Schuetz: The Nevada Regulatory Discussion, Part Deux — Good, Bad, And Ugly

“Who will guard the guards themselves?”

— Juvenal

In my last Casino Reports column, entitled “These Nevada Gaming Commission Meetings Are Getting Embarrassing,” I expressed that it would be the first of several articles addressing the Nevada Gaming Commission meeting held on April 24. Indeed, that series now continues.

Last week’s article primarily focused on my belief that the commission demonstrated a bad dose of industry capture, as we say in economics, in addressing a complaint against MGM for violation of anti-money-laundering practices. This control board complaint being addressed by the commission was the ugly stepson of an earlier non-prosecutorial agreement between MGM and the U.S. Department of Justice.

My second observation made in the article was about the duality between the MGM hallucination that it had a quality compliance program in the face of substantial evidence that the casino was in its own world regarding some noteworthy players who played big. And they played big on their terms for a number of years.

I will continue to discuss that meeting, but with a detour first for some good regulatory news coming out of Nevada.

In April 2024, it was announced that Mike Dreitzer would become chairman of the Nevada Gaming Control Board. A new chairman is not a rare announcement in Nevada because it has been announced frequently since early 2018. The average tenure for this position barely exceeds one year.

That, in and of itself, should be an embarrassment to Nevada and the gaming industry, for there is hardly time for chairpersons to get comfortable in their office before they are packing their bags. That is a funny approach for the state’s largest and most important industry. It is almost like they don’t take it seriously.

Ominously, this appointment is only for approximately another 18 months. Dreitzer is inheriting the term of the prior chair, who seems to have lost his appetite for the job.

What is good about the new chair is that he is an experienced hand. He understands regulation because he has been regulated for many years. The best way to learn about regulation is to be regulated. He understands technology.  He is a man of character, honesty, and integrity. He has been on the licensing scene enough to understand the right and wrong about that.

As long as he remembers all those things and stays for a while, he should author a great new chapter in Nevada’s gaming regulatory history. 

The concern about Dreitzer is that he is not a table games person, and much of the real mischief over the last decade or so has occurred in high-end tables. My guess is that he will be working to source some top table game folks who can recognize what is happening in high-end table game environments.

With the events of late involving the MGM as well as Resorts World Las Vegas, he will understand not to rely on the compliance departments to provide insight, but he will need some boots on the ground. The last thing Nevada needs is another big table games embarrassment. He should know where to look to get some assistance and, hopefully in cutting his deal with the governor, was promised some help.  

I am also sure he has many fans cheering him on. I believe he is the absolute right person to tackle this beast.

Back to the matter at hand …

But let’s go back to the commission meeting last month. 

I have found that Occam’s Razor — that the simplest explanation is most often correct — is a wonderful heuristic for attempting to understand the world.

Using Occam’s Razor to address the MGM situation, my conclusion is that MGM allowed its casino to ignore many laws and regulations governing cash transactions and unsuitable clientele because it made the casino a ton of money. That is pretty simple, and one never wants to question the profit motive in driving behavior.

MGM also had to believe that the risk factor was low for the Nevada Gaming Control Board (NGCB) to get wind of something amiss. The state’s head regulators, during their short stays in the office, had become engrossed in leading the cheer that they are the “gold standard” of regulation, and the Nevada politicians echoed it along with them.

Unfortunately, it was no longer true. They were better at talking the talk than walking the walk, and the industry seems to have understood that. They felt safe stretching or breaking the rules — if the money was right.

It is amazing to see what the NGCB has missed since 2018, which resulted in the biggest fines in the history of Nevada gaming. He is a list, ranked by amount:

• Wynn Resorts, 2019, $20 million, failure to appropriately address sexual harassment allegations against Steve Wynn. This issue surfaced not because of the NGCB but rather through an article by The Wall Street Journal and from other news reports.

• Resorts World Las Vegas, 2024, $10.5 million, AML & KYC violations. This story was broken by Dana Gentry of the Nevada Current and addressed federal law enforcement agents investigating inappropriate conduct in Las Vegas, focusing on Resorts World President Scott Sibella. Shortly thereafter, Resorts dismissed Sibella. The NGCB caught up a year later with a complaint.

• Steve Wynn, $10 million, 2023, “repeatedly violated Nevada’s gaming statutes and regulations … ” Again, this situation was brought to the world’s attention not by the Nevada regulators but by The Wall Street Journal.

• MGM Resorts, $8.5 million, 2025, AML & KYC violations. Again, the Nevada regulators were Johnny-come-latelies to this party, with the feds bringing the initial heat.

• Wynn Las Vegas, 2024. While no fine has been assessed by the state, this involved a $130 million forfeiture to the U.S. Attorney to settle criminal allegations against the company for illegally conspiring with unlicensed money transmitting businesses. The Nevada regulators have not yet addressed this matter, nor have they given any indication they intend to.

Right under their noses

Nevada regulators have been MIA regarding misbehavior in Las Vegas casinos, mainly regarding higher-end table games play.

The mischievous behavior was not even cleverly hidden. Illegal bookie Matt Bowyer brought millions of dollars to Las Vegas, visiting two to three days a week, with bankrolls ranging from $250,000 to $1 million. He also visited the MGM Grand and its subsidiaries more than 400 times. When his home was raided, currency-counting machines were seized.

Wayne Nix, another illegal bookie, visited more than 300 times. Moreover, he was often lavishly entertained, and he brought many friends and associates. These shows would be hard to miss. And this happened year after year after year.

Moreover, at the December 2024 Nevada Gaming Commission meeting, Sibella spoke to the commission about his tenure at MGM, saying, “I never attended a compliance meeting or had any input with a compliance committee whatsoever.” He also stated that “MGM Resorts, at the corporate level, performed all compliance functions” while he was president.

Sibella suggested that many knew and facilitated Nix’s behaviors, yet he stood alone on the gallows. As sympathetic and accurate as that notion may be, he does have to understand that his title was president. I do, however, agree with Sibella that the body count is ridiculously low, and that he was particularly expendable.

Also, Sibella noted that Nix gambled on credit. So MGM not only suffered a material failure in the compliance department but also in the credit department as the appropriate checks to secure credit could not have been made. The system was broken in multiple places.

Which takes us back to my friend Friar Occam, who conceived Occam’s Razor.

Nix, Bowyers, and their compatriots had their way with the MGM (and others), which was cool since it was profitable. It was a safe play because, well, since 2018, the leadership of the NGCB has been basically temporary employees. This all worked just dandy, for they rode the momentum of a “gold standard” reputation.

The problem surfaced when federal authorities and some talented reporters no longer bought the bunk and spoke the truth. It touched — and may continue to touch — the largest operators in town. It also damaged the brand of the Nevada regulatory assets — and, by extension, the Nevada industry.

In economics, this is called regulatory failure. In short, they focused on the noise and not the signal. Let’s all hope that Dreitzer can grab this misbehaving beast and return it to the path it once knew. 

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Richard Schuetz entered the gaming industry working nights as a blackjack and dice dealer while attending college and has since served in many capacities within the industry, including operations, finance, and marketing. He has held senior executive positions up to and including CEO in jurisdictions across the United States, including the gaming markets of Las Vegas, Atlantic City, Reno/Tahoe, Laughlin, Minnesota, Mississippi, and Louisiana. In addition, he has consulted and taught around the globe and served as a member of the California Gambling Control Commission and executive director of the Bermuda Casino Gaming Commission. He also publishes extensively on gaming, gaming regulation, diversity, and gaming history. Schuetz is the CEO of American Bettors’ Voice, a non-profit organization dedicated to giving sports bettors a seat at the table.