The Nevada Gaming Commission Thursday granted an unrestricted license to media mogul Barry Diller. Diller serves on the MGM Resorts International board of directors, as his company holds 20% of MGM’s stock and, thus, requires licensing.
The Commission voted 4-1 after a 15-minute hearing in which Diller appeared by Zoom from New York.
Two years ago, the Securities and Exchange Commission launched an investigation into possible insider trading by Diller. When he applied for his gaming license at that time, the Commission limited him to a two-year license pending the outcome of the SEC’s review.
At issue was that Diller and fellow media mogul David Geffen and Diller’s stepson Alex von Furstenberg acquired a large number of shares of Activision Blizzard only days before the video-game maker agreed to be acquired by Microsoft for $68.7 billion. Activision shares soared on the news of the deal, and the Wall Street Journal reported the three men had an unrealized profit of about $59 million on an options trade.
Two weeks ago, the SEC sent a letter clearing Diller of insider trading. The SEC sent similar letters clearing the others investigated in the case, including Bobby Kotick, former CEO of Activision, Diller’s attorneys said.
Diller appeared relaxed and upbeat during the hearing in light of the approval recommendation from the Gaming Control Board.
“This investigation arose because of a coincidence. It was nothing other than we thought the company was undervalued. The SEC letter speaks for itself and I’m glad it’s finished.”
Commissioner Brian Krolicki said that gaming regulators must be notified within 48 hours about additional contact from federal authorities, as recommended by the Gaming Control Board.
“I appreciate all you do,” Krolicki said. “You’re eminently qualified. Serving on the Coca-Cola board and others, you have experience that very few people have. Good for MGM to have you on the board.”
In opposing the full licensing, Commissioner Rosa Solis-Rainey weighed in that the letter from the SEC didn’t exonerate Diller of any charges, but left it open that it could come back and reopen the investigation. She expressed her concern of the “unknown” and that the burden would shift to the Board or Commission should someone’s license needs to be revoked.
“The personal history is worth a lot to me,” Solis-Rainey said. “I wish there was a way to give him a non-restricted license with some caveat that if there’s any settlement or prosecution, he comes before us again. I in no way want to impugn his character or history of service to communities or his businesses.”
Commission Chair Jennifer Togliatti said she changed her position from two years ago, when she thought there should be a restricted license.
“A lot of folks would have stood up and taken the Fifth Amendment, not because they did anything wrong, but because they’re listening to 50 attorneys,” Togliatti said. “You didn’t do that and that goes a long way as far as I am concerned. I’m comfortable going forward.”
Commissioner George Markantonis said he’s satisfied with what they’ve received from the SEC and has “no hesitation” in supporting the application.
Newly installed Commissioner Abbi Silver said she’s confident there’s no need for a condition on the license and, as a former judge, is satisfied by the SEC letter that the investigation is concluded.
