In November, the Nevada Gaming Commission fined Caesars $7.8 million. The case involved Mathew Bowyer, a bookie from California who placed bets with several Las Vegas casinos. The state held that the casinos failed to properly vet Bowyer and that he had no source of income to support his level of gambling. Resorts World and MGM were previously fined over Bowyer, $10.5 million for Resorts World and $8.5 million for MGM.
Bowyer become famous when a federal investigation found that Ippei Mizuhara, the Japanese interpreter for the mega baseball star of the Los Angeles Dodgers, Shohei Ohtani, had been embezzling money from Ohtani to gamble on sports. Mizuhara placed bets with Bowyer who then used the money to place bets in Las Vegas. The case was embarrassing for the Dodgers, Ohtani, Nevada gaming regulators, and Resorts, World, MGM, and Caesars.
Bowyer and Mizuhara faced the courts and will pay a heavy price for their activities. But the Nevada regulators put the blame on the casinos and fined them record amounts. Since the actions by Nevada, the casinos have doubled down on their diligence, trying to ensure it does not happen again. It is not an easy task for corporate management.
Betting takes place on the casino floor; high-level bettors do attract the notice of casino management at the floor level. Those managers are charged with following the rules and vetting the gamblers where required. But sometimes conflictingly, they are also charged with driving the numbers. Occasionally, an overly ambitious manager ignores the warning signs and goes for the money over compliance. A recent case in Australia revealed managers routinely made that choice. Corporate management and the board of directors are not consulted; it is not required, except in very unusual conditions. However, the top managers and the company itself are held accountable by the regulators.
Those people take compliance with the law very seriously, as they must. Violations of regulations can lead to fines and in extreme cases, the loss of a license. That is the key: No company would willingly risk a gaming license over one bet, one gambler, or any other temporary event. The three companies in this case have billions of dollars invested in Nevada and Las Vegas produces the core of their income. The loss of a Nevada license would be devastating. It would probably also lead to a loss of licenses in other jurisdictions and not just for the companies, but also for the key individuals.
It would be analogistic to a basketball player who throws a game for a few thousand dollars and in the process loses his career. Not a good choice at the individual level and an impossible choice at the corporate level. Gary Carano, chairman of the board of directors of Caesars, appeared before the Gaming Commission to apologize and assure the state that Caesars, the Carano family, and he fully understood the importance of regulation and the significance of compliance.
Gary said, “Before you hear from our team today, I want to state clearly the way our (anti-money-laundering) program operated in this instance was unacceptable. On behalf of Caesars, our employees, our entire leadership team, and board of directors, I apologize for our role in the Bowyer incident and the impact it had on the gaming industry in Nevada. Compliance has always been part of our DNA. From Day 1, we have understood that a gaming license is a privilege and a responsibility to protect the health, safety, welfare, and morals of Nevada’s residents. My father was adamant about that and instilled that in my family.”
The regulations in Nevada have a catchall phrase that covers the case in the broadest sense: 5.011 Grounds for disciplinary action. “The Board and the Commission deem any activity on the part of any licensee, his agents or employees, that is inimical to the public health, safety, morals, good order and general welfare of the people of the State of Nevada, or that would reflect or tend to reflect discredit upon the State of Nevada or the gaming industry, to be an unsuitable method of operation and shall be grounds for disciplinary action.”
In his heartfelt apology, Gary Carano recognized the obligation to operate within the regulations and to uphold the reputation of the state of Nevada, its regulatory structure, and the casino industry. Nevada does not try and define every possible action; instead ,it has a requirement that cannot be nuanced or loopholed. The Bowyer case was open and shut for regulators; follow the rules and if the rules do not completely cover it, then remember thou shall not bring shame upon us. Caesars and the Carano family stood up and owned their error. And by doing so, Gary, his family, and the corporation brought credit to themselves and Nevada regulations.
