MGM Casinos To Pay $7.45m Fine To Avoid Federal AML Charges

January 26, 2024
Two MGM Resorts International casinos in Las Vegas have agreed to pay a combined $7.45m to resolve alleged violations of federal anti-money laundering laws in a settlement connected to the guilty plea by former gaming executive Scott Sibella.

Editor's Note: This story was updated with comments from Nevada Gaming Control Board chairman Kirk Hendrick at 10:35 a.m. on Friday (January 26).

Two MGM Resorts International casinos in Las Vegas have agreed to pay a combined $7.45m to resolve alleged violations of federal anti-money laundering (AML) laws in a settlement connected to the guilty plea by former gaming executive Scott Sibella.

The fines to be paid by MGM Grand and The Cosmopolitan of Las Vegas are part of non-prosecution agreements (NPAs) that will allow the two casino-resorts to avoid charges for violations of the federal Bank Secrecy Act, the U.S. Department of Justice said Thursday (January 25).

As part of their NPAs, both properties have also agreed to undergo external reviews and enhance their AML compliance programs.

Sibella, 61, the former president and chief operating officer of Genting Group's Resorts World Las Vegas, pleaded guilty in U.S. District Court in Los Angeles on Wednesday to one count of failure to file suspicious activity reports (SARs) while he was president of the MGM Grand.

Sibella served as president of the MGM property from August 2017 until February 2019, during which time he knew that former minor league baseball player turned bookie Wayne Nix operated an illegal sports-betting business but still allowed him to gamble at the casino.

"I am pleased to have this investigation and its findings reaching a conclusion," Sibella said in a statement emailed to Vixio GamblingCompliance on Thursday. 

"I take full responsibility for my actions and inactions, but I must make clear I took no action for my personal benefit or inurement. I wish to thank the U.S. Attorney’s Office for its professionalism throughout this process."

Sibella added that he was proud of his 35 years of "contributions and leadership to the [gaming] industry that has meant so much to and has supported me." 

"As this process comes to a conclusion, I look forward to continuing to provide my knowledge, skills and insights to support the continued growth, evolution and professionalism of the gaming industry," he said.

MGM Resorts did not respond to a request for comment Thursday.

“The Nevada Gaming Control Board (NGCB) is aware of the actions taken by the U.S. Attorney’s Office for the Central District of California against Scott Sibella, a former president at the MGM Grand property in Las Vegas, as well as the MGM Grand Hotel and The Cosmopolitan of Las Vegas,” NGCB chairman Kirk Hendrick said in a statement.

Hendrick said the control board has been monitoring the situation, and “will ensure that all individuals and entities involved in Nevada’s gaming industry are held to the highest standards.”

In a 29-page court filing, Sibella admitted to allowing Nix to gamble at MGM Grand and affiliated casinos with illicit proceeds generated from an illegal gambling business without notifying the casino’s compliance department.

Not only did Sibella allow Nix to gamble at MGM Grand, but he also authorized Nix to receive complimentary benefits at the casino, including meals, room, board and golf trips with senior executives and other high net-worth customers of the casinos to further encourage Nix to patronize MGM properties.

Sibella failed to report to MGM compliance personnel that Nix was an illegal sports bookmaker. Because of Sibella’s failure to report the suspicious activity by Nix, MGM Grand failed to file at least one SAR regarding Nix’s source of funds in relation to Nix’s cash payments to MGM Grand.

Under the BSA, all casinos earning more than $1m in revenue per year are required to file SARs with the U.S. Treasury Department's Financial Crimes Enforcement Network (FinCEN) that inform the agency of any potentially problematic transactions associated with gambling.

According to court documents unsealed Thursday, Sibella admitted to law enforcement in 2022 that he believed Nix was involved in illegal sports bookmaking, and he “couldn’t figure out how he had all the money he gambled with.”

“I didn’t want to know because of my position ... in this business, they [bookies] are a dime a dozen ... I stay out of it.  If we know, we can’t allow them to gamble ... I didn’t ask, I didn’t want to know I guess because he wasn’t doing anything to cheat the casino,” Sibella told investigators.

Sibella is scheduled to be sentenced on May 8, at which time he faces a maximum penalty of five years in prison and a fine of $250,000.

In their respective NPAs, MGM Grand and the Cosmopolitan each admitted to laundering Nix’s illicit funds and failing to properly file SARs on Nix, who wagered millions of dollars overall between 2017 and 2020. 

MGM Grand also admitted that its compliance department failed to use all available information when performing know your customer (KYC) reviews of Nix.

Under the BSA, casinos such as MGM Grand and The Cosmopolitan are required to implement and maintain formal AML programs designed to prevent criminals from using casinos to launder the large sums of cash that illegal activity can generate.

By 2020, MGM Grand had accepted more than $4.07m and the Cosmopolitan $928,600 in cash in illicit proceeds from Nix’s illegal bookmaking operation, the Justice Department said.

Under the NPAs, MGM Grand agreed to pay a fine of $6.52m and to forfeit $500,000 in proceeds traceable to the violation, which will be counted towards the fine. The Cosmopolitan agreed to pay a monetary fine of $928,600 and forfeit $500,000.

The fines and Sibella’s guilty plea are the latest incidents resulting from the Justice Department’s investigation into Nix’s illegal bookmaking operation, which is alleged to have involved both former and current professional athletes.

Nix pleaded guilty in April 2022 to one count of conspiracy to operate an illegal gambling business and one count of subscribing to a false tax return. He is scheduled to be sentenced on March 6.

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