CG Technology offers to pay a fine of $1.75 million to settle Nevada discipline action

CG Technology offers to pay a fine of $1.75 million to settle Nevada discipline action

  • Howard Stutz, CDC Gaming Reports
November 10, 2018 3:27 PM
  • Howard Stutz, CDC Gaming Reports
  • Other

Sportsbook operator CG Technology is offering to pay a $1.75 million fine to Nevada gaming regulators to settle a lingering disciplinary action, according to a filing with the state Gaming Commission.

The proposed settlement, which includes a separate $250,000 payment to the Nevada Council on Problem Gambling, would end a four-count complaint filed earlier this year by the Nevada Gaming Control Board.

The Gaming Commission will take up the matter next week in Las Vegas. It was unclear if commissioners would approve the settlement.

CG Technology agreed to a pay a $250,000 fine in a stipulated settlement with the Control Board in August, but the five-member Gaming Commission took an unusual step and unanimously rejected the agreement. Commissioners said during an hour-long hearing in Las Vegas the fine amount agreed upon with the three Control Board members was “too low” and the four-count complaint – the third such disciplinary action against the company in five years – amounted to a potential license “revocation.”

In a filing with the Gaming Commission posted to the agency’s website late Thursday, Las Vegas attorney Todd Bice, representing CG Technology, wrote that the “proposed order has been submitted to the board and the board does not reject to the form of the order or the resolution.”

Unlike the previous stipulated settlement agreement, the settlement offer was not filed nor signed-off by the Gaming Control Board members.

Gaming Control Board Chairwoman Becky Harris told CDC Gaming Reports Saturday the board “did not engage in settlement negotiations” with CG Technology, based on language in the gaming regulation covering disciplinary hearings.

“The board agreed not to affirmably object to the offer,” Harris said.

CG Technology operates sports books at seven Las Vegas Strip and Las Vegas-area casinos. The company has been the subject of multiple discipline complaints by gaming regulators. CG Technology paid multi-million-dollar fines for previous actions of $5.5 million in 2014 and $1.5 million in 2016, which led to the ouster of the company’s CEO.

A spokesman for CG Technology said the company would not comment until Thursday.

In the latest complaint, CG Technology was accused of accepting multiple wagers on the company’s mobile betting application placed by customers outside Nevada – including from Maryland, Texas, Arizona and California; accepting bets on games and events that had already concluded, miscalculating payouts on single game and round robin parlay wagers, and incorrectly setting up a satellite sports betting station at an undisclosed casino’s Super Bowl party.

The company self-reported the violations and CG Technology agreed to pay a $250,000 fine and agreed to transition within six months “to an unaffiliated third party’s sports pool wagering system.” All components that make up the company’s Cantor Sport Book were “deemed permanently disapproved… and will not be considered for future approval” by gaming regulators.

The Control Board said a mitigating circumstance for the fine was the company’s self-reporting of the missteps.

Gaming Commission Chairman Tony Alamo said at the hearing, “I have zero appetite to move forward with this settlement with CG Technology. My comfort level with CG Technology is zero. The country is watching. Frankly, we are the gold standard. Our licensees go out and do the job in every state. They have to be perfect.”

Control Board members were somewhat surprised by the Gaming Commission’s rejection, the first time in nearly a decade a stipulated settlement had been rejected.

CG Technology had to come up with a new settlement figure or face a disciplinary hearing in front of the Gaming Commission, which could cost the company its license to operate in Nevada.

Harris said in August the commission was within its rights to make “an independent evaluation of what they think is appropriate.”

CG Technology operates the sportsbooks at the Venetian, Tropicana, Cosmopolitan of Las Vegas, M Resort, Palms, Hard Rock and Silverton.

In addition to the amount of the fine and the payment to the problem gambling council, the only other change in the proposed settlement from the original document was CG Technology agreeing to transition to a new operating system in three months.

Howard Stutz is the executive editor of CDC Gaming Reports. He can be reached at Follow @howardstutz on Twitter.