Question of the Day - 23 January 2025

Yesterday, we saw that Scott Sibella, president of both MGM Grand and Resorts World when anti-money-laundering violations were taking place, took the fall at Resorts World. In addition, though MGM Grand and the Cosmopolitan were sanctioned by governmental agencies for the same shenanigans, Resorts World itself has so far evaded consequences.

Today we answer the question how. And note that the opinions and conclusions herein are direct from David McKee.

Resorts World has been successful in a number of ways. Late in 2024, it took the unusual step of releasing financial results (which, being privately held, it's doesn't have to and isn't inclined to do in the normal course of events). These revealed that the property was making a very poor return on investment. First, it’s one of the two most expensive casinos ever built in Nevada and second, it was coming off a very bad summer for business. 

It was an effective tactic: pleading dire poverty ahead of a probable multi-million-dollar fine. “Don’t punish us or we’ll have to go out of business,” Resorts World seemed to half-plead, half-threaten. Since Nevada regulators fear nothing so much as a casino closure, they're  wont to be cowed into going easy on Resorts World.

The other stalling tactic, also a winner, was the announcement of a dedicated Resorts World Las Vegas board of directors, answerable to Genting HQ. This could go a long way toward addressing the lack of oversight that allowed Sibella to mess up in the regulation department. 

That’s because the board is to be chaired by former MGM CEO Jim Murren and filled out with associates of his. The new president of Resorts World, Alex Dixon, is also a Murren acolyte, having held the top jobs at Circus Circus and MGM Springfield. When Resorts World found him, however, Dixon was toiling in relative obscurity in Dubuque, Iowa, hardly an auspicious launching pad. Whatever the case, he and other board members are beholden to Murren, the new power behind the Resorts World throne.

Murren’s ascendancy isn't without its own set of complications. First off, he's the top gaming regulator in the United Arab Emirates. Genting wants to be there. So does Murren’s old sinecure, MGM, which he left under cloudy circumstances. The fact that he could put a good word in for Genting over MGM with various sheiks complicates his Vegas remit. But that's the Persian Gulf’s problem, not Nevada’s. Or so the Gaming Control Board will see it, in all probability.

Also, according to Sibella and other sources, Murren and top MGM execs were cognizant of MGM playing fast and loose with money-laundering rules. The question, “What did the CEO know and when did he know it?”, is certainly relevant to Murren’s Resorts World appointment. Recent Control Board history, however, strongly suggests that it's unlikely to be asked. Chairman Kirk Hendrick and his colleagues consider such queries to be in poor taste.

So what will happen to Resorts World in the end? Probably very little. While it certainly has misbehaved enough to warrant losing its license, the Control Board would never ever go there. The specter of dire Genting poverty and the promise of new “blue-ribbon” oversight will probably enable Resorts World to skate with a token financial penalty.

The bottom line is that nobody involved wants to see a megaresort on the Las Vegas Strip go out of business. However, the federal government brought this mess to the attention of a drowsy Control Board, leaving the latter with egg on its face. So something, however symbolic, must be done. 

The alternative is to risk resurgent federal oversight of the casino industry. It was to forestall such gunboat diplomacy by Uncle Sam that then-Gov. Grant Sawyer created the Control Board and Gaming Commission 60-odd years ago. Gov. Sawyer must be rolling over in his grave right now. In the meantime, pass the hat for Resorts World. LVA readers could probably scrape up enough pocket change to cover its oncoming fine.