most egregious in decades, according to Cabot, author of the upcoming book Casino Redux: Unveiling the Global Network of Chinese Organized Crime. The book delves into the lives of legendary Triad leaders, chronicling their rise to power and their strategic maneuvers to gain a firm grip on the lucrative global casino industry.
While the US has had its share of lapses, recent cases have been isolated, uncovered, and nowhere near the scale of what's happening abroad, according to Cabot. He stresses that the facts behind the Wynn case aren't yet known, but will come to light during any Gaming Control Board discipline.
Cabot is disappointed that Australian regulators haven't stripped gaming licenses despite the most shocking regulatory violations he's ever encountered. He laments that "casino companies can be too big to fail" and that high fines eliminate one of the major deterrents to regulatory compliance.
As for Nevada, Cabot believes things are generally better than before the AML laws. Nevada does a better job of keeping operators in line than other jurisdictions, although he would like to see some changes. One major concern is that Nevada needs to revisit the statutory and regulatory authority to ensure it can fine the individuals who commit the violations, not just the companies they leave behind.
In the interim, pressures on casino executives to raise revenue continue to persist, often taking precedence over compliance and ethics. This dynamic needs to change for the better, and the industry must rethink its regulatory strategies to avoid repeating the mistakes of the past.
- By 2025, casinos might face additional pressures as their lax approach towards money-laundering could lead to stricter regulations, following the suspension of Star Entertainment's Sydney casino license until then.
- In a few years, the Singapore-based lawyer Anthony Cabot, who expects hefty fines to become the norm in the gaming industry, may highlight misconduct cases of casinos internationally in his upcoming book, "Casino Redux: Unveiling the Global Network of Chinese Organized Crime."
- Despite paying a whopping $130 million to the federal government in 2021 to settle criminal allegations of conspiring with unlicensed money-transmitting businesses, Wynn Resorts faced another fine of $20 million in 2019 for failing to investigate sexual-misconduct allegations against its former CEO and Chairman, showcasing a recurring pattern of misconduct in the sports and gambling industries.
