Vegas sports book operator accused of underpaying bettors

LAS VEGAS (AP) - Nevada gambling regulators have accused one of the state's largest sports book operators of a series of egregious violations, including underpaying winners, accepting bets after a match and knowingly withholding information even after authorities warned them two years ago to stay out of trouble following a record $5.5 million settlement involving a separate illegal sports betting case.

CG Technology was hit with the six-count complaint filed by the Nevada Gaming Control Board on Monday. The company has 30 days to formally respond to the state. It couldn't be reached by The Associated Press for comment Wednesday.

The Las Vegas company runs seven area sports books, including at the Cosmopolitan, Venetian and Tropicana casinos on the Strip, as well as the M, Hard Rock, Palms and Silverton casinos.
FILE - This Dec. 7, 2010 file photo shows The Cosmopolitan of Las Vegas luxury resort casino and hotel. Nevada gambling regulators have accused CG Technology, one of the state's largest sports book operators, of a series of egregious violations, including underpaying winners, accepting bets after a match and knowingly withholding information, Wednesday, May 18, 2016.

The Cosmpolitan is one of the seven sports books involved. (AP Photo/Isaac Brekken, File)
State regulators began investigating CG Technology's operations in March 2015, after a Silverton Casino patron reported that he had been underpaid on a winning round-robin parlay wager. He said he had been eventually paid out in full after he complained to the operator but that it was the fifth time he had experienced such an error.

Silverton spokesperson Kimiko Peterson confirms that the casino has a leasing agreement with CG Technology with profit sharing, but that the casino itself isn't involved in the operations of the sports book and is not subjected to the disciplinary complaint.

"This is between CG Technologies and the Nevada Gaming Control Board," Peterson said in an email.
State regulators say they discovered that that incident represented a known, "recurring and company-wide error" that could be traced back to August 2011, when the company began using its "Cantor Sports Book" computerized bookmaking system.
Software glitches could miscalculate winnings, but CG Technology expanded the system's use in 2014. The state said that move resulted in an increase of incorrect payouts, including 20,000 underpaid winning m88bet bets totaling $700,000, and 11,000 overpayments totaling $100,000.

The state was also underpaid in associated gambling taxes and fees as a result of the overpayments.
The state's complaint also said that CG Technology "effectively ignored" the thousands of bettors who were shortchanged on their winning bets but weren't aware or didn't complain about it, adding: "Only after the (regulators) initiated its investigation did (the company) take steps to identify all parlay wagers and patrons affected" by its software issue.
The company took steps to correct the problem after the initial Silverton report in March 2015.

Also noted were instances of CG Technology accepting bets after a sports event was over, including for a mixed martial arts match in January 2016 and a boxing match in May 2015.
During the investigation, the state also reports that the company and its leaders didn't fully cooperate, including refusing access to its computers and documents as requested. CG Technology's conduct, the state says, "constitutes a failure to comply with ... all federal, state and local laws and regulations" for licensed gambling in Nevada.

The state's Gaming Control Board acts as both the regulators and prosecutors who investigate and file complaints for disciplinary action against gambling operation license holders. The cases are brought to the Nevada Gaming Commission, whose members serve as the judge and jury in determining action, including license revocation.
That's exactly what the commission threatened in 2014, when they approved a settlement that fined CG Technology $5.5 million, which remains the largest settlement of its kind in state history.

The board accused the company of failing to adequately supervise its former sports book director, who was involved in a nationwide illegal sports betting ring. CG Technology, which during that investigation was known as Cantor Gaming, didn't directly admit guilt to all the charges.
But it acknowledged that regulators could have proved them all and said at the time that it had improved its internal checks and balances.

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