Southern Nevada sportsbook operator CG Technology (CGT) is expected to continue normal operations despite being hit with a third significant fine in five years from the Nevada Gaming Control Board (NGCB).
In a stipulated settlement awaiting approval by the Nevada Gaming Commission (NGC) on Aug. 23, all components that make up CGT’s Cantor Sportsbook have been “deemed permanently disapproved… and will not be considered for future approval.” CG Technology thus must transition within six months “to an unaffiliated third party’s sports pool wagering system.”
CGT currently operates sportsbooks in Las Vegas at The Venetian, Palazzo, Cosmopolitan, Palms, Hard Rock, Tropicana, Silverton, and M Resort. CG also accepts wagers through its mobile app anywhere in Nevada.
A stipulated settlement is the result of a negotiation between the licensee and the NGCB in which regulators present evidence of violation(s) and negotiate a fine and remediation with specific terms and conditions that are accepted by both parties. The NGCB then presents the agreement to the full Nevada Gaming Commission. The settlement avoids a public hearing on the violation(s).
CGT’s latest penalty for $250,000 covers three illegal actions: accepting out-of-state wagers, taking bets on games after the games were complete, and underpaying and overpaying bettors.
The settlement additionally requires CG to “maintain and implement” new internal controls and quarterly employee training, both monitored by regulators to prevent future violations.
Third Strike for CG Technology?
As a division of Cantor Fitzgerald, a major, worldwide financial services firm, CGT self-reported the most recent violations to regulators, helping to lighten its punishment.
CGT admitted that, between 2016 and 2017, it accepted multiple wagers on the company’s mobile betting application placed by customers outside Nevada — at locations in Maryland, Texas, Arizona, and California. Other self-reported offenses included taking wagers on games that were already complete, miscalculating payouts on single game and round robin parlay wagers (resulting in some players getting overpaid, and others short-changed), and improperly setting up a satellite sports betting station at an undisclosed casino’s Super Bowl party.
The company has not commented the settlement agreement.
CGT was fined $1.5 million for incorrectly paying wagers in July 2016 and their CEO, Lee Amaitis, resigned as a part of a settlement with the Nevada Gaming Control Board.
The company had been previously fined $5.5 million in Nevada for involvement in an illegal gambling and money laundering case. Additional fines in excess of $22 million were paid to the United States government and New York.
In 2013, New York authorities dropped illegal sports betting charges against the company’s former VP of risk management who was among 25 individuals charged following the investigation of illegal sports betting associated with a Curaçao-based online sportsbook.
Serving Sports Bettors Across America
Industry observers had speculated that CGT had the inside track to run the sportsbook at The Meadowlands racetrack in New Jersey, after the U.S. Supreme Court, in May, overturned PAPSA, the federal law that prevented Nevada-style sports betting in other states. However, the FanDuel Group succeeded in reaching agreement with that venue, near New York City.
CGT has not announced any sports betting deals in the U.S. since the Supreme Court ruling.
The company’s business model in Nevada is to extensively remodel existing casino sports books, often at the cost of millions of dollars, and then lease the facility from the casino owner on a long-term basis in exchange for the ability to run the casino’s sports wagering operations. CGT books at The M, Venetian, Palms and Hard Rock are regarded as among the most opulent in Las Vegas.
Rumor has persisted the CGT operation has been up for sale, but there has been no word of any interested buyer making an offer.