Comps, credits, golf trips: Illegal bookie received perks from MGM Grand, Sibella

Over the course of three years, MGM Grand took in more than $4 million in cash from an illegal bookmaking operation that federal officials say its former president allowed to operate freely within the casino.

The hotel-casino also went so far as to offer free golf trips with other high rollers to now-convicted illegal bookmaker Wayne Nix and other complimentary benefits such as comping his room and extending him gambling credit to encourage him to spend his money at the MGM Grand, according to federal documents unsealed Thursday as part of the criminal investigation into former MGM Grand President Scott Sibella. These high roller events were called “Undercover Weekends” — a reference to Sibella’s appearance on the reality television show “Undercover Boss.”

For his part, Sibella, 61, pleaded guilty in U.S. District Court in Los Angeles on Wednesday to failing to file reports of suspicious transactions required to be made by casinos to federal officials. In a 17-page plea agreement, Sibella admitted to knowing Nix ran an illegal bookmaking business, but still allowed him to gamble.

Sibella is scheduled to be sentenced May 8 and faces up to five years in prison and a fine of $250,000.

In a deal with the Justice Department, MGM Grand and The Cosmopolitan of Las Vegas were ordered to pay a combined $7.45 million fine as part of a money-laundering settlement for violations of the Bank Secrecy Act.

According to court documents, Sibella admitted to law enforcement in 2022 that he believed Nix was involved in illegal sports bookmaking, but “didn’t want to know because of my position. … If we know, we can’t allow them to gamble. … I didn’t ask, I didn’t want to know, I guess, because he wasn’t doing anything to cheat the casino.”

Nonprosecution agreements

Under nonprosecution agreements with the Justice Department, MGM Grand will pay a monetary fine of $6.5 million, and forfeit $500,000 in proceeds traceable to the violation, which will be counted toward the fine. The Cosmopolitan agreed to pay a monetary fine of $928,600, and to forfeit $500,000 in proceeds traceable to the violation, which also will be counted toward the fine.

At the time of the incident, MGM Grand was owned by MGM Resorts International and The Cosmopolitan by Blackstone Group. MGM acquired The Cosmopolitan for $1.625 billion in 2022.

In their respective agreements, MGM Grand and The Cosmopolitan each accepted responsibility for laundering Nix’s illicit funds and failing to properly file suspicious activity reports on Nix, who conducted numerous transactions involving millions of dollars at the casinos between 2017 and 2020. MGM Grand also accepted responsibility for failures by the casinos’ compliance department to use all available information when performing “know your customer” reviews of Nix.

Under the Bank Secrecy Act, casinos like MGM Grand and The Cosmopolitan are required to implement and maintain programs designed to prevent criminals from using casinos to launder the large sums of cash that illegal activity can generate. For example, the law requires casinos to file reports documenting suspicious activity, such as instances where a client’s source of funds cannot be determined or are suspected to be related to crime.

As part of its NPA, MGM Grand admitted that Sibella and two casino hosts knew about Nix’s illegal gambling business, allowed Nix to continue to gamble with MGM Grand and affiliate properties, allowed Nix to present and use illicit proceeds at the casino properties, and provided Nix complementary benefits to encourage him to spend his illicit proceeds at the casino.

High roller golf trips

MGM Grand also admitted that Nix at times used golf trips with MGM Grand’s high-net-worth customers to solicit new customers for his illegal gambling business. By 2020, MGM Grand had accepted more than $4 million in cash that were illicit proceeds from Nix’s illegal gambling business, the Justice Department said.

MGM Grand also admitted that its anti-money laundering compliance program failed to instruct its compliance team to use all available information, as required by the Bank Secrecy Act, when performing reviews to determine whether to file suspicious activity reports, or to identify and verify customer information, including source of funds, for transactions found to be suspicious.

Compliance personnel did not regularly reach out to the marketing hosts, even where the compliance team could not substantiate or identify the customer’s source of funds, despite the fact that other departments would routinely reach out to hosts in connection with the collection of funds owed to the casino, the Justice Department said. Because of the deficiencies in the compliance program, MGM Grand failed to detect and report the extent of Nix’s suspicious activities and failed to prevent Nix’s money laundering.

“Mr. Sibella’s willful violation of Bank Secrecy Act obligations to report suspicious activities put the credibility of the MGM Grand at risk,” said Tyler Hatcher, special agent-in-charge for the Los Angeles Field Office of Internal Revenue Service criminal investigation.

“The Bank Secrecy Act mandates reporting of suspicious activities to protect financial institutions from becoming participants in money-laundering activities often benefitting criminal or terrorist organizations,” he said.

Trust undermined

“While president of MGM Grand, Mr. Sibella undermined the trust and confidence of his employees, customers and regulating agencies, and for that he will be held accountable,” Hatcher said. “Additionally, the non-prosecution agreements with MGM Grand Hotel, LLC and The Cosmopolitan of Las Vegas should serve as notice to other casinos and financial institutions that evading Bank Secrecy Act obligations can carry severe consequences, and we will investigate suspected non-compliance.”

Sibella first joined MGM in 2010 to run The Mirage before he moved over to MGM Grand. He left MGM as part of that company’s cost-reduction buyout strategy to become the top executive of Resorts World Las Vegas in April 2019, well before the $4 billion, 3,000-room resort opened in June 2020. Sibella was fired from Resorts World in September 2023.

The Nevada Gaming Control Board issued a statement Thursday saying it was aware of the court actions involving Sibella in California.

“The NGCB has been monitoring the situation, and will ensure that all individuals and entities involved in Nevada’s gaming industry are held to the highest standards,” Control Board Chairman Kirk Hendrick said in an emailed statement.

It’s unclear if Sibella would continue to be licensed in the state in the future as Sibella suggested in a statement he made Wednesday.

Gaming license applicants face tough regulatory scrutiny when they apply for licensing, but aren’t automatically disqualified by convictions or guilty pleas.

Nix, the illegal bookmaker, pleaded guilty in April 2022 to one count of conspiracy to operate an illegal gambling business and one count of filing a false tax return. He is scheduled to be sentenced March 6.

Contact Richard N. Velotta at rvelotta@reviewjournal.com or 702-477-3893. Follow @RickVelotta on X.