CG Technology Receives $2 Million Fine from Nevada Gaming CommissionNovember 22, 2018 9:10 am
Last Thursday, the Nevada Gaming Commission (NGC) accepted a $2 million settlement by Las Vegas sportsbook operator CG Technology related to serious compliance failures and miscalculating customer payouts. CG Technology has a long history of rule violations in Las Vegas and had been concerned that the Nevada Gaming Commission might move to revoke its license.
Who is CG Technology?
CG Technology operates eight sports books for major casinos based in the greater Las Vegas area. This includes the likes of The Hard Rock, The Tropicana, The Venetian, The Cosmopolitan, The Palms, M Resort Spa Casino, The Palazzo, and the Silverton Casino Hotel.
Over the past five years, however, the company has fallen foul of the state’s gambling regulator on three occasions. These serious compliance failures have subsequently resulted in CG Technology paying three out of the state’s top ten biggest fines ever levied on a Nevada-based gaming company. This includes a number-one spot on the list after forking out a massive $5.5 million in 2014 to settle a litany of charges involving illegal gambling and money laundering.
As part of the same case, CG Technology also had to may a whopping $22.5 million to the U.S. government, including $16.5 million to the U.S. attorney offices in Eastern District of New York and Nevada, and a further $6 million to the U.S. Treasury Department’s Financial Crimes Enforcement Network.
The latest case saw CG Technology accused of a whole catalog of violations and errors. This list of infringements included accepting wagers from outside the state via its mobile sports betting app, accepting wagers after events had finished, and making incorrect payouts to 1,483 bettors. The firm also misconfigured a satellite sports betting station for a 2018 Super Bowl party taking place at an unnamed Las Vegas casino.
NGCB’s $250k Settlement Proposal Rejected
The Nevada Gaming Control Board (NGCB) had initially proposed that a $250,000 penalty be imposed on CG Technology. While the NGCB acknowledged that CG Technology had self-reported the incidents, the Nevada Gaming Commission (NGC), on the other hand was less forgiving. In August, the NGC then broke with a decade of protocol by refusing the $250,000 recommendation, with its board members vocal in their condemnation of the company. As NGC Chairman Tony Alamo stated at the hearing:
“I have zero appetite to move forward with this settlement with CG Technology. My comfort level with CG Technology is zero. The country is watching. Frankly, we are the gold standard. Our licensees go out and do the job in every state. They have to be perfect.”
The NGC subsequently instructed CG Technology to come up with a more acceptable settlement figure. The NGC further indicated that the company’s license was now on the line, and that in order to continue operating in the state it also needed to abandon its sports betting technology and form a partnership with a third-party provider by February 2019. The firm has also agreed to employ a corporate social responsibility officer, who will report directly to the CEO.
CGT has since come up with a settlement figure of $2 million, including paying the NGC $1.75 million, and making an additional $250,000 contribution to the Nevada Council on Problem Gambling. Fortunately for CG Technology, the new settlement amount seems to have hit the mark and been deemed more appropriate by the regulator. Following the regulators decision, CG Technology’s CEO Parikshat Khanna, stated:
“We are satisfied with the resolution agreed to today by the commission. We remain committed to the Nevada sports book business and the long-term partnerships we have established with some of the finest resort operators in the world. Additionally, we look forward to the growth prospects of the industry nationwide.”