Entain and Accel Entertainment have overcome their compliance issues and will operate with full licenses in Nevada going forward, just like media mogul Barry Diller. Gone is the stigma of having a limited license due to concerns over the way they operate.
The two hearings before the Nevada Gaming Commission followed that of Diller, a shareholder and member of the board of MGM Resorts International, in which the Commission granted a full Nevada gaming license after previously restricting him to a two-year license over insider-trading allegations. His attorneys maintain that Diller has been cleared.
The three cases show how stringent Nevada regulators can be when it comes to upholding the state’s reputation as the “gold standard” for licensees.
Entain, the British sports-betting and technology company that has a joint partnership with MGM Resorts under BetMGM, had been operating under a two-year license and most recently a three-year license that expired this month. That was due in part to concerns over past business practices, especially operating in unregulated markets.
“The company has taken great strides not only to move past some of the historical issues, but to accept responsibility for them and find ways to learn and grow,” said Entain attorney Erica Okerberg.
Entain Chairman Barry Gibson called Nevada the gold standard when it comes to regulation and that it was “an absolute imperative to get our house in order to bring our company up to standards, so we would get a full license.”
Gibson said Entain has accelerated its retreat from unregulated markets around the world, some 140 markets where it previously operated.
“That came at a big price. We lost $100 million in profit by pulling out, but you can’t judge profit against doing the right thing,” Gibson said. “My board colleagues supported the proposal. If we’re going to say we have to do the right thing, we have to do the right thing. That meant exiting profitable markets and we’ve done that.”
Gibson said 95% of the company’s revenue comes from regulated markets and those about to be, such as Brazil, which is on the path to regulation. The government has passed the laws, the Gambling Commission is in the process of awarding licenses, and the regulatory process should be completed by the end of the year, he said.
Entain executives will pull out of any market that is in the process of being regulated that doesn’t follow through on that plan.
“This is a casebook study on how to put on governance and compliance and ethics issues,” Commissioner Brian Krolicki said. “It’s really impressive. I know the opportunities lost are significant.”
Entain’s contribution to Las Vegas is with its Stadium Technology Group that serves MGM and other operators.
Illinois-based Accel, a video gaming terminal provider, had been operating under a two-year license with a backdrop of being fined $5 million by Illinois regulators for violating a law that forbade incentives to keep Accel machines in video gaming establishments.
Okerberg, who also represents Accel, said when the Commission approved a two-year license in May 2022, it gave the company time to improve its compliance program and deal with outstanding regulatory issues.
“Each of those items has been addressed and they’ve done more,” Okerberg said. “The company has taken significant efforts to find ways to improve.”
Karl Peterson, chairman of the board of Accel, said they previously pledged to the Commission that they would make changes in how the company is operated in areas of diligence, compliance, and oversight.
In 2022, Accel acquired Century Gaming, the distributed gaming operator in Nevada and Montana, for $164.2 million.
“Accel is unquestionably a better company today for those efforts,” Peterson said. “Our company is fully committed to meeting your standards as a licensee. We understand it’s a privilege.”
The company has new policies for doing diligence on new vendors. It will review compliance concerns and move away from potential partners not good for the business.
Commissioner Rosa Solis-Rainey commended Accel for its improvements and for using UNLV as a resource to help develop training. “You’ve done a lot of work and I hope that keeps up,” Solis-Rainey said.
Gaming consultant Brendan Bussmann, managing partner of B Global, said what happened with Entain and Accel follows the same premise as Diller: They “met all the obligations” for a Nevada license, which means they don’t have to return to the regulatory body unless there’s a problem.
“The Commission wanted to make sure that people who hadn’t previously been in the Nevada market were at the same standard they expect from everybody else,” Bussmann said. “In some of these jurisdictions where you operated in gray markets, you had to do due diligence to make sure they were okay and didn’t have any issues.”
Bussmann said Nevada continues to be viewed as the gold standard and, since there’s not an automatic renewal under a full license, that requires that issues are cleared up at the start.
Nevada is considered one of the toughest states to get a license, but there are other states where applicants “face interesting conundrums,” Bussmann added. “The way they do it in some of these other states, you come back every x number of years. That’s because of limited resources and other things.”
