You don’t need a credit line to know that the casino industry moves very fast these days.
From the latest technological developments that make it easier to play from laptops and mobile devices to the wildfire of legal sports betting sweeping state after state, the challenges to casino regulation are greater than ever. One only has to look at the scandal-ridden Resorts World Las Vegas on the Strip to find signs of the structural tensions in the system showing up.
The glitzy $4.3 billion mega-resort and several of its affiliates are facing a 12-count complaint filed by the Gaming Control Board (GCB) on August 15 alleging a blatant breach of the casinos’ duty of care to their customers. The complaint calls for disciplinary action that will jeopardize the casino’s privileged license and likely result in significant fines.
Other companies will certainly say that their own player compliance and anti-money laundering due diligence procedures are rock solid and that lapses in management judgement and strict regulation, while regrettable, are rare. However, anyone who follows the poker room underworld and observes the increasing pressure that some casinos’ marketing managers are under to attract and retain big customers may disagree.
Some will try to dismiss it as a casualty of the COVID economy that Resorts World was born into when it opened on June 24, 2021. You know, a series of unfortunate events. One could argue that out of necessity – or perhaps even desperation – Resorts World executives slacked off and opened the doors to sly guys and thinly disguised illegal bookies. In this case, I believe that would be a huge mistake.
Being a member of a church choir is not a requirement to play at a casino. The industry employs convicted felons and has often welcomed players with criminal pasts as long as they play with legitimate money. But Nevada’s gambling laws make no exception for entertaining felons convicted of gambling crimes. Quite the opposite. The lawsuit alleges that Resorts World casino managers welcomed players they knew or should have known were illegal bookmakers, had gambling convictions or had ties to organized crime.
Six of the charges focus on the high and undisciplined gambling of convicted illegal bookmaker Mathew Bowyer, who has recently become notorious for accepting and collecting millions in bets from Ippei Mizuhara, the former interpreter for Dodgers baseball star Shohei Ohtani. Bowyer and Mizuhara have already pleaded guilty to the charges.
Bowyer opened a line of credit in December 2021 and soon allocated $1 million for personal purposes. He posed as a real estate investor, but when Resorts World officials conducted a background check, they noted his limited source of income and previous bankruptcy, labeling him “medium risk” and commenting, among other things, that they could not confirm the source of his funds. He did not appear to have any other assets other than his home and condo.
By April 2022, he was already gambling high and his wife Nicole Bowyer was appointed as his personal “independent” casino marketing agent. The millions in cash flowed into the casino in the following months, even though the casino’s anti-money laundering committee could not determine the source of the funds and even though the casino’s director “stated that the customer is a known ‘bookie’ and uses his spouse’s Independent Host business as a front.” A separate GCB complaint was filed against Nicole Bowyer.
Another customer, identified in the complaint as “Customer A,” was able to lose approximately $10 million gambling even though casino officials knew he was “interfering” in sporting events. This, too, was overlooked.
But the decision to play the lavish host to convicted felons and crime gang members Edwin Ting and Chad Iwamoto, who was convicted for his role in one of the largest sports betting operations in Las Vegas history, is somewhat unfathomable. The complaint cites facts about Ting and Iwamoto that could easily be found with a simple Google search.
Resorts World was not an inexperienced operator caught off guard. Nor did it lack an infrastructure to ensure compliance with player policies. The anti-money laundering program was approved by senior management and applies to executives, employees and sales offices. The anti-money laundering program’s language is clear about the importance of maintaining “effective internal controls and procedures” and taking steps to “prevent the use of the casinos for money laundering or other criminal activities.”
Without any irony, it goes on to say: “No business opportunity is worth the potential risk of becoming involved in money laundering.”
That seems pretty clear.
After reading the complaint, it is clear that Resorts World did not lack sound anti-money laundering advice. Those who shaped the company’s casino culture simply refused to accept the advice they were given.
Controversy is nothing new at Resorts World. Within weeks of the casino’s opening, casino and law enforcement sources began seeing cheating players and convicted felons for gambling. Former president and COO Scott Sibella was sentenced to a year of probation and fined $9,500 after pleading guilty to a single count of bank secrecy violations. Sibella, a 35-year casino veteran, admitted that in his previous role as president of the MGM Grand hotel on the Strip, he knowingly allowed illegal bookmaker Wayne Nix to gamble for cash at the casino, in violation of the “Know Your Customer” provision of the law.
Nix pleaded guilty to three counts in April 2022 in an ongoing federal investigation that is also responsible for Bowyer’s arrest. Given a target-filled environment where poker room bookies and loan sharks have operated with apparent impunity until recently, it’s not far-fetched to assume more trouble is on the way.
Sibella was acquitted by the GCB in February 2023 after it investigated a Mexican restaurant at Resorts World called Tacos El Cabron, whose ownership structure included individuals linked to a major illegal gambling ring in California. Months later, Sibella was on track to be forced out of the industry.
Resorts World’s complaint does not mention Sibella’s name, but its contents raise further questions about his management of the casino and make the Gaming Control Board’s previous investigation, which cleared him of any wrongdoing, look even more like an attempt at political manipulation.
The current complaint almost ignores a statement that has additional weight given the current allegations and the growing number of actors involved: “The panel’s investigation is ongoing and ongoing. Should the federal government exercise its exclusive jurisdiction for violations of federal law under the Bank Secrecy Act and anti-money laundering laws, Resorts World, its owners, officers and guilty employees will be held accountable for such future actions.”
Simply put, they are saying: It’s not over yet.
Kirk Hendrick, chairman of the Board of Control, certainly knows what is at stake at this stage in his career. The Governor Joe Lombardo appointee spent most of the 1990s in the Attorney General’s office, including several years in the Gaming Division, where he rose to the rank of Deputy Attorney General.
Hendrick was in the gaming division in the late 1990s when law enforcement investigated illegal bookmaking and sports betting with ties to organized crime and at least one major poker room on the Strip. The investigation became politicized and eventually derailed, but it briefly offered a glimpse into what was really going on that goes beyond the background and almost never makes the news.
A quarter of a century later, the poker room underworld is a little edgy but alive and well. As long as it remains a land where outlaws operate with impunity and are welcomed by hosts and hotel managers alike, the gambling industry still has a lot of work to do – and its hard-won reputation as a regulator remains at stake.
John L. Smith is an author and longtime columnist. He was born in Henderson and his family’s Nevada roots date back to 1881. His stories have appeared in New Lines, Time, Readers Digest, Rolling Stone, The Daily Beast, Reuters, and Desert Companion, among others.
