Even without a line of credit, you can see that the casino industry moves very fast these days.
From modern technological changes that make gambling easier from laptops and mobile devices to the growing craze for legal sports betting across states, the challenges to regulating casinos have never been greater. Signs of the system's structural stresses are evident in the scandalous Resorts World Las Vegas on the Las Vegas Strip.
The glittering $4.3 billion mega-resort and its related entities were served with 12 complaints with the Gaming Control Board (GCB) on August 15th alleging shockingly poor customer due diligence regarding casino compliance. The complaints seek disciplinary action, putting its privileged license at risk and likely resulting in hefty fines.
Other companies would argue that their player compliance and anti-money laundering due diligence is solid and that management errors of judgment or lapses in regulatory rigor are unfortunate but rare. But those who follow the underbelly of poker rooms and have witnessed the increasing pressure that casino marketing executives at some establishments are under to attract and retain big-time customers might disagree.
Some will be tempted to write this off as a casualty of the COVID-19 economy when Resorts World opened on June 24, 2021. You see, a series of unfortunate events. An argument could be made that Resorts World executives, out of necessity or desperation, cut corners and opened the door to unscrupulous players and flimsy illegal bookmakers. In this case, I think that would be a huge mistake.
Being a member of a church choir is not a requirement for gambling in a casino. The casino industry has employed convicted felons and has welcomed players with criminal records as long as they gambled with legal funds. However, Nevada's gaming laws contain no exemptions for hosting felons convicted of gambling offenses; quite the opposite is true. According to the complaint, Resorts World casino executives welcomed players they knew or should have known were illegal gamblers, had gambling-related criminal histories, or had ties to organized crime.
Six of the indictments focus on the high and undisciplined play of convicted illegal gambler Matthew Bowyer, who gained notoriety recently for booking and collecting millions of dollars in sports bets from Ippei Mizuhara, the former interpreter for Dodgers star Shohei Ohtani. Both Bowyer and Mizuhara have already pleaded guilty to felony charges.
Bowyer opened a line of credit in December 2021, immediately advanced $1 million for personal play, and registered as a real estate investor, but when Resorts World employees ran a background check on him, they classified him as a “medium risk” because of his limited sources of income and a history of bankruptcy, and commented that they could not verify his source of funds. He does not appear to have any assets other than his home and condominium.
By April 2022, he was playing high and his wife, Nicole Bowyer, was tapped as his personal “independent” casino marketing agent. Millions of dollars in cash flowed into the casino in the following months, even though the casino's anti-money laundering committee was unable to identify the source of the funds and the cage director “stated that the customer was a known 'bookie' and was using it as a front for his spouse's independent host business.” A separate GCB complaint has been filed against Nicole Bowyer.
Another customer, identified in the lawsuit as “Patron A,” managed to lose approximately $10 million by gambling even though casino officials knew he would be “acting up” at sporting events, which also went unnoticed.
But the decision to favor convicted felons and organized crime associates Edwin Ting and Chad Iwamoto, who were convicted of participating in one of the largest sports betting operations in Las Vegas history, is in some ways hard to understand. The indictment lists facts about Ting and Iwamoto that are easy to Google.
Resorts World was not an inexperienced operator that was caught off guard, nor did it lack a player compliance infrastructure. The company's anti-money laundering program was approved by the company's executive leadership team and applies to its directors, employees and satellite marketing offices. The language of the anti-money laundering program makes clear the importance of maintaining “effective internal controls and procedures” and measures to “prevent the casinos from being used for money laundering or other criminal activity.”
Without a trace of sarcasm, he adds, “There is no business opportunity worth the risk of being caught up in money laundering.”
That seems pretty obvious.
Reading the complaint, it's clear that Resorts World did not lack proper due diligence advice on anti-money laundering — the people who defined the casino culture simply refused to follow the advice they were given.
Controversy is nothing new at Resorts World. Casino and law enforcement officials began seeing unscrupulous players and felons with convictions for gambling there just weeks after the property opened. Former president and chief operating officer Scott Civella was sentenced to one year of probation and fined $9,500 after pleading guilty to one count of violating the federal Bank Secrecy Act. Civella, who has worked in casinos for 35 years, admitted that in his previous job as president of the MGM Grand Hotel on the Strip, he knowingly allowed illegal gambler Wayne Nicks to gamble cash at the casino, violating the “know your customer” provisions of the law.
The Knicks pleaded guilty in April 2022 to three felony charges in the same federal investigation that led to Bowyer's downfall, and it's not unreasonable to expect more trouble to come, given the targeted environment in which poker room bookmakers and loan sharks operated with impunity until recently.
Civela was exonerated in February 2023 by the GCB after it investigated Resorts World's Mexican restaurant, Tacos El Cabron, whose owners included people connected to a major illegal gambling ring in California. A few months later, Civela was banned from the industry.
While Resorts World's complaint does not name Sibella, it raises further questions about his casino operations and makes a previous Gaming Control Board investigation that cleared him of wrongdoing look even more like political sabotage.
One sentence that is largely overlooked in the current indictment but carries even more weight given the current allegations and the growing number of players involved: “The Commission's investigation remains open and ongoing, and if the Federal Government exercises exclusive jurisdiction as a result of any violations of Federal law in the context of the (Bank Secrecy Act) and (Anti-Money Laundering) Act, Resorts World, its owners, officers and responsible employees will also be liable for any such conduct in the future.”
Simply put, we're saying this isn't over yet.
Board Chairman Kirk Hendrick certainly knows what's at stake at this stage in his career. An appointee of Gov. Joe Lombard, Hendrick spent much of the 1990s in the state Attorney General's Office, including several years in the gambling division, where he rose to the position of chief deputy attorney general.
Hendrick served in the gambling division in the late 1990s at a time when law enforcement was investigating illegal gambling and sports betting with ties to organized crime, and he had connections to at least one major resort poker room on the Strip. The investigation was politicized and ultimately derailed, but it offered a glimpse into the real operations that went on behind the scenes and rarely made the news.
A quarter century later, the underbelly of poker rooms is alive and well, if a little uneasy. As long as it's a world in which outlaws can operate with impunity and are welcomed by hosts and hoteliers, the gambling industry still has work to do, and its hard-won regulatory reputation remains in jeopardy.
John L. Smith is an author and longtime columnist. He was born in Henderson and his family roots date back to 1881. His work has appeared in Newlines, Time, Reader's Digest, Rolling Stone, The Daily Beast, Reuters, Desert Companion and more.
