The age-old adage suggests that one occurrence is an accident, two is a coincidence, and three is a pattern. Wynn Las Vegas and the Nevada Gaming Control Board revealed on Thursday that the casino has accepted a $5.5 million penalty for violations of anti-money laundering laws linked to unlicensed money transfers, making it the third Las Vegas Strip establishment to encounter AML fines this year.
This six-charge complaint from the NGCB follows a federal non-prosecution agreement from last September. As part of that agreement, WLV forfeited over $130 million, deemed as the “largest forfeiture by a casino based on admissions of criminal wrongdoing,” according to the US Attorney’s Office for the Southern District of California.
In March, Resorts World Las Vegas was fined $10.5 million by Nevada regulators for AML violations tied to illegal bookmakers, awaiting sentencing. Subsequently, in the previous month, MGM Resorts paid $8.5 million for the same violation, settling with many of the same offenders. Although the Wynn fine is not linked to those incidents, it marks the latest regulatory stumble for America’s gambling hub.
The Nevada Gaming Commission will reach a final decision at its meeting on 22 May. In the two prior hearings, the commission approved the fines without any conditions.
“We are content that we have resolved this matter satisfactorily with the Nevada Gaming Control Board,” Wynn stated in a release. “Wynn Resorts is dedicated to conducting business with utmost integrity and adhering to all laws and regulations governing our sector.
“The inappropriate actions covered in the settlement, which breached Wynn’s own compliance protocols and procedures, were carried out by individuals with whom we cut ties a while back. We acknowledge responsibility for those actions and are relieved that the matter is now fully resolved.”
Human heads and flying money
The six charges in the board’s complaint pertain to various AML violations connected to a pattern of illegal money transfers. These violations trace back to at least 2014, according to the complaint.
“The NGCB complaint outlines situations where former Wynn LV staff permitted international clients to improperly obtain and/or transfer money for wagering purposes and placed wagers for other patrons at Wynn LV, breaching the gaming licensee’s Anti-Money Laundering Compliance Program,” stated the board in a release.
WLV reportedly evaded federal and state financial reporting regulations by channeling money through third-party agents, enterprises, and bank accounts to a Wynn-controlled account in California. Funds from that account were then moved to the WLV cage account and distributed by employees to foreign gamblers, enabling them to gamble freely without following proper reporting procedures.
The complaint referenced two additional violations related to so-called “human head” and “flying money” proxy schemes. The former involved WLV allowing third parties or “human heads” to act as proxy bettors for others who, for various reasons, couldn’t undergo regular AML checks.
The term “flying money” referred to unlicensed money transmitters who brought substantial amounts of cash to Wynn patrons. These patrons, who typically wouldn’t have access to cash, transferred the foreign currency equivalent to the transmitters along with a fee.
Australian similarities
Wynn’s infractions mirrored those of Australian operators Crown Resorts and Star Entertainment. Both companies faced significant setbacks from regulatory investigations in recent years, revealing illegal money transfers.
Both companies allowed Chinese gamblers to transfer gambling funds via China UnionPay bank cards. Such transfers are illegal in both countries, although the operators attempted to conceal them through various means.
The two operators collectively processed over AU$1 billion ($640.5 million) in illicit transfers, as per regulatory inquiries.
The gold standard?
Overall, the Wynn fine underscores a shifting regulatory landscape in Las Vegas. Despite the Strip and Nevada gaming experiencing record highs post-Covid, the specter of federal intervention looms large. All three AML investigations – Resorts World, MGM, and Wynn – were instigated by federal authorities, not state regulators.
Moreover, the fines issued have been deemed lackluster by many. Wynn holds the record for the largest state penalty, having been fined $20 million in 2019 for failing to address sexual harassment allegations against founder Steve Wynn. This case was also unearthed by a Wall Street Journal report, not state regulators.
Given the direct ties of these three AML cases to gaming operations, there was an expectation that the fines would mirror or surpass Wynn’s 2018 settlement. However, this has not been the case, and regulators seem inclined to settle the matters swiftly and move forward.
If anything, regulators have faced criticism for being overly complimentary. In one instance, NGC Commissioner Brian Krolicki hailed Resorts World Las Vegas’ new board as a “dream team” while issuing the second-largest regulatory fine in the state’s history.
Turnover at the top
The NGCB, in particular, has witnessed substantial turnover. Current chairman Kirk Hendrick is stepping down on 22 June, over a year before his term ends.
Former Gaming Arts CEO Mike Dreitzer will succeed him, becoming the fifth chair since January 2019.
“The transition to Chairman Mike Dreitzer will be seamless,” Hendrick commented in a statement. “Mike and I have known each other for nearly 30 years, going back to our days in the attorney general’s office. Governor Lombardo has made the ideal choice, considering Mike’s extensive career in gaming law, government, regulatory compliance, and business.”
The board, responsible for much of the day-to-day regulatory work, currently comprises Hendrick, Chandeni Sendall, and George Assad, a former Las Vegas judge. With Hendrick’s departure and Sendall’s appointment in January, Assad is technically the most senior board member, having been appointed in 2023.
During the same period, Assad’s son, Anthony Carleo, stole $1.5 million in chips from the Bellagio and was sentenced to three to 11 years in prison in 2011. Assad, around that time, received the lowest retention score among judges in the Las Vegas Review-Journal‘s “Judging the Judges” survey.
