Nevada Operator Accepted Hundreds Of Improper Sports Bets, Regulator Says

September 24, 2021
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Nevada gaming regulators have filed a complaint accusing Las Vegas-based Station Casinos of accepting hundreds of wagers on sports after the game’s outcome had been determined.

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Nevada gaming regulators have filed a complaint accusing a Las Vegas-based gaming company of accepting hundreds of wagers on sports after the game’s outcome had been determined.

In a two-count complaint dated September 13 and published this week, the Nevada Gaming Control Board (NGCB) seeks to discipline Station Casinos after the company’s sportsbook at Red Rock Resort accepted 348 such bets through its Stadium Live mobile betting system over a three-year period.

The NGCB said on March 18, 2021 that Red Rock reported a malfunction of its sports wagering system to the board. That malfunction caused the Red Rock sportsbook to accept money and write approximately 167 sports wagering tickets on events whose outcomes had already been determined.

According to the complaint, Station Casinos blamed a malfunction that was caused by insufficient server memory for its Stadium Live program for issuing the tickets, which were voided with customers being refunded.

However, the NGCB said in the 13-page filing that the company was already “well aware of prior computer errors related” to the Stadium Live program.

The NGCB complaint said the program accepted potentially improper bets in June 2018, January 2019 and March 2019, with the board issuing warning letters in August 2018 and March 2019 related to the incidents.

Regulators told the company that it needed to have a “redundant monitoring” process in place to ensure the system does not accept wagers after an event’s betting period has closed.

The NGCB said the company was “well aware” of the computer issues and failed to ensure that process was in place.

“[Station Casinos’] failure to ensure these processes were in place … reflects or tends to reflect poorly on the reputation of gaming in Nevada,” the complaint said.

The complaint was signed by all three control board members.

A stipulated settlement between the NGCB and Station Casinos, whose parent company is Red Rock Resorts, has not been agreed to, and a hearing in front of the Nevada Gaming Commission (NGC) has not been scheduled. The NGCB’s complaint requests that the NGC issue a fine against Station Casinos and consider action to limit, condition, suspend or revoke the license of the operator in accordance with Nevada gaming regulations.

“Respondents are responsible for any violations related to the Stadium Live program,” the complaint said. “Toleration of such repeated violations constitutes grounds for license revocation or other disciplinary action.”

Messages left with Red Rock Resorts were not returned.

This is not the first time the control board has issued a complaint involving wagers on sporting events that have already concluded.

In 2018, sportsbook operator CG Technology paid $2m to settle a four-count complaint issued by the NGCB. One of the counts involved accepting wagers on events that had already concluded.

As part of the settlement, CG Technology also agreed to discontinue use of its own sports-betting system within three months and instead “transition to an unaffiliated third-party sports pool wagering system.”

The complaint indicates the need for gaming licensees to be continually educating themselves on compliance matters, Brendan Bussmann, director of government affairs with Global Market Advisors, said.

“While mistakes will happen on occasion, it’s about how you react and correct to make sure it does not happen in the future,” Bussmann said. “Borrowing the sports analogy that you learn more from a loss than a win, this is a key example of how you can turn a mistake into a learning opportunity to focus on making sure issues like this do not happen in the future.”

MGM’s Buyout Approved

In a separate development in Nevada, the four-member NGC on Thursday approved MGM Resorts International’s $2.1bn buyout of Dubai World’s 50 percent stake in CityCenter in Las Vegas.

The transaction is expected to close in October, but MGM will not hold onto the resort and shopping center for very long.

The company will establish two separate property companies for Aria and the non-gaming Vdara hotel. Both properties will then be sold for $3.89bn to Blackstone Group, which will lease them back to MGM for $215m a year.

The deal marks an end to MGM owning property along the Las Vegas Strip.

Over the last five years, the gaming company has sold off the real estate it owns to Blackstone or affiliated real-estate investment trust MGM Growth Properties (MGP) to maximize revenue through leasing and managing resorts.

Nationwide, only the property associated with MGM’s casino in Springfield, Massachusetts, is owned directly by the company. The company expects to complete the sale of MGM Springfield to MGP for $400m by the end of the year.

By early 2022, MGM will have transformed itself into an “asset-light” company or an operator only of gaming properties with the sale and lease back of properties completed in Nevada and across the U.S.

Commissioner Steven Cohen expressed some concern Thursday that MGM’s asset-light strategy may leave the company without enough cash to meet its financial requirements in another economic downturn.

Patrick Madamba, MGM’s senior vice president and legal counsel, said in the immediate past with the closure of casinos due to the coronavirus pandemic, “we had enough cash.”

Madamba told the commission the company will have “sufficient equity in the future.”

As VIXIO GamblingCompliance reported, NGC chairman John Moran Jr. stepped down after Thursday’s meeting, ending a 14-year run on the commission. Cohen will serve as acting chairman until Governor Steve Sisolak, a Democrat, fills the two vacancies created by the departures of Moran and commissioner Deborah Fuetsch.

Both the control board and the commission have several high-profile deals to consider possibly by the end of this year or early in 2022.

Those deals include the $6.25bn sale of the Palazzo, Venetian and the Sands Expo and Convention Center by Las Vegas Sands to Apollo Global Management, VICI Properties' $17.2bn acquisition of MGP, and Bally’s Corporation’s $150m deal to acquire the gaming assets of the Tropicana Las Vegas from Gaming and Leisure Properties.

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