Nevada sportsbook operator CG Technology has been fined for the third time in five years by state gaming authorities and has agreed to remove all its technology and equipment from the casinos where the company operates.
In a stipulated settlement that awaits approval from the Nevada Gaming Commission on Aug. 23 in Las Vegas, CG Technology agreed to transition within six months “to an unaffiliated third party’s sports pool wagering system.” All components that make up CG’s Cantor Sport Book have been “deemed permanently disapproved… and will not be considered for future approval” by gaming regulators.
CG will be allowed to continue to operate the sportsbooks at seven Las Vegas Strip and Las Vegas area casinos – Venetian, Tropicana, Cosmopolitan of Las Vegas, M Resort, Palms, Hard Rock and Silverton – but will have use equipment provided by another manufacturer.
The stipulated settlement was signed by control board members and CG Technology CEO Parikshat Khanna. Both the complaint and stipulated settlement were posted the agency’s website.
CG agreed to pay a fine of $250,000 – far less than the $5.5 million fine the company paid in 2014 and the $1.5 million fine in 2016, which led to the ouster of former CEO Lee Amaitis.
The Control Board acknowledge the company’s “disciplinary history” and was “cognizant” of the fine as being “significantly less” due to several to several “favorable mitigating factors,” including the company self-reporting the events that led to the complaint and agreeing to permanently discontinue and replace its wagering system technology.
“The appears to be a sincere effort to comply with the Gaming Control Act and regulations of the commission,” according to the settlement.
In the four-count complaint, CG was accused between 2016 and 2017 of accepting multiple wagers on the company’s mobile betting application placed by customers outside Nevada – including from Maryland, Texas, Arizona and California; accepting bets on games and events that had already concluded, miscalculating payouts on single game and round robin parlay wagers, and incorrectly setting up a satellite sports betting station at an undisclosed casino’s Super Bowl party.
CG Technology officials declined comment.
CG Technology is the sports betting affiliate branch of financial firm Cantor Fitzgerald. The 2014 and 2016 fines by Nevada stemmed from a multipronged investigation that began in January 2013 and included U.S. attorneys in New York and Nevada, the U.S. Postal Service, the Internal Revenue Service and the New York City Police Department.
The investigation came after a former CG executive embroiled the company in an illegal gambling and money laundering scheme.
CG Technology agreed to pay $22.5 million fine to the U.S. government for its role in the illegal operation that included “lay-off wagers” made at Nevada sportsbooks. After removing Amaitis, the company attempted to rebrand itself, changing its name from Cantor Gaming to CG Technology.
The newest fines from Nevada come as sports betting is expanding across the U.S. following the Supreme Court’s favorable ruling that allows states to legalize single-game wagering. New Jersey, Delaware and Mississippi have launched sportsbooks inside the states’ casinos and racetracks.
Last week, Penn National Gaming was licensed by West Virginia for a sportsbook at the company’s racetrack casino in Charlestown. Legal Sports Report said Penn had an agreement with William Hill US to operate the sports wagering site.
Penn owns two of the Nevada casinos – Tropicana and M Resort – where the sportsbooks are operated by CG Technology.
Howard Stutz is the executive editor of CDC Gaming Reports. He can be reached at hstutz@cdcgamingreports.com. Follow @howardstutz on Twitter.
