NY Regulator Monitoring Resorts World, Wynn Legal Situations

Posted on: September 27, 2024, 04:04h. 

Last updated on: September 27, 2024, 04:04h.

Todd Shriber @etfgodfather Read More
Expertise: Financial, Gaming Business, Mergers and Acquisitions.

Resorts World Las Vegas and Wynn Las Vegas recently dealt with legal issues in the US gaming hub and that’s not lost on regulators in New York where the operators of those venues are vying for downstate casino licenses.

Resorts World Las Vegas
Resorts World Las Vegas. Legal issues there and at Wynn Las Vegas are being monitored by New York regulators. (Image: Jeff Scheid/Nevada Independent)

At a meeting earlier this week, New York State Gaming Commission (NYSGC) Chair Brian O’Dwyer said he’s monitoring the legal situations Resorts World and Wynn are facing in Las Vegas, hinting that those issues could affect the operators’ bids for permits in the Empire State.

We will review all relevant data as to whether a potential licensee possesses the qualifications to hold a casino license. And we will thoroughly review all relevant material — including, of course, the allegations lodged against Wynn and Resorts World,” said O’Dwyer at the meeting.

He stressed that final say on the winners of three coveted New York City-area casino licenses rests with the NYSGC, not the New York State Gaming Facility Location Board (NYSGFLB). Genting, the parent of Resorts World, is seeking to convert its Resorts World New York slots-only venue in Queens into a traditional casino. Wynn is partnering with Related Cos. to bring an integrated resort to the West Side of Manhattan.

Sources of Resorts World, Wynn Legal Woes

Resorts World’s Nevada legal issues stem from a scandal involving former executive Scott Sibella who allegedly allowed black market bookmakers to wager at the Strip casino. It is believed some of those wagers were placed with dirty money. Genting let Sibella go for alleged violations of company policy in September 2023.

In January, he pleaded guilty to violating the federal Bank Secrecy Act and in May, a federal judge levied a $9,500 fine and a $100 special assessment against him. Prior to joining Resorts World Las Vegas in 2019, he was president of MGM Grand Las Vegas and there has been chatter that his ties to that gaming company could affect Empire City Casino’s quest for a New York City gaming license, but O’Dwyer didn’t mention MGM at the NYSGC meeting.

As for Wynn, the company’s namesake Las Vegas property recently agreed to pay $130.13 million to the Department of Justice (DOJ) to settle allegations of anti-money laundering violations at the venue. That is the biggest fine ever against a US-based casino company “based on admissions of criminal wrongdoing,” according to DOJ.

Last week it was revealed that Wynn and some former executives agreed to pay $70 million to investors to settle claims of securities fraud. Plaintiffs in class action suit against the gaming company alleged certain high-ranking executives knowingly obfuscated founder Steve Wynn’s purported sexual misconduct for years and when it finally became public, the stock suffered as a result. However, that case wasn’t mentioned by O’Dwyer.

Not First Time Resorts World Has Been Mentioned

This isn’t the first time potential vulnerabilities regarding Resorts World New York’s quest for a downstate license have been mentioned. In a report out last month, CIMB Securities discussed the legal situation in Las Vegas, noting it could be problematic in New York.

“These allegations are serious. But I must emphasize that in one instance, the complaint is still pending. And in the other (Wynn), the US Department of Justice settled the matter without filing criminal charges,” said O’Dwyer at the NYSGC meeting. “Nevertheless, it is the responsibility of this commission to assure that our licenses exhibit the utmost integrity and have established robust procedures with their employees to assure strict compliance with our laws and regulations.”

Resorts World New York does have some favorable in its corner. It’s been operational in Queens for 13 years, has delivered more than $4 billion in taxes to the state in that time, it’s one of the highest-grossing regional casinos in the country, and Genting is promising a significant, jobs-creating expansion if it wins one of the three downstate casino licenses.