Last week, the Venetian settled with the Nevada Gaming Control Board, agreeing to a $7.2 million penalty regarding anti-money laundering violations connected to illegal bookmaker Mathew Bowyer. These failures affected both current owner Apollo Global Management and previous owner Las Vegas Sands, and they underscore a troubled final decade for Sands in Las Vegas.
When Sands sold the Venetian to Apollo in 2021, it marked the company's exit from the Strip market, focusing its operations solely on Macau and Singapore, following unsuccessful attempts to expand in the U.S. with projects in Texas and New York. Although Sands remains headquartered in Las Vegas, it has sold its casinos, and the digital division, also based in Las Vegas, was closed last year.
Bowyer, a frequent patron of the Venetian since its opening in 1999, has accrued a total of $34 million in AML fines across four Vegas casinos. The specific AML violations at the Venetian occurred between 2019 and 2021, during the latter part of Sands' ownership. The casino failed to verify the origins of Bowyer's funds starting in 2019 and did not formally bar him from gambling until 2024, long after Apollo took over. During his visits between 2019 and 2021, Bowyer made 30 trips to the Venetian, deposited $22.3 million, and lost $3.6 million, as confirmed by the NGCB. These findings contribute to a troubling pattern for Sands leading to the Venetian's sale.
The NGCB has refrained from commenting on the matter until it reaches the Nevada Gaming Commission, while Sands did not respond to a request for comment on the situation.
Upon returning to the Venetian in 2019, Bowyer was among the largest illegal bookmakers in the country. He gained notoriety for his association with Ippei Mizuhara, the former interpreter for MLB player Shohei Ohtani, who misappropriated millions from Ohtani to wager with Bowyer. An earlier report from a Sands host indicated "some concern" regarding Bowyer's return, but internal reviews later dismissed these issues, allowing him to continue gambling. Furthermore, in 2021, a third-party due diligence report raised additional concerns that went unaddressed, even though Bowyer's host reportedly had "actual knowledge" of his illicit activities but failed to act.
The issues surrounding Bowyer share similarities with a previous case involving alleged drug trafficker Zhenli Ye Gon. Ye Gon, who was extradited to Mexico in 2016, was described by federal prosecutors as the biggest all-cash gambler the Venetian-Palazzo had ever seen in the early 2000s. Sands failed to properly vet Ye Gon or his funds, neglecting to file sufficient suspicious activity reports during a period from 2005 to 2007 when he transferred around $45 million and deposited $13 million worth of cashier's checks at the Venetian. The casino only began filing these reports in April 2007, after this window closed.
In 2013, Sands forfeited $47.4 million to the U.S. government in connection with the Ye Gon case, avoiding criminal prosecution. U.S. Attorney André Birotte Jr. stated that Sands "faced the very real possibility of a federal criminal case" before reaching a non-prosecution agreement. At that time, Sands was said to have made significant improvements to its internal compliance program, which helped prevent further criminal action.
Harry Reid, the former Nevada senator and Senate majority leader at the time of the Ye Gon case, reportedly played a role in helping Sands avoid prosecution. Emails released by journalist Jon Ralston indicated that on the day of the forfeiture announcement, Reid's aide forwarded him the news, prompting Reid to respond, "Wouldn’t have happened without my help. We will see [if] it was appreciated." Reid later confirmed that Sheldon Adelson, the founder of Sands, was aware of his assistance.
A separate scandal unfolded between the Ye Gon and Bowyer cases, centering around Sands and Nevada politics. In 2010, former Sands China CEO Steven Jacobs filed a wrongful termination lawsuit against the company, claiming Adelson pressured him to leverage influence against Chinese officials. Sands requested that the NGCB file an amicus brief in support of Jacobs’ lawsuit in 2015 and again in 2016, which was declined. Consequently, Nevada's then-attorney general, Adam Laxalt, met with then-NGCB chair AG Burnett in an attempt to persuade him to file the brief. Burnett later recorded the conversation secretly and shared it with federal authorities, triggering a significant political ethics investigation.
Burnett expressed pride in his decision to deny Laxalt's request during a licensing hearing earlier this year, stating, "There was a lot of pressure placed on Mr. Laxalt to have the Gaming Control Board file an amicus, and he indeed asked us to file that amicus, and I said no."
In a particularly costly chain of events for Sands, 2016 saw the company settle Jacobs’ lawsuit for more than $75 million, pay a $2 million fine to Nevada regulators over issues related to the Ye Gon case, and incur an additional $9 million fine from the Securities and Exchange Commission for accounting irregularities involving a Chinese consultant. The SEC noted that Sands maintained inaccurate records for $62 million paid to the consultant to obscure the company's involvement in specific transactions. Following the SEC settlement, Adelson emphasized Sands’ commitment to enhancing its compliance program.
