CG Technology Was Hit In 2014 With Largest Gaming Fine In Nevada History
WSOP
Legal Sports Report

Sportsbook Operator CG Technology Will Pay $1.5 Million Fine In Nevada, CEO To Resign

Nevada CG Complaint
Sportsbook operator CG Technology has agreed to pay a $1.5 million fine, and its CEO will be forced to step down as a part of a settlement with the Nevada Gaming Control Board.

The settlement stems from a complaint filed by the NGCB earlier this year, in which it alleged that CG Technology was responsible for “serious and significant failures” in its facilitation of sports betting in the state.

The news was first reported by the Las Vegas Sun.

CGT provides sports betting for the Cosmopolitan, the Venetian and the Tropicana, the Palms and Hard Rock in Nevada among others.

CGT is also the only book in the state to deal in entity wagering.

The complaint against CGT and the settlement

The original complaint from the NGCB — which can be seen in its entirety here — pulled few punches in its assessment of problems it encountered with CG Technology. It levied six counts against CGT.

The NCGB alleged that CGT failed to “properly investigate, correct, and completely and accurately report to the BOARD systemic problems with CGT’s computerized bookmaking system.”

Those problems, the NGCB notes, date back to 2011 and involve incorrectly paid wagers. It also alleges that CGT did not take any action on the problems identified until the NGCB started its investigation in the spring of last year.

The CGT settlement

In the settlement (here) CGT admits “that their computerized bookmaking system … under certain circumstances miscalculated winning single and round robin parlay wagers,” and that it did  not notify patrons of these problems in a timely fashion.

The “vast majority” of the problems were underpayments on bets, according to the settlement. Those patrons have largely been made whole.

As a part of the settlement, CGT agreed to waive its right to a public hearing of the charges. What did CGT get hit with in the settlement?

  • It will pay a fine of $1.5 million to the state.
  • President and CEO Lee Amaitis will resign, effective at the end of August.
  • CGT has to retain an independent third party for one year to review its software and product development process for compliance with Nevada regulations.
  • An escrow account of $25,000 shall be set aside for any other bettors that were underpaid.

Amaitis is out after also overseeing CGT when the biggest fine against a gaming operator in the state of Nevada was handed out — $5.5 million in 2014. In that case, a CGT staffer was found to have been taking bets from an illegal sports betting ring.

How the CGT investigation began

The NGCB explained its interest in the CGT platform began in March of 2015, when an agent of the board looked into a complaint from a patron of the Silverton Casino — another CGT client.

The patron told the NGCB that he had been originally been underpaid on a parlay bet, and that this was not the first case of such an underpayment. He also said that he had been correctly paid by the Silverton sportsbook once he pointed out the problem.

That single investigation, however led to the NGCB discovering what it believed to be a much larger problem.

From the complaint:

However, the BOARD’s investigation revealed that incorrect payments on various winning parlay wagers had been a recurring and company-wide error for several years due to a software issue or software issues known to CGT.

The NGCB went on to note that the problem — which had existed since CGT’s inception and was known since its launch — increased once CGT started using it for over-the-counter wagers in 2014, not just its mobile wagers.

CGT on a short leash?

In recent years, that’s two pretty big strikes against the sportsbook operator. What will the NGCB do if CG gets a third strike?

Clearly the third party review and the ouster of Amaitis will serve to keep CGT in line in the short term. But it seems unlikely that the NGCB will be very forgiving if CGT encounters additional serious problems in the future.

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Dustin Gouker
- Dustin Gouker has been a sports journalist for more than 15 years, working as a reporter, editor and designer -- including stops at The Washington Post and the D.C. Examiner.