American sportsbook operator CG Technology has agreed to pay a fine of $1.5 million after being charged by the Nevada Gaming Control Board for allegedly over or under-paying bettors in the state by hundreds of thousands of dollars.
According to a report from the Las Vegas Sun newspaper, CG Technology operates race and sportsbooks at Silverton Las Vegas, Palms Casino Resort, The Venetian Resort Hotel Casino, The Cosmopolitan Of Las Vegas, Hard Rock Hotel And Casino Las Vegas, M Resorts Spa And Casino and Tropicana Las Vegas and the settlement also includes a stipulation that will see its President and Chief Executive Officer, Lee Amaitis, resign at the end of August.
The settlement moreover requires CG Technology to retain “one or more independent third parties” to review its software and product development processes for one year in order to ensure that its technology complies with the Nevada Gaming Control Act, regulations of the Nevada Gaming Commission and policies of the Nevada Gaming Control Board.
The arrangement, which needs to be approved by the Nevada Gaming Commission, comes two months after the Nevada Gaming Control Board filed a six-count complaint alleging that CG Technology underpaid winning parlays by about $700,000 on more than 20,000 occasions from August of 2011 to March of 2015. In addition, the action claimed that the firm overpaid players by around $100,000 over 11,000 times during the same time period.
The Nevada Gaming Control Board charged that the incorrect payments arose due to “systemic problems” with CG Technology’s computerized bookmaking system while additionally alleging that the company did not “properly investigate, correct and completely and accurately report” the issues despite making multiple admissions that there were problems.
In agreeing the settlement, CG Technology admitted that its computerized bookmaking system had miscalculated successful single and round-robin parlay wagers under specific circumstances and that it had failed to notify bettors of those errors in a timely fashion. It additionally confessed that it did not “timely disclose to the [Nevada Gaming Control] Board the nature and scope of the issues causing the miscalculations”.
However, CG Technology denied that it had neglected to cooperate with the authority’s investigation despite agreeing that “there is a sufficient basis contained in the allegations to warrant settlement” and divulged that no similar errors had occurred since it fixed its systems in March of 2015.
“The [Nevada Gaming Control] Board will not tolerate improper or incorrect payments to patrons by gaming licensees and, therefore, takes this matter extremely seriously,” read a statement from AG Burnett, Chairman for the Nevada Gaming Control Board. “This settlement contains several harsh punishments and requirements for remediation that reflect those concerns.”