https://thenevadaindependent.com/article/opinion-new-resorts-world-complaint-sends-a-message-to-the-strips-poker-room-underworld

You don’t need a credit line to know that the casino industry moves very quickly these days.

From changes in the latest technology that make it easier to gamble from your laptop and hand-held device, to the wildfire of legal sports betting that’s burning in state after state, the challenges to casino regulation are greater than ever. Look no further than the Strip’s scandalized Resorts World Las Vegas for signs that the structural stresses in the system are showing.

The shimmering, $4.3 billion megaresort and several of its related entities face a 12-count Gaming Control Board (GCB) complaint filed Aug. 15 alleging a jaw-dropping breakdown in casino compliance customer due diligence. The complaint seeks disciplinary action that puts its privileged license in jeopardy and is likely to result in substantial fines.

Other companies will surely say their own player compliance and anti-money laundering due diligence is rock solid, that lapses in executive judgment and regulatory rigor are unfortunate, but rare. But those who track the poker room underworld and watch the increasing pressure casino marketing executives at some properties are put under to attract and keep big customers might disagree.

Some will try to write it off as a casualty of the COVID economy Resorts World was born into when it opened June 24, 2021. You know, a series of unfortunate events. An argument can be made that Resorts World executives cut corners and opened the doors to wiseguy players and thinly disguised illegal bookmakers out of necessity — or perhaps even desperation. In this case, I believe that would be a big mistake.

Church choir membership isn’t a prerequisite for gambling in a casino. The industry employs convicted felons and has often welcomed players with a criminal past as long as they’re gambling with legitimate funds. But Nevada’s gaming statutes don’t list an exemption for catering to felons convicted of gambling crimes. On the contrary. The complaint alleges Resorts World casino executives welcomed players they knew or should have known were illegal bookmakers, had gambling-related criminal convictions or had ties to organized crime.

Six of the charges filed focus on the high and undisciplined play of convicted illegal bookmaker Mathew Bowyer, infamous these days for booking and collecting millions in sports bets from Ippei Mizuhara, the ex-interpreter for Dodgers baseball star Shohei Ohtani. Bowyer and Mizuhara have already pleaded guilty to felony charges.

Bowyer opened a credit line in December 2021 and soon fronted $1 million for personal play and listed himself as a real estate investor, but when Resorts World employees did a background check they noted his limited source of income and previous bankruptcy, labeling a “medium risk” and commenting in part that they were unable to confirm the source of his funds. Other than his home and condo, he appeared to have no other assets.

By April 2022, he was playing high and his wife, Nicole Bowyer, was inserted as his personal “independent” casino marketing agent. The millions in cash rolled into the casino in the ensuing months despite the casino’s anti-money laundering committee being unable to determine the source of the money and even after the director of the cage “stated that patron is a known ‘bookie’ and is using his spouse’s Independent Host business as a cover.” A separate GCB complaint has been filed against Nicole Bowyer.

Another customer, identified in the complaint as “Patron A,” was able to gamble and lose approximately $10 million despite the fact casino officials knew he “takes action” on sporting events. That, too, was overlooked.

But the decision to play the gracious host to convicted felons and organized crime associates Edwin Ting and Chad Iwamoto, who was convicted for his role in one of the largest sports betting operations in Las Vegas history, sort of boggles the mind. The complaint notes facts about Ting and Iwamoto that were easily accessed with a simple Google search.

It wasn’t as if Resorts World was an unsophisticated operator caught flatfooted. Nor was it lacking in player compliance infrastructure. Its anti-money launder program was approved by its executive management team and applies to its officers, employees and satellite marketing offices. The language of the anti-money laundering program is unequivocal about the importance of maintaining “effective internal controls and procedures” and maintaining measures “to prevent its casinos from being used for money laundering or other criminal activity.”

It adds with no irony intended, “No business opportunity is worth the potential risk of becoming involved in money laundering.”

That seems pretty clear.

After reading the complaint, it’s clear that Resorts World did not lack sound anti-money laundering due diligence advice. Those who defined its casino culture simply declined to take the advice they were given.

Controversy is nothing new at Resorts World. Casino and law enforcement sources started seeing wiseguy players and felons with gambling convictions there just weeks after the place opened. Former president and chief operating officer Scott Sibella was sentenced to a year of probation and a $9,500 fine after pleading guilty to a single federal violation of the Bank Secrecy Act. A 35-year casino veteran, SIbella admitted that, in his previous capacity as president of the Strip’s MGM Grand Hotel, he knowingly allowed illegal bookmaker Wayne Nix to gamble cash at the casino in violation of the law’s “know your customer” provision.

Nix, in April 2022, pleaded guilty to three felony charges in an ongoing federal investigation, which is also responsible for taking down Bowyer. Given a target-rich environment that until recently has found poker room bookmakers and loan sharks operating with apparent impunity, it’s not a stretch to presume more trouble is coming.

Sibella was cleared in February 2023 by the GCB after its investigation into a Mexican restaurant at Resorts World called Tacos El Cabron, whose ownership structure included persons tied to a major illegal gambling ring in California. Months later, Sibella was on his way to being bounced from the industry.

The Resorts World complaint doesn’t mention Sibella’s name, but its content raises more questions about his management of the casino and makes the Gaming Control Board’s previous investigation that cleared him of wrongdoing look even more like a political tank job.

Nearly lost in the current complaint is a line that carries extra weight given the current allegations and the increasing number of involved players: “The Board’s investigation remains open and on-going, and should the federal government exercise its exclusive jurisdiction as a result of violations of federal law in the context of (Bank Secrecy Act) and (anti-money laundering) laws, Resorts World, its owners, executives and culpable employees also will be held accountable for any such future actions.”

In simplest terms, they’re saying this isn’t over.

At this stage of his career, Control Board Chairman Kirk Hendrick surely knows what’s at stake. The Gov. Joe Lombardo appointee served throughout most of the 1990s in the state attorney general’s office, including several years in its gaming division, where he rose to chief deputy.

Hendrick was in the gaming division in the late 1990s at a time of a law enforcement investigation into illegal bookmaking and sports betting that included ties to organized crime and had connections inside at least one major Strip resort poker room. The investigation was politicized and eventually derailed, but briefly offered a glimpse into the real action that goes beyond behind the scenes and almost never makes the news.

A quarter century later, the poker room underworld is a little nervous, but alive and well. As long as it is a land where outlaws operate with impunity and are welcomed by hosts and hotel executives alike, the gaming industry will still have work to do — and its hard-won regulatory reputation will remain on the line.