Wynn Resorts took responsibility for violations that led to its forfeiting of $130 million to the federal government, as the Nevada Gaming Commission Thursday approved a $5.5 million fine. The Commission also expressed concerns about the third recent high-profile case involving Strip operators damaging the reputation of Nevada’s casino industry.
Following a 90-minute hearing, the vote was 4-1, with Commissioner Rosa Solis-Rainey saying the fine should have been higher in the settlement agreement between the Gaming Control Board and Wynn.
Commissioner George Markantonis was one of the most vocal members in chastising Wynn, saying there were many eyes on Thursday’s hearing and that he hopes one result is an education for the entire industry.
“Wynn isn’t the first involved in cases like this,” Markantonis said. “We’ve had several others. We’ve taken a reputational bruising from our own casino-resorts and from people who operate in them. Probably the biggest damage besides the fines is that there’s reputational damage. … This is a huge body blow for us.”
Unlike recent cases, in which Resorts World Las Vegas was fined $10.5 million and MGM Resorts International was fined $8.5 million, Wynn’s cases didn’t involve catering to illegal bookmakers moving millions of dollars.
In Wynn’s case made public in September, the company settled criminal allegations that it conspired with unlicensed money-transmitting businesses worldwide to transfer funds to benefit itself. Wynn reached a “non-prosecution agreement” with the U.S. Department of Justice to resolve the 10-year-old investigation over the money transfers from funneling funds to gamblers at the Wynn Las Vegas.
The complaint alleged Wynn employees allowed international patrons to obtain and transfer money improperly for wagering and allowed wagers to be placed for other patrons at Wynn Las Vegas in violation of the gaming licensee’s anti-money-laundering requirements. Wynn, which said the employees involved were terminated, has agreed to do additional employee training on AML requirements.
Markantonis said that while Wynn terminated five to six people, they’re not out of the job market. He likened them to an invasive fish species in which somebody threw them back in the lake and will pop up in other resorts. Background checks by casinos should stop this, he noted.
“The message should go out to the industry that it’s not just Wynn that gets reputational damage,” Markantonis said. “Those people who were terminated: We have your number. We have your name and one day you may be standing in front of us. It will affect your future career.”
While casinos say that they have a program in which employees are encouraged to come forward, Markantonis said he’s “heard every Tom, Dick, and Harry excuse.”
Markantonis said it comes from the top and believes there’s a different tone in the Wynn organization today to address the lapses, as the Commission heard from Wynn’s Board Chairman Phil Satre and others. He concluded however, with a warning to all casinos.
“I want to let everyone know in the industry we’re not taking prisoners anymore,” Markantonis said. “Enough is enough. The BS is over. It doesn’t matter how fancy your title is.”
Commissioner Brian Krolicki said none of this has been easy. When he first read the complaint, he found it “beyond egregious.” There were “hundreds of transactions, numerous people and not just a few bad actors, but almost a systemic accommodation to some of these things.”
Krolicki added, however, that he did his due diligence and is calmer than a week ago. He noted that the case emanated from the so-called 1960 complaint of the Financial Crimes Enforcement Network prohibiting operating an unlicensed or unregistered money-transmitting business when transferring money is typically considered a normal act. But he then cited a former Wynn executive flying to the U.S. from Asia with a customer who wasn’t allowed in the country due to criminal associations.
“There was a lot going on and oh my gosh was that a red flag,” Krolicki said. “Was it contained in the group [from Asia]? Apparently so.”
Krolicki said the Commision has been accused of being modest with its fines, but it falls in context of past history when the allegations occurred.
While culture and language can conceal bad actors, and dealers and others may not see what’s going on, that doesn’t make it right, Krolicki said. Though praising Wynn for taking responsibility and taking steps to address the past misdeeds, he said the Gaming Control Board wouldn’t bring it to the Commission if it wasn’t a worthy case and fine.
“This is not a sunny day for our industry,” Krolicki said. “We’ve had a monthly drill of speaking about AML and a 1960 case here. It’s a distinction with a difference, but it still gets piled into the same heap. People didn’t perform and compliance failed, but how it failed is critically important. I believe this is a pivot and a clarion call to the industry. This is unacceptable.”
Solis-Rainey said she appreciates the efforts of Wynn, but wouldn’t support the agreement, saying the violations are “egregious” and the amount is “much too low for the type of conduct.”
Commissioner Abbi Silver said she initially had reservations about the fine being too low as well and asked Solis-Rainey to help her understand her position.
Solis-Rainey replied that while the conduct was filed by the federal government under the 1960 regulations, the conduct has AML implications. It should have been identified and addressed by Wynn when the money was coming into the property from abroad.
The fine level is tied to an AML case a decade ago against Las Vegas Sands, since the violations happened in the same time frame. That fine was $2 million in 2014.
“To say the new Wynn is paying a very heavy price for the old Wynn is putting it mildly,” said Commission Chair Jennifer Togliatti. “That money was gone long ago, so the new Wynn is bleeding forfeiture money like nobody’s business to make this right for the government and make this right for their company. I think that’s something that’s been acknowledged by the Board and I’m going to acknowledge that when I vote yes.”
