The Nevada Gaming Control Board filed a 6-count complaint against CG Technology, one of the Las Vegas's largest sportsbook operators. The complaint alleges the bookmaking business committed several violations, including underpaying winners and accepting bets after a match had started.
The Gaming Control Board's complaints include the charge that CG Technology withheld information to gaming regulators. Those charges are more astounding, because the Control Board gave CG Technology a record $5.5 million fine and a warning to avoid malfeasance just 2 years ago. Given the operator's recent history of non-compliance and its alleged deception towards the same regulators who are going to mete their judgment, it can be expected that CG Technology is going to receive severe penalties, if found guilty of wrongdoing.
CG Technology is a major Nevada sports betting operator, with 7 different sportsbooks throughout the state. The company owns 3 sportsbooks on the Las Vegas Strip alone, including the Venetian, Tropicana, and Cosmopolitan sportsbooks.
March 2015 Complaints
The Nevada Gaming Control Board's latest investigation of CG Technology began in March 2015. A patron at the Silverton Casino in the city of Enterprise (in Las Vegas Valley) complained to the control board that he had been underpaid on a winning round-robin parlay ticket.
The patron was paid by the Silverton sportsbook when he brought it to the bursar's attention and complained, but the patron reported it to the Control Board. He claimed it was the fifth time the same operator had tried to short him on a winning ticket.
Gaming Control Board's Investigation
The Control Board, having fined CG Technology over five million dollars only a few months prior, decided to look into the case. Control Board agents who investigated the complaint found a pattern of underpaying going all the way back to 2011.
Investigators mentioned that computer glitches occur from time to time, causing mistakes in the payouts. Those are understandable, but the agents said CG Technology has a "recurring and company-wide error" which can be traced back to the "Cantor Sports Book" computerized bookmaking system, which was installed in August 2011. What is most worrisome to investigators is the seeming willful decision (or indecision) to allow the errors to continue to occur, instead of fixing the Cantor software.
$800,000 in Unpaid Winnings
Instead of fixing the system, CG Technology expanded the use of the Cantor Sports Book software in 2014. This resulted in 20,000 underpaid winning tickets, which amounted to $700,000 in unpaid winnings.
It also resulted in 11,000 underpayments resulting in $100,000 of unpaid winnings, presumably in the years 2011-2014, when the software was used on a more limited basis. Altogether, it represents over $800,000 kept by the sportsbook.
Unpaid Taxes to Nevada
The total actually is higher than $800k, because the discrepancy meant that the sportsbook was keeping money that was not on the book. Thus, CG Technology shorted the state government on taxes for its gaming revenues.
In its complaint, the Gaming Control Board wrote that the company appeared willing to allow the discrepencies to continue to happen, despite many complaints about underpaid tickets. The GCB's filing said, "Only after the (regulators) initiated its investigation did (the company) take steps to identify all parlay wagers and patrons affected."
Halfhearted Compliance
Even then, compliance was done reluctantly -- and perhaps illegally. Control Board agents complained that the company and its executives did not fully comply with their audits, which may be illegal under Nevada state law. That is one of the six complaints against CG Technology, as the filing said that lack of cooperation "constitutes a failure to comply with...all federal, state and local laws and regulations."
CG Technology also appears to have broken basic laws of gambling, such as its decision to still take bets after sporting events began. In May 2015, the company took bets on a boxing match after it began (possibly the Mayweather-Pacquiao fight, with the most betting in boxing history). In January 2016, the operator did the same for an important mixed martial arts card.
Casino Operators Not Under Investigation
It should be noted that the casinos associated with CG Technology are not under investigation and do not face legal jeopardy. Kimiko Peterson, a spokesman for Silverton Casino, made that clear in a statement. Citing that Silverton Casino and CG Technology have a revenue sharing deal which allows CGT to manage Silverton's sportsbook, Peterson said, "This is between CG Technologies and the Nevada Gaming Control Board."
That means the Las Vegas Sands Corporation does not face legal jeopardy, despite the fact CG Technology runs LVS's Venetian Sportsbook. The point of a revenue sharing plan is to allow a professional bookmaker service to handle day-to-day operations, on the assumption they run a fair and efficient game.
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