Two years after shouting, “That’s not fair!” at a Nevada Gaming Commission meeting, billionaire media mogul Barry Diller returns Wednesday to secure an extension of the two-year license for his ownership stake in MGM Resorts International.
The decision in May 2022 by the Commission to grant Diller a limited instead of full license required him to go through the process again this year, with a hearing before the Nevada Gaming Control Board on Wednesday and May 16 before the Commission.
Diller, a member of MGM’s board of directors, was limited at his previous appearance, because he was under investigation for insider trading by the Securities and Exchange Commission and Justice Department.
The Commission voted 4-1; only Commissioner Oganna Brown objected, saying no limitation was needed on Diller. If anything arose from the federal investigation, the Commission could take action, she said. Brown’s term as a commissioner ended earlier this month.
At the time, Diller told the Commission it was “bad timing” and that he had no insider knowledge of the stock purchase that was under scrutiny.
The Gaming Control Board had recommended unconditional licensing, but The Wall Street Journal came out with a report that Diller and fellow media mogul David Geffen and Diller’s stepson Alex von Furstenberg had acquired a large number of shares of Activision Blizzard stock, days before the video-game maker agreed to be acquired by Microsoft for $68.7 billion.
Activision shares soared on the news of the deal and the Journal reported the three men had an unrealized profit of about $59 million on an options trade.
Diller insisted that he hadn’t waited until he was in his 80s to commit fraud; he would never put himself at such a risk, he wanted to give the shares back, he wouldn’t act that way for more “resources” he didn’t need, and it was all a coincidence.
MGM’s legal counsel maintained that there hadn’t been an allegation or finding of wrongdoing and that Diller had been guided by ethical conduct in his life. They argued that a limited license is typically for someone who behaved in a way that would cause the Commission to be concerned. They also expressed concern that the two-year license would send a bad message about the stability of the licensing environment in Nevada, considered the gold standard.
Commission member Rosa Solis-Rainey, who’s still on the regulatory body, said they couldn’t ignore the investigation and had to wait out the results, because “a gaming license is a privilege.”
Brown countered that there was no evidence to show her a reason why conditions should be placed on the license and that “coincidences occur all of the time”; if anything was found, Diller could let them know and the Commission would deal with it appropriately.
The Commission ruled that Diller could return for full licensing once the matter was resolved without any wrongdoing alleged. Since that hearing, no new details have emerged in public reports about the investigation.
Diller is chairman of IAC, which has a large ownership stake in MGM and thus requires licensing. It was reported at a 14% stake two years ago. He is also the chairman of Expedia, the founder of Fox Broadcasting Company and USA Network, and the former chairman and CEO of Paramount Pictures.
