Brian Sandoval, Chairman of the board of Resorts World, told the Nevada Gaming Control Board that Resorts World had put its anti-money-laundering issues behind it. Sandoval said the property is better off and it has brighter prospects than before.The GCB welcomed his comments.
Brian Sandoval is a former Governor of Nevada, Chairman of the Nevada Gaming Commission, and is the President of the University of Nevada Reno. Sandoval was named to the Resorts World board a year ago and named Chair in November to replace Jim Murren. Murren recruited Sandoval to Resorts, having worked with him as Governor and with MGM after Sandoval left office.
The Nevada Gaming Control Board recommended Sandoval for licensing with Resorts, along with AG Burnett, gaming attorney and former Chair of the Gaming Control Board. The GCB is pleased with the changes at Resorts. Control board member Geoge Asad said, “the property is in really good hands, and if this board would have been in place at the time, it would have eliminated (the problems with AML),” Assad said.
The Nevada regulators wanted someone reliable in charge of compliance, a person paying attention and someone to hold accountable. In Sandoval and Burnett, the state has that person, actually two people. Each is an attorney and former regulator. Sandoval was more – he was Governor, Attorney General, and a federal judge. For the past five years, Sandoval has been President of the University of Nevada, Reno. To say he is trusted and respected is an understatement.
Recently a friend asked me if I thought appointments like that of Sandoval and Burnett could make a difference in a corporate culture. Yes, absolutely. If Sandoval can change the culture at Resorts World Las Vegas is not a question for regulators. The regulators are certain Sandoval and Burnett can and will make a difference. Gaming regulators everywhere put more faith and trust in high profile people with good reputations than in other people. Anyone might have the background and skills to right the focus of Resorts World, but not the credibility with regulators; and in this case it is essential. Bankers and financiers are the same – any company looking to finance a major project had best have a CFO or CEO known and trusted by Wall Street. Amateurs need not apply.
Nevada has often leaned heavily on individuals in times of regulatory crisis. When the Stardust skimming scandal erupted in 1976, Nevada looked to the Boyd family to fix the mess and save Nevada’s reputation. Boyd did the job, cleaning out the culture of corruption, and creating a successful and law-abiding casino in the process.
When Steve Wynn resigned over a Wall Street Journal article accusing him of sexually inappropriate behavior, Phil Satre stepped in to repair the reputation of Wynn Resorts. Steve Wynn was a superb casino operator, but he was also a bit of a Wild West outlaw. Wynn Resorts today is every bit as good a casino-operating company as it was under Steve, but the Wild West element is gone. One person cannot change a culture, but one person with the authority and mission to make changes can.
It is a matter of focus and priority. Boyd ran Stardust as a casino, a successful casino, but Boyd did not lose sight of following the law and reporting all of the revenue to the state. Satre did not dismiss the importance of profit creativity and innovation at Wynn, but he did raise the importance of behavioral standards. Sandoval and Burnett understand the importance of building a profitable business. But they also understand the importance of following all of the applicable laws and regulations. Taking a large bettor while ignoring the bettor’s source of money will not be acceptable.
In Nevada, money laundering is a big deal. The regulations put the responsibility to track large cash transactions and report anomalies on the casino. The state expects a casino to be aware of the bettor as a person. If that person is betting usually large sums of money to know his or her source of income. Nevada, like all states, uses the Bank Secrecy Act as a guide. Money laundering laws are federal. Each state has regulations that are designed to meet federal standards. Keeping to those standards is critically important for the state. Companies like Resorts that are new to the Silver State may not realize just how big of a deal compliance to those standards is to Nevada regulators.
Nevada does not want the federal government involved in gaming in the state. Nevada has gone round and round with the feds over regulation since the days of Bobby Kennedy. Kennedy threatened to bring federal law enforcement officers into Las Vegas and drag the mobsters out by the collar. The state does not want federal oversight or federal intervention; it sends shivers down the spine of regulators and operators alike. When it comes to federal law, Nevada is diligent. That diligence makes Brian Sandoval even more important.
Nevada needs someone it trusts. In this case, Sandoval will be guarding Nevada’s reputation, have the state’s back and will be keeping the feds at bay. Now the threat of federal intervention is not as real as it was in the 1950s and 60s, but the memory is still there. To ensure that gambling is fair and honest is the purpose of regulation; and parenthetically to protect the state’s reputation. Those regulations were and are Nevada’s answer to the federal government and other critics around the country. Regulation is very, very important in Nevada. Previous management at Resort World may not have appreciated that importance.
Sandoval and Burnett do.
