The New York casino race is heating up as Wynn Resorts has taken its hat out of the ring. After being fined $5.5 million for neglecting anti-money laundering measures, the entertainment giant is leaving the race to build a casino in the Big Apple.
This is unfortunate for the company, as now is a better time than ever to expand a gambling operation. The rise of online gambling means that more consumers are seeking sites even outside of their immediate area to get their needs met. As Ricky Davies explains, many casino users have found that their favorite global poker destinations are outside of the immediate environment but meet their needs nonetheless.
Wynn Resorts was in the running to develop a physical casino in New York City, but has run into some trouble. It started last year when the company agreed to forfeit $130 million to the U.S. Department of Justice (DOJ) as part of a non-prosecution agreement. Now, it has agreed to pay a $5.5 million fine to the Nevada Gaming Control Board (NGCB) as a penalty for some anti-money laundering violations.
The money laundering charge came after employees at the casino were found to have allowed foreign nationals to gamble at its casino using proxies. These individuals were looking to avoid anti-money laundering measures and so would pay the casino workers to allow other people to gamble on their behalf. The investigation found that there was a complex network of bank accounts and foreign transfers to obscure this activity, but it was eventually discovered.
Wynn Resorts, on its part, says that it has fired the employees involved in the scheme and is happy to have resolved the issue with the NGCB. Another fine of $20 million is being paid to the NGCB due to sexual misconduct allegations against its founder, Steve Wynn. The company was found not to have properly investigated the allegations made by his victims.
Needless to say, the last year has been an expensive one for the company, and this is due to various fines. In light of this, the company has decided not to proceed with its bid to launch a land-based casino in New York City. In its official announcement, the company said that it anticipated further challenges in building the New York casino and that its resources would be better used elsewhere.
“The recent rezoning process has made it clear to us that there are uses for our capital more accretive to our shareholders, such as investment in our existing and upcoming developments and stock buy backs, than investing in an area in which we, or any casino operator, will face years of persistent opposition despite our willingness to employee 5,000 New Yorkers,” it said.
Now that Wynn Resorts is out of the running, the next few months will see more players emerge to the forefront of this New York casino race, and hopefully, one will come out on top.
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