Correction: An earlier version of this story cited a Las Vegas Review-Journal story that said that CG Technology’s license to operate in Nevada might be revoked this week. While that is within the power of Nevada regulators, the original LVRJ story has been recast and now downplays that potential outcome. LSR regrets the error.
Nevada sportsbook operator CG Technology faces a $250,000 fine and the discontinuation of the use of its sports betting technology at a meeting of the state’s gaming regulators this week.
The meeting comes after a spate of problems for the bookmaker were revealed in a complaint and subsequent settlement agreement with the Nevada Gaming Control Board. The settlement is on the agenda for the Nevada Gaming Commission to review at its Thursday meeting.
A spokesperson for CG Technology said it had no comment for Legal Sports Report when contacted last week in advance of the meeting.
So what’s going on with CG?
The latest complaint and settlement for the sportsbook operation is the third in recent years. It agreed to pay a fine of $1.5 million in 2016 and $5.5 million in 2014. CG provides a sportsbook for the Cosmopolitan, the Venetian and the Tropicana, the Palms and Hard Rock in Nevada sports betting, among others.
The complaint against CG details some of the things that happened via the sportsbook that violated regulations:
- Someone was able to place a bet on CG’s mobile app from Maryland. Sportsbook operators in Nevada — or in any US state where wagering is legal, for that matter — are only able to accept bets from people physically located in the state at the time of a wager. That’s also a potential violation of the federal Wire Act. Changes made after that wager “enabled an additional seven out-of-state sports wagers to be placed through CGT’s mobile sports betting application between April 7, 2017 and April 8, 2017” per the complaint.
- On several different occasions, CG accepted bets on mixed martial arts and boxing matches and college football games after the events had concluded.
- Nearly 1,500 bettors received incorrect payouts on winning bets: “Of the 1,483 winning wagers, 783 received a total of $7,368 more than expected and 700 received a total of $4,465 less than expected.”
Something is going to change at CG
The settlement, if it goes through on Thursday, would mean a $250,000 fine and would also mean CG can no longer use its own technology to book sports bets in the state. From the settlement:
Within six (6) months following the date this Stipulation for Settlement is accepted by the Commission, CGT shall transition to an unaffiliated third-party’s sports pool wagering system and CGT shall permanently discontinue the use of its sports pool wagering system and all of its components, collectively referred to as Cantor Sports Book (CSB), at which time CSB and its components will be deemed permanently disapproved and the system or its derivatives will not be considered for future approval.
The settlement goes on to list all of that: “The components of Cantor Sports Book include Wagerplayer, CSS, Flex Terminal, Device Manager, CG Portal Android, CG Portal iOS, Sportsbook and Sportsbook-Theme, Adapter, and Midas.”
Basically, state regulators are saying CG’s sportsbook tech is not approved to operate in the state, which makes it not clear what would happen to CG even if it were to keeps its license. It would have to partner with a third party just to continue operating, and that might not be a viable business model for CG. Per the settlement:
CGT has agreed to permanently discontinue the use of and completely replace its sports pool wagering system. The violations alleged in the current Complaint are due, in part, to problems associated with CSB.
Earlier last year, CG was reportedly on the auction block, but nothing ever happened on that front. A sale to take over its current operations and leases might make a lot more sense than CG just continuing on with new tech.
What’s next?
A report from the Las Vegas Review-Journal that CG could lose its license — a story that was recast after its initial publication — doesn’t line up with this from the settlement, per the NGCB:
The BOARD perceives that changes have occurred and continue to occur atCGT related to its cooperation with the BOARD and there appears to be a sincereeffort to comply with the Gaming Control Act and Regulations of the Commission.
So while CG is obviously in some trouble, the possibility of losing its license does not look to be in the immediate cards, short of new information coming on Thursday.
