CG Technology recently got into big trouble with the Nevada Gaming Commission, which has the power to take away its gaming license.
CG Technology is in the race and sports book industry, which is set to explode across the country after a Supreme Court ruling granting states the power to decide whether they want to allow sports betting.
In August, the Gaming Commission had rejected the idea of a $250,000 dollar fine against CG technology for a variety of offenses.
CG Technology is now offering $1.75 million to resolve issues.
State of Nevada contributor John L. Smith joins us with his views on the settlement and other issues.
“If we go back, this is a scandal-plagued company.”
John L. Smith told KNPR’s State of Nevada.
He said the company’s first major offense was several years ago when it operated the Cantor Gaming sports book at the M Resort.
He said the violations ranged from illegal bookmaking to people trying to launder money.
“It resulted back in 2014 in a fine that was a record of $5.5 million,” Smith said, “They were very fortunate that they didn't just dismantle the sportsbook.”
He said there were signs of problems in upper management and the director of the book was corrupt.
Not long after of those problems, Smith said the company was back in trouble again.
“The second round - it was a $1.5 million settlement or fine that led to the ouster of CEO Lee Amaitis, who had essentially started the companies gambling push with Cantor Fitzgerald,” he said.
And now, the company is in another scandal.
“There were indications that gamblers from out of state were placing bets through the CG Technology’s Sportsbet app. That's not allowed by the way. You can't bet across state lines. That's a felony,” he said.
Smith said the company did report some of the problems but there were other issues that came to the surface. Right now, the company is facing a four-count complaint from the Gaming Control Board.
The Gaming Commission gave the company a strong ‘no’ to the latest settlement agreement. Smith said the commission’s reaction to the case has been unusual.
He noted that usually, the commission keeps reprimands of gaming licensees out of the public eye but not this time.
“The fact is that Gaming Commissioner Phillip Pro really took the company to task back in August,” Smith said, “He said the company lawyers were making much that they had found these mistakes and had self-reported them. He said that the fact is you're supposed to self-report. That's what people who follow the rules do.”
Another commissioner, Dr. Tony Alamo also used strong language against the company and even raised the issue of revocation of the company’s license.
“That would mean that the ball game's over entirely,” Smith said, “It's not just about losing a little money or even a few million dollars. It's about being out of business in Nevada.”
Smith sees the company’s latest money offer as a little bit of desperation. Besides the $1.75 million fine, the company also offered to put $250,000 into the state’s problem gambling council fund.
But it is not just money, it is the culture of the company that has been concerning.
“They're basically acknowledging that up and down the line they need more training and more education and more professionalism. And so, they're offering to do that as well,” he said.
Smith tends to think the Gaming Commission will accept this latest offer.
“I get the sense that this might allow the company to go forward with all eyes on its management style,” he said.
The company has also offered to no longer use its betting app, which was at the center of some of the problems. Smith notes that is a big deal for a sports betting company because it took a lot of money to develop the app and all new sports betting companies rely on that kind of technology now.
Smith said the case isn’t just about one sports betting company that has made some poor decisions. It is really about showing the rest of the country that Nevada knows how to regulate sports betting.
“Nevada likes to portray itself as the so-called gold standard when it comes to protecting and regulating the industry,” he said, “The fact is if it looked lax on this issue, which is a repeat offender, it's a real bad actor in my opinion… it would really make the state's regulatory apparatus look bad.”
Smith says the fine plus the other parts of the settlement
The death of Nevada brothel owner Dennis Hof made headlines around the world but then three weeks after his death, he made headlines again by winning a seat in the state assembly. This was Assembly District 36, which includes parts of Lincoln and Clark Counties and most of Nye County.
Now, the commissions from all three counties will decide on a replacement but the replacement must be Republican.
“There are a couple of folks from Nye County who have expressed real interest,” he said, “One of them is the is the ousted incumbent of District 36 - a hail fellow well met - named James Oscarson, who found himself on the left of Dennis Hof's politics, and essentially lost in the primary.”
But Oscarson isn’t the only person who might make it into the mix. Smith says longtime Republican and small businessman consultant Nathan Taylor might be a candidate.
He also said Nye County GOP Chairman Joe Burdzinski could be in the running.
“It's gonna be a tough act to follow. Dennis Hof was obviously a wild Nevada character,” Smith said, “With the Republicans in the minority in the Assembly, I'm not so sure how inviting the job is but clearly there's some interest.”
Rancher Ammon Bundy is back in the news. He has moved to Idaho and is traveling the West talking about what he believes is the best form of government – small government. But some people believe what he is preaching is anti-government.
He has given some interviews, including one with the Idaho Statesman.
“On one hand, in the interview, Bundy talks about his movement that he started he says really by accident that his family was just out to preserve its way of life and believes it was attacked by the government,” Smith said.
Smith quoted from the article, “I believe that we have to have government. I believe that it has to be accountable and it has to be limited and it has to be for the purpose of protecting the individual. Otherwise, there is no need for it. And actually, it becomes no more destructive than not having it in the first”
Smith says the quote makes Bundy sound “docile” but he pointed out the people that are drawn to Bundy and his message many people would consider “extremist.”
“Some fellow - not just conservatives - are folks who are about less federal government control but also members of the militia,” Smith said.
He said he draws an interesting group of people who are part of ranching communities in the West who have had a lot of contact with the Bureau of Land Management, which manages the large tracts of public land throughout the West.
The Bundys became household names in the West after the standoff at their ranch in Southern Nevada in 2014. They gained even more attention after the takeover of the Malheur National Wildlife Refuge in Oregon in 2016. Those are the most publicized events but Smith said there have been other smaller attempts by Bundy supporters to overrule federal laws.
“The challenge for Bundy is that federal law continues to disagree with his interpretation of the Constitution,” Smith said, “He believes that the federal government should have no control over that land that it should belong to the state and it should be under local control. And of course, courts disagree with him.”
John L. Smith, contributor
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