As I explained to the judge…
Every now and then a story breaks in the gaming world that has it all: high-stakes gambling, professional baseball players, and just a whiff of celebrity.
Hard questions were being asked about the extent of his dealing with convicted felon and former pro-baseball player Wayne Nix, not least regarding his illegal sports betting ring.
Recent unsealed documents now lay out the gory details of the alleged wrongdoing, which saw the former MGM Grand head honcho turn a blind eye to a $4m illegal bookmaking operation present in the heart of the casino, as reported by the Las Vegas Review Journal.
MGM Grand even went so far as to dole out freebies to high-rollers including room comps, free golf trips and gambling credit. (No get out of jail free cards though sadly).
The illegal events were titled “Undercover Weekends”, a nudge, wink reference to Sibella’s appearance as a hard-ass with a heart of gold on CBS’ “Undercover Boss.”
The former Resorts World chief has now pled guilty to failing to report suspicious transactions to federal officials.
As part of his 17-page plea agreement, Sibella admitted to knowing Nix was running an illegal gambling operation but still allowed him to gamble.
In 2022, the former executive told law enforcement that he “didn’t want to know because of my position. … If we know, we can’t allow them to gamble. … I didn’t ask, I didn’t want to know, I guess, because he wasn’t doing anything to cheat the casino.”
Sibella now faces up to five-years in prison and a $250,000 fine. MGM Grand will pay a $6.5m fine, as well as forfeit money traced back to the operation.
The news is a timely reminder that, when it comes to a showdown with the US government, the House does not always win.
When confronting operators gets costly
Sweden’s gambling giants are facing a wave of lawsuits from individuals like fashion designer Per Holknekt (pictured), who claims to have lost tens of millions due to aggressive marketing tactics.
This is a recurring story in hot copy and it developed further this week, when Dagens Nyheter pointed out that Holknekt’s high-stakes gamble in the courtroom could leave him facing a multimillion legal bill if he loses.
This battle is part of a broader European trend where gambling addicts are increasingly demanding accountability and compensation for their losses.
In a landmark decision, a man won a case against Betsson in the Patent and Market Appeal Court, with a ruling to reclaim SEK5.8m. This could signal a seismic shift in power from the hands of gambling operators back to the consumers they once enticed, although Betsson has appealed the decision in the Supreme Court.
Professor Jörgen Hettne of Lund University, who is also representing a client against Betsson, points out the precarious nature of these lawsuits.While the outcome remains uncertain, the fight is arduous and costly. Recent court documents reveal that Kindred Group is seeking SEK4.3m in legal fees from Holknekt, with their lawyers clocking in around 730 hours on the case. Conversely, Holknekt is pushing for SEK10.2m in damages.
“Suing is a risky business, especially when you’re up against the deep pockets of gambling firms, and you could end up paying their hefty legal fees,” warns Hettne.
Despite the risk, the rising number of lawsuits indicates a mounting pressure on the industry for greater corporate responsibility.
As Hettne notes, the ripples from these cases are already sending shockwaves through the gambling sector, with the possibility of more rigorous accountability on the horizon.
A matched bettor’s dream
ESPN’s excellent David Purdum this week brought us the curious story of how an odds boost on Penn’s ESPN Bet sportsbook led to record betting volumes on the exchanges in New Jersey.
Last weekend, ESPN Bet offered punters the chance to bet on boosted odds for the NFL’s Baltimore Ravens to beat the Houston Texans at their showdown on Saturday.
Odds for the Ravens to win by 10 or more points were set at +110 (that’s 11/10 for normal people), or to win by 11 or more points at +140 (7/5).
So far, so normal – odds boosts are already a common promotional tool in Europe and have been steadily making their way into customers’ hands in the US in recent years.
Usually, however, such promos bring with them significant restrictions on stakes, to prevent sportsbooks from being exposed to too much risk.
In this case, however, betting limits were set upwards of $200,000 according to ESPN, which created a significant “arbitrage betting” (European: matched betting) opportunity for anyone with a large amount of cash lying around.
A matched bet – where a punter backed the Ravens on ESPN Bet and then laid the selection on an exchange – would generate a guaranteed return of 2.5%, according to the article.
“If you happen to have $100,000 sitting around and can get it into a sportsbook, it was a risk free $2,500,” COO of betting exchange Sporttrade, David Huffman, told ESPN.
After the promo started doing the rounds, bettors caught wind of the matched betting potential, as “hours ahead of the game, a surge of interest on the underdog Texans hit New Jersey betting exchange Prophet Exchange,” as the story goes.
By the end of the game, more than $1m had been traded on the Prophet Exchange, making it the company’s “highest bet game since Super Bowl last year” according to co-founder Jake Benzaquen.
Elsewhere, Sporttrade reported around $800,000 in trade volume on its platform from the game, “the most the company has taken on a game in its two-year history.”
Theories abound as to why the promo was permitted with such lofty betting limits – from ESPN Bet having taken a big wager on the underdogs and hoping to balance its risk, to the influence of the ubiquitous Mattress Mack and his renowned big bets.
So far, though, nobody has confirmed exactly why the promo was allowed. It seems this will go down as yet another mystery in the history of US sports betting.