On August 15^th, the Nevada Gaming Control Board (NGCB) filed a 12-count complaint against Resorts World Las Vegas (RWLV) alleging significant regulatory violations related to the casino’s anti-money laundering (AML) controls. According to the NGCB, RWLV allowed known illegal bookmakers and individuals with ties to organized crime to gamble millions of dollars over an extended period without proper scrutiny or due diligence.

None of the allegations have been proven at the time of this blog post and the NGCB complaint comes in the wake of significant federal enforcement actions against other casinos, including the 2024 Non-Prosecution Agreements involving MGM Grand and The Cosmopolitan of Las Vegas. Both casinos were implicated in a money laundering probe linked to an illegal sports-betting operation. MGM Grand agreed to pay a $6.52 million fine and forfeit $500,000, while The Cosmopolitan was fined $928,600 and also forfeited $500,000. These cases underscore that other casinos – including those on the Las Vegas Strip – may be equally vulnerable to such illicit activities if they do not maintain robust compliance programs.

Regulation 5: Don’t Discredit the Industry

Much of the complaint references Nevada Gaming Commission Regulation 5, which provides the rules for the operation of gaming establishments in the state. In particular, the complaint relies largely on violations of Regulation 5.011. Regulation 5.011 lists specific acts or omissions that are grounds for disciplinary action. These include, but are not limited to:

• Conduct that discredits the gaming industry or the State of Nevada.

• Associating with persons of “notorious or unsavory reputation”, or individuals known to have criminal records or involvement in illegal activities.

• Engaging in any fraudulent practices.

• Failure to comply with any federal, state or local laws or regulations related to the operation of a licensed gaming establishment.

• Engaging in activities that compromise the integrity of gaming operations.

Of note, Regulation 5.011 was also used in the 2015 NGCB complaint against Caesars Palace following federal enforcement actions related to numerous AML and Bank Secrecy Act (BSA) violations. It’s not a stretch to say that future enforcement actions from the NGCB will likely involve this regulation, so Nevada casinos would be well advised to brush up on their obligations.

Background: The Players

Mathew Bowyer, Edwin Ting, “Patron A” and Nicole Bowyer are key figures in the complaint.

Mathew Bowyer gambled millions of dollars at RWLV over 20 months, despite concerns about the legitimacy of his funds. His financial background included a bankruptcy, and there was limited transparency about his business activities, raising red flags about the source of his gambling money. Despite these concerns, Bowyer was not subjected to the type of enhanced due diligence that such a profile warranted. On August 9^th, Bowyer pleaded guilty to running an illegal gambling business that took in unlawful sports bets, including bets from baseball star Shohei Ohtani's former interpreter.

Edwin Ting, another central figure identified in the complaint, was closely associated with Bowyer. Ting had a history that should have attracted attention, given his 2014 conviction for operating an illegal gambling business. The relationship between these two individuals and their financial dealings should have triggered enhanced due diligence and risk mitigation measures, but instead the complaint alleges that their activities were allowed to continue largely unchecked.

Patron A, another high-roller linked to Bowyer and Ting, engaged in similarly suspicious financial transactions that should have raised alarms about potential illicit activity.

Complicating the situation further, Bowyer’s spouse (Nicole Bowyer) was, at one point, acting as his casino host. This arrangement introduced a clear conflict of interest, as the casino host's role is to ensure client satisfaction while adhering to regulatory standards. The personal relationship between Bowyer and his host likely had some influence in how his activities were monitored and reported, undermining the casino's ability to effectively enforce compliance with AML measures.

Nicole Bowyer is subject to a separate NGCB complaint for allegedly acting as an agent for an illegal bookmaker and for failing to cooperate with Gaming Control Board agents.

Source of Funds: An Ongoing Challenge

Source of funds has been a common theme in regulatory enforcement actions, and one of the most glaring issues in the NGCB complaint was the alleged failure to adequately verify the source of funds being used to gamble. In the gaming industry, understanding the source of a patron's funds is crucial to prevent money laundering and other illicit activities. Despite the large sums of money being transacted, the casino apparently did not conduct a thorough inquiry into the legitimacy of these funds.

Given the substantial risk associated with accepting large cash transactions from patrons without clear and documented sources of income, the lack of diligence in this area is concerning. This failure has not only exposed the casino to potential legal and regulatory consequences but also highlighted a significant gap in their BSA/AML compliance program. Effective due diligence requires that casinos not only ask the right questions but also follow through with rigorous verification processes to ensure that funds entering the gaming environment are lawful.

Casino Hosts: A Weak Link?

Casino hosts play a crucial role in interacting with high-profile clients, and their actions can have significant implications for the integrity of the casino’s operations. In this case, there were multiple instances where casino hosts allegedly failed to report suspicious activities and, in some cases, may have actively participated in unethical behavior.

For example, one casino host, referred to as RWLV Host 1, was informed by Bowyer that he "runs a book" and was asked to refer clients to Bowyer in exchange for money. Despite feeling uneasy about the situation, RWLV Host 1 failed to report this interaction to the casino. Another host, RWLV Host 2, was informed by Patron A that Bowyer was “taking action”, yet this information was also not reported.

This behavior reflects a broader issue within the casino industry, where the pressure to attract and retain high value clients can sometimes lead to compromised compliance outcomes. The allegations in the NGCB complaint serve as a stark reminder that casino hosts must be adequately trained and monitored to ensure that they adhere to all regulatory requirements, regardless of the value of the patron they are serving.

Compliance Committee: Inaction and Redaction

Over a series of meetings, the compliance committee repeatedly raised concerns about the activities of the individuals named in the complaint, yet allegedly failed to take the necessary steps to mitigate the risks. The role of a compliance committee is to identify and address potential risks before they escalate into major issues. In this case, the committee's apparent reluctance or inability to act allowed potentially illegal activities to continue unchecked, putting the entire casino at risk.

The NGCB complaint also notes the deliberate redaction of the word "bookie" from the committee’s meeting minutes. By striking this term from the record, the committee effectively downplayed the seriousness of the situation, which may have exacerbated the lack of action taken.

The Need for Robust Transaction Monitoring

The NGCB complaint underscores the critical need for robust transaction monitoring systems within the casino industry. Modern technology can provide compliance teams with the tools they need to identify and promptly respond to suspicious activity and potential AML violations.

In this case, the alleged failure to monitor and investigate large cash transactions allowed some high risks patrons to continue gaming without adequate scrutiny. A more effective transaction monitoring system, combined with a culture of compliance that encourages the reporting and investigation of suspicious activities, could have prevented the escalation of this situation.

Moreover, transaction monitoring should not be a passive process. Casinos must ensure that their systems are not only capable of flagging unusual transactions but that these alerts are followed up with thorough analysis and investigation. Compliance staff must be empowered to act on the information provided by these systems, with clear procedures in place for escalating issues to the appropriate authorities when necessary.

Patron Due Diligence: A Non-Negotiable Requirement

Effective patron due diligence is another area where the casino allegedly fell short. Due diligence involves more than just verifying a patron's identity; it requires a comprehensive understanding of their financial background, the source of their funds, and any potential risks they may pose to the casino.

In this instance, the casino's failure to conduct thorough due diligence on the patrons allowed them to engage in activities that should have raised immediate red flags. Casinos must implement stringent due diligence processes that are consistently applied to all patrons, regardless of their perceived value to the business. As FinCEN’s Culture of Compliance Advisory clearly states: compliance should not be compromised by revenue interests.

This case also highlights the importance of ongoing due diligence. Even after a patron has been initially vetted, casinos must continue to monitor their activities and re-evaluate their risk profile as new information becomes available. This ongoing process is essential for identifying and mitigating risks before they can allow criminal activity to flourish and cause significant harm to the casino's reputation

Penalties: What Resorts World is Facing

The NGCB complaint proposes the following actions:

1. The Commission issue a monetary penalty to RWLV pursuant to each violation;

2. The Commission take action against RWLV’s gaming license; and

3. The Commission consider the appointment of an independent supervisor.

With regard to the monetary penalty, the complaint states that each day the patrons were allowed to continue playing at the casino – despite the unresolved issues surrounding the source of their funds and the potential for money laundering – constitutes a separate violation. From a regulatory enforcement perspective, this means that RWLV could face cumulative penalties for each individual day of non-compliance, significantly increasing the potential financial and legal consequences.

In addition, any conditions placed on RWLV’s gaming license, and the costs involved in appointing an independent compliance monitor, could substantially increase the quantum of the regulatory penalty. The alleged repeated failures to act on these violations could also lead to heightened scrutiny in future operations, damaging the casino’s reputation and undermining its ability to operate within the highly regulated gaming industry. This underscores the importance of timely and decisive action in response to compliance concerns to mitigate the risk of severe regulatory penalties.

Conclusion: Lessons Learned and the Path Forward

The NGCB complaint provides several important lessons for the casino industry.

First and foremost, it highlights the dangers of failing to adequately verify the source of funds, especially when dealing with high-value patrons. Casinos must ensure that their due diligence processes are thorough and consistently applied, with no exceptions made for high-rollers or other valuable clients.

The case also underscores the importance of a strong compliance culture, where all staff members – including casino hosts – understand their responsibilities and are held accountable for their actions. Compliance committees must be empowered to act decisively when potential violations are identified, and all meetings should be documented accurately to ensure transparency.

Finally, robust transaction monitoring and ongoing patron due diligence are non-negotiable components of an effective BSA/AML compliance program. Casinos must invest in the necessary technology and training to ensure that these processes are not only in place but are also actively contributing to the detection and prevention of illegal activities. By learning from the mistakes made in the NGCB complaint, casinos can strengthen their compliance programs and protect themselves from the significant risks associated with AML violations.

The key takeaway is clear: compliance is not just a regulatory requirement; it is a critical component of a casino's overall strategy to operate safely, legally, and profitably.

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ABOUT THE AUTHOR

Derek Ramm, Global Head of Advisory Services

Derek has extensive experience in the compliance and financial intelligence fields, and has brought his expertise to both the public and private sectors, providing him with a unique and well-rounded perspective to business challenges. Prior to joining Kinectify, Derek served as the Director of Anti-Money Laundering at the Alcohol and Gaming Commission of Ontario, where he led the agency's AML regulatory oversight initiatives in the gaming, horse racing, liquor and cannabis industries. Derek was previously the Managing Principal at MT>Play, an advisory venture of McCarthy Tetrault that provided strategic advice to gaming organizations and governments around the world. He has also held senior roles at Canada's federal financial intelligence unit (FINTRAC), the Ontario Lottery and Gaming Corporation, and was the chief anti-money laundering officer at one of North America's largest independent investment management firms. He was also appointed by the Government of Bermuda to serve as a Commissioner on the Bermuda Casino Gaming Commission.

ABOUT KINECTIFY

Kinectify is an intelligence and risk management technology company serving gaming operators in the US and Canada. Kinectify's modern AML and Responsible Gaming platform empowers clients to efficiently manage risk with real-time intelligence so they can focus on growing their businesses instead of being bogged down by compliance. In addition, Kinectify's advisory services enhance gaming operators' capacity with industry experts who can design and test programs, meet compliance deadlines, and even provide outsource services for the day-to-day administration of compliance programs.

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