Nevada Cracks Down: $26M in Fines Signal Gaming Industry AML Overhaul

Nevada gaming regulators have imposed a $7.8 million fine on Caesars Palace for failing to comply with anti-money laundering (AML) rules, marking the third major casino to face penalties tied to illegal gambling activities linked to Shohei Ohtani's former interpreter, Ippei Mizuhara. The Nevada Gaming Control Board cited Caesars' failure to verify the source of funds for Mathew Bowyer, an illicit bookmaker who wagered millions between 2017 and 2024 at the Las Vegas property. Bowyer, who pleaded guilty in 2024 to running an illegal gambling business and money laundering, was connected to Mizuhara, who was later sentenced to five years in prison for stealing nearly $17 million from Ohtani's bank account.

The fine follows similar actions against Resorts World ($10.5 million) and MGM Resorts International ($8.5 million) for their roles in Bowyer's operations, underscoring a broader regulatory crackdown on AML compliance in the gaming industry. Caesars executives acknowledged systemic failures in their compliance protocols, with CEO Tom Reeg stating, according to reports, "We didn't catch Bowyer and we should have," during Thursday's hearing. The settlement mandates enhanced staff training and stricter AML measures, including doubling the company's compliance budget over seven years.

Bowyer's case, which involved taking bets from hundreds of individuals, including Mizuhara, has exposed vulnerabilities in casino due diligence processes. Gary Carano, Caesars' executive chairman, admitted the company's AML program "operated in this instance was unacceptable" and pledged to prevent recurrence. The fines collectively highlight the Nevada Gaming Commission's resolve to enforce stricter oversight, with Commissioner Brian Krolicki calling Bowyer a "wrecking ball" on compliance efforts.

The penalties also reflect a broader trend of regulatory scrutiny in the gaming sector, particularly as sports betting expands and ties to high-profile athletes and their entourages grow. According to Control Board Chairman Mike Dreitzer, Caesars' fine, while significant, is three times the net profits it earned from Bowyer's gambling over seven years. The company has since banned Bowyer from its properties and restructured its compliance team, though critics argue the measures may not fully address systemic risks.

As the gaming industry grapples with evolving AML challenges, the Bowyer case serves as a cautionary tale for operators. With Nevada's Gaming Control Board continuing to prioritize compliance, casinos face mounting pressure to modernize their AML frameworks. For Caesars, the fine represents both a financial blow and a reputational setback, as Reeg conceded the matter "has been a stain on the state".