The Resorts World Scandal: When Corporate Deception Meets Regulatory Failure

The Facts: A Pattern of Concealment and Violations

Resorts World New York, a sister company of Resorts World Las Vegas and subsidiary of Malaysian conglomerate Genting Berhad, stands accused of deliberately concealing regulatory violations in its application for a full-service casino license in New York. Despite being one of three applicants recommended by the New York State Gaming Facility Location Board, the company’s failure to disclose money laundering violations and subsequent fines raises serious questions about its suitability for licensure.

The New York board’s selection report explicitly noted that Resorts World “omitted violations resulting in fines at Resorts World Catskills, Resorts World Hudson Valley, and its current video lottery gaming facility at Aqueduct.” This lack of transparency occurred despite specific requirements to disclose all disciplinary actions within the past five years. The board appropriately characterized this omission as “concerning” and recommended that the full commission weigh this deception in its final licensing decision.

This pattern of regulatory non-compliance extends beyond New York. Federal authorities from the Central District of California have been investigating various allegations involving Resorts World Las Vegas, MGM Grand, and former president Scott Sibella. Resorts World terminated Sibella weeks after these investigations became public for violating internal policy. Sibella later pleaded guilty in federal court to failing to comply with anti-money laundering laws while president of MGM Grand and lost his Nevada gaming license.

Resorts World LV agreed to a $10.5 million fine imposed by Nevada gaming regulators for allowing illegal bookmakers Mathew Bowyer and Damien LeForbes to gamble at the casino despite lacking documented sources of income. Both individuals pleaded guilty to money laundering and illegal bookmaking after losing nearly $24 million at Resorts World LV. Federal prosecutors have yet to file charges or impose an anticipated fine against Resorts World, leaving this chapter unresolved.

The Tax Paradox: Nevada’s Anomalous Position

The article reveals a striking paradox: Nevada-based casino companies, including Resorts World, Bally’s, and Hard Rock, are willing to pay dramatically higher tax rates in New York than they pay in their home state. Resorts World proposed a 56% tax on slot machines and 30% on table games in New York, compared to Nevada’s maximum 6.75% gross gaming tax. This willingness to accept significantly higher tax burdens elsewhere raises fundamental questions about Nevada’s tax structure and whether it adequately serves the public interest.

New York’s tax structure requires applicants to propose rates of at least 25% for slot revenue and 10% for other sources. The selected applicants’ proposed rates would generate approximately $1 billion annually in incremental gaming tax revenue by 2036, totaling $7 billion plus $1.5 billion in licensing fees between 2027-2036. By comparison, Nevada’s entire gaming tax revenue totaled $1.1 billion in fiscal 2024.

The Competitive Landscape Argument

Industry advocates have long argued that Nevada’s low tax rate is justified by unlimited competition, unlike other jurisdictions with limited licenses or monopoly systems. Alan Feldman, former MGM executive and current Director of Strategic Initiatives for UNLV’s International Gaming Institute, explains that states with “monopoly systems” can impose higher tax rates because operators remain profitable without competition. Competitive markets like Nevada allegedly require lower rates to attract multiple operators.

However, this argument faces challenges in the digital age. As the article questions, “does the argument hold water now that nearly all adults hold a virtual casino in the palm of their hand?” Former California gambling regulator Richard Schuetz notes that electronic gambling and brick-and-mortar casinos “are not the same product,” suggesting that traditional competitive arguments may need reevaluation.

Nevada’s Political Resistance to Tax Reform

The gaming tax rate represents what the article describes as “the sacred cow of Nevada tax policy.” Increasing the rate has proven politically impossible despite multiple attempts. Former State Senator Joe Neal, a Democrat, spearheaded two ballot initiatives in the early 2000s that would have increased the gaming tax rate from 6.25% to 11.25% on casinos with monthly revenue exceeding $1 million. Neither initiative garnered sufficient signatures.

A 2022 ballot initiative sponsored by the Clark County Education Association proposed increasing the gaming tax rate to 9.75% on monthly revenue exceeding $250,000. While the measure qualified for the ballot, the Nevada Resort Association successfully challenged it in court, resulting in its removal. Current political figures including Governor Joe Lombardo, Attorney General Aaron Ford, and potential gubernatorial candidate Alexis Hill have offered varying perspectives on tax reform, with Hill specifically calling for modernization of Nevada’s tax system.

Opinion: When Corporate Power Undermines Democratic Institutions

The Erosion of Regulatory Integrity

The Resorts World case represents more than just another corporate scandal—it symbolizes the dangerous erosion of regulatory integrity and corporate accountability. When a company seeking privileged licensing deliberately conceals regulatory violations, it demonstrates contempt for the very systems designed to protect public interest. This isn’t merely a business decision; it’s an assault on the rule of law and the principle that all entities, regardless of their economic power, must operate with transparency and accountability.

The fact that Resorts World’s parent company Genting operates globally makes this deception particularly concerning. Multinational corporations must not be allowed to play jurisdictional arbitrage with regulatory compliance. What happens in Las Vegas shouldn’t stay in Las Vegas when it involves systemic violations of anti-money laundering protocols. These failures enable criminal activity that harms communities and undermines financial system integrity.

The Tax Justice Imperative

The willingness of Nevada-based casino companies to accept dramatically higher tax rates in New York exposes the fundamental injustice of Nevada’s tax structure. For decades, Nevada politicians have protected the gaming industry’s privileged tax position while ordinary citizens bear disproportionate tax burdens through sales taxes and other regressive measures. As Washoe County Commission Chairwoman Alexis Hill correctly noted, “We tax poor people disproportionately more because of our very high sales tax.”

This isn’t merely an economic issue—it’s a moral one. A tax system that allows massively profitable corporations to pay minimal taxes while working families struggle represents a failure of democratic governance. The fact that these same companies willingly pay multiple times higher rates elsewhere proves that Nevada’s tax structure serves corporate interests rather than public needs.

The Competition Argument: Myth or Reality?

The traditional argument that Nevada needs low gaming taxes to maintain competitiveness requires serious reexamination. In an era where mobile gaming and sports betting have transformed the industry, the physical location of casinos matters less than ever before. The notion that Nevada must maintain the nation’s lowest gaming tax rate to remain competitive increasingly appears to be a convenient fiction perpetuated by powerful interests.

As Alan Feldman himself acknowledges, different states have different fiscal needs, tourism markets, labor costs, and political attitudes toward gambling. Nevada’s unique position as the nation’s gaming capital should enable it to demand fair tax contributions from an industry that benefits enormously from the state’s infrastructure, workforce, and regulatory environment.

The Path Forward: Principles-Based Reform

Nevada must embark on comprehensive tax reform that prioritizes fairness, adequacy, and transparency. This reform should include:

1. Modernizing the gaming tax structure to ensure the industry pays its fair share while remaining competitive
2. Reducing reliance on regressive sales taxes that disproportionately burden low-income residents
3. Creating a more diversified revenue base that isn’t overly dependent on any single industry
4. Ensuring transparency in corporate reporting and regulatory compliance
5. Strengthening enforcement mechanisms for anti-money laundering and other regulatory requirements

The Resorts World case should serve as a wake-up call for Nevada policymakers and citizens alike. We cannot allow powerful corporations to dictate terms that serve their interests at the expense of public good. The integrity of our regulatory systems, the fairness of our tax structure, and the very principles of democratic accountability demand bold action.

As citizens committed to democracy, freedom, and liberty, we must demand better from our corporations and our government. The rule of law must apply equally to all, and economic power must never translate to regulatory immunity. Nevada deserves a tax system that funds quality education, infrastructure, and public services while ensuring that powerful industries contribute their fair share.

The time for timid incrementalism has passed. Nevada needs courageous leadership willing to challenge entrenched interests and build a tax system worthy of our state’s potential. The Resorts World scandal isn’t just about one company’s failures—it’s about whether we have the collective will to build a Nevada that works for everyone, not just the powerful few.