The Gaming Commission does not like to strip gaming licenses, but it has done so in the past.
The Nevada Gaming Commission rejected a proposed fine for CG Technology, a trouble sportsbook operator which moves one step closer to losing it gaming license. CG Technology offered to pay a $250,000 fine for its repeated violations of Nevada gaming law, but the NGC rejected the fine as too low.
During it public hearing before the Nevada Gaming Commission, CG Technology executives came under fire by the commissoner member. The repetition of regulatory violations angered the officials, because CG Technology paid fines of $5.5 million in 2014 and $1.5 million in 2016 to settle previous violations.
Given the repeated fines, offering to pay a fraction of the previous penalties angered the NGC commissioners further. The original 2015 was the largest in the history of Las Vegas’s gambling industry.
The 2015 fine came after it was learned that a CG Technology official ran an illegal online sportsbook on the side. The executive used the company’s online gaming infrastructure to circumvent Nevada gaming law and avoid sports betting taxes.
Fines for Unpaid Winnings
The second fine a year later was levied because CG Technology did not pay out legitimate winnings to the tune of $700,000. To punish the company for it stinginess, the NGC fined it $1.5 million.
The $1.5 million fine for the second offense may have given CG Technology officials the impression they would pay a lower fine yet again in 2018. Penalties usually increase with additional offenses.
“Zero Appetite” for Recommended Fine
The Nevada Gaming Control Board (NGCB) agreed to the $250,000 fine earlier this month after an investigation proved numerous violations. That left the decision to the Gaming Commission, but NGC commission members were in no conciliatory mood.
Gaming Commission Chairman Tony Alamo said, “I have zero appetite to move forward on this agreement.”
Took Out-of-State Mobile Wagers, Underpaid Bettors
The type of violations infuriated the commissioners. CG Technology both underpaid and overpaid customers. Given the fact that the company paid a 7-figure fine only two years ago for failing to pay winners, one would think executives would have taken special precautions to avoid similar violations moving forward.
Even stranger, the company also accepted bets after events had occurred. Taking bets after a game has started — or worse, after it has ended — is a grave ethical violation.
CG Technology also violated federal laws on interstate wagers. In the agreement with the NGCB earlier this month, CG Technology acknolwedged that it had accepted out-of-state mobile wagers. That is a possible violation of federal laws and plays into the hands of those who would want to ban online and mobile gambling in 50 states.
Interstate Mobile Gambling a PR Problem
When US Congressmen like former Rep. Jason Chaffetz (R-Utah) and Sen. Lindsay Graham (R-South Carolina) championed Restore America’s Wire Act (RAWA) in Congress, they argued that online betting in New Jersey or Nevada affected states like Utah or South Carolina, because gamblers in those states would be able to wager over their smartphones in out-of-state sportsbooks.
Due to geo-location technology on online and mobile gaming sites, illegal interstate gambling is easy to stop. Like a GPS system, the geolocation technology knows where the potential gambler resides and bans any bettors who reside outside Nevada. CG Technology did not invest in software which would police out of state gambling property, putting Nevada in a position where politicians in other states could criticize its smartphone gaming systems. When the state’s online gambling industry is one the line, even one violation is one too many.
Sports Betting in National Spotlight
The May 14 repeal of the Professional and Amateur Sports Protection Act (PASPA) by the U.S Supreme Court puts sports betting in the national spotlight. As more states legalize sportsbooks, any news which involves infractions is going to take on a higher profile.
Tony Alamo pointed out that fact to CG Technology executives, stating of the Nevada sports betting industry, “The country is watching. Sports betting has become front page and it’s a big deal. We are the gold standard.”
Deborah Fuetsch Blasts CG Technology
Commissioner Deborah Fuetsch said, “Basically, you’ve been called into the principal’s office three times, and each time, it’s maybe a little bit different but a lot of it is repeat issues.”
Feutsch added, “And you’ve been given the opportunity to make the business right, and that hasn’t happened. And because you can’t get your business in order, you are damaging the reputation of the gaming industry of the state and the integrity of the game.”
