The installation of former MGM Resorts CEO and Chairman Jim Murren as the chairman of a newly created board designed to right the lilting ship that is Resorts World Las Vegas poses a conflict of interest that could put Murren and Resorts World at odds with other casino companies that have an eye on doing business in the United Arab Emirates.
Murren serves as chairman of the UAE’s General Commercial Gaming Regulatory Authority (GCGRA), the equivalent of the Nevada Gaming Commission. It regulates internet gambling, land-based casinos, sports betting, and the lottery.
“I think it is a pretty obvious conflict of interest,” says gaming columnist David McKee, whose Stiffs and Georges column appears in the Las Vegas Advisor. “Shareholders of MGM and Resorts World could be affected by Murren’s decision making. So could shareholders of Wynn Resorts – anybody who’s got a financial interest in getting into the Emirates has got to be paying attention to Murren sitting on the regulatory board for the Emirates and also now heading up Resorts World.”
In Nevada, “no person actively engaged or having a direct pecuniary interest in gaming activities shall be a member” of the Nevada Gaming Commission, according to state law.
“This really is not rocket science,” says Richard Schuetz, a former Nevada gaming executive and former member of the California Gambling Control Commission. “It would be like (Nevada Gaming Control Board) Chairman Kirk Hendrick being appointed as chair of a casino company in New York, and wanting to stay as chair of the NGCB, understanding that many firms in Nevada want to be in New York.”
A spokesman for Resorts World declined to comment on whether Murren intended to remain on the GCGRA or whether he considers it a potential conflict to regulate in another jurisdiction the companies he competes against in Nevada.
“It is ludicrous to believe that a person can regulate firms in one jurisdiction and compete with them in another,” Schuetz said. “In the UAE, he is the head of the regulatory agency that can make material decisions that impact Wynn, MGM, and others. As chair of Resorts World, he is competing with these entities in Vegas. That is a clear conflict.”
In October, the GCGRA, which is barely a year old, granted its first license for a land-based casino to Wynn Resorts. The Nevada-based company is already constructing Wynn Al Marjan Island Resort, located in Ras Al Khaimah, a city in the UAE.
A month earlier, MGM Resorts CEO Bill Hornbuckle announced the company had filed an application with the GCGRA for a casino in Abu Dhabi.
Murren, who has served on the GCGRA since its formation last year, said last week that K.T. Lim, chairman of Resorts World parent company Genting Berhad, reached out to him about Resorts World two months ago.
In November, while speaking in Dubai, Murren said the GCGRA is unlikely to consider MGM’s application in the near future.
“Bill used to work for me, so I’ll have to talk to Bill about that,” Murren said of MGM’s Hornbuckle, according to iGaming Business. “The process has been moving very deliberately here. The government has been very clear they want to have a state of the art, highly compliant, very rigorous regulatory regime to make sure this is going to be world class from a regulatory perspective. Nothing we are doing is going to rush that at all.”
Murren went on to say he thinks other licenses will be issued “over time, but we’re focused on the operators we have already licensed and the fact there will be a national lottery here, which we announced earlier this year as well.”
“MGM’s interest was not expected to be acted on promptly,” says McKee. “I don’t think there was any expectation in the gaming business that the UAE was going to do anything other than take a wait and see attitude on how things play out with Al Marjan. They weren’t going to leap into bed with other casino companies. But that still doesn’t remove the ethical onus on Murren not to be serving both as a regulator and as an executive for an interested party.”
Schuetz says Murren’s comments in late November about MGM while he was in discussions with Resorts World, “a clear competitor of MGM, seems very problematic to me.”
“I would be furious if I were an MGM shareholder,” Schuetz added.
MGM did not respond to requests for comment.
McKee suggests Murren is insulated to a degree by the fact that he’s chairman of Resorts World Las Vegas “and not of the whole Resorts World family of casinos. However, there’s still at least the appearance of a conflict of interest and the possibility of an actual one. If Genting has a desire to enter the UAE, then it’s in a position to influence Murren to take actions which would increase its chances.”
The GCGRA did not respond to inquiries about whether its regulators can hold positions with gaming companies.
Murren’s biography on the GCGRA website notes he is chairman of Resorts World Las Vegas LLC.
The former MGM leader joins Resorts World as it is under investigation by federal authorities for catering to illegal sports betting bookmakers and faces a complaint from state gambling regulators.
Scott Sibella, who served as a top executive of MGM properties under Murren’s watch, entered an agreement with Nevada gaming regulators last week that at least temporarily ends his career in the industry. The agreement must yet be approved by the Nevada Gaming Commission.
In January, Sibella entered a plea agreement with federal authorities for failing to file an anti-money laundering notification with the feds when illegal sports bookie Wayne Nix paid a gambling debt to MGM with $120,000 in cash.
He will pay the state a $10,000 fine for its investigatory costs.
Under Nevada law, Sibella will be eligible to apply for a gaming license after December 27, 2028, five years from the date federal authorities filed the plea agreement.
The state’s stipulated agreement addresses Sibella’s actions at MGM, but “also encompasses, and is intended to resolve any responsibility attributable to RESPONDENT for his actions or inaction in relation to any potential violation of…regulations during his employment by Resorts World Las Vegas, LLC (Resorts World).”
A complaint filed by the Gaming Control Board in August alleges Resorts World turned a blind eye as it won millions of dollars from known illegal bookies and convicted felons who lacked a confirmed source of funds.
The GCB alleged “an overall lack of control within Resorts World and acceptance among Resorts World executives of a culture where information of suspicious or illegal activity, at a minimum, is negligently disregarded, or at worst, willfully ignored for financial gain, given the overall pressure for Resorts World to generate revenue, and that the bonuses of Resorts World executives are directly tied to the financial success of Resorts World.”
Resorts World’s compliance committee, according to the complaint, rewrote meeting minutes regarding gambler Matt Bowyer’s source of income.
Bowyer is the bookie who took tens of thousands of bets from Ippei Mizuhara, the interpreter who admits to stealing more than $16 million from baseball star Shohei Ohtani to feed his gambling addiction.
Sibella, who was president at the time, says although he was on the committee, he never attended a meeting.
“I relied on my executive team to handle compliance issues,” Sibella said in August via text. “At MGM, I relied on the Corporate Compliance Committee, which I was never invited to attend.”
Sibella did not respond to a request for comment. His wife said via a private message that he intends to make a statement after the Gaming Commission’s action, which has yet to be scheduled.
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Posted on: December 16, 2024, 08:00h. Last updated on: December 16, 2024, 08:00h.
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