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Complaint says CG Technology underpaid bettors by $700,000 at Las Vegas sports books

One of the state’s largest sports book managers could lose its gaming license after being accused of underpaying bettors by more than $700,000 on an estimated 20,000 wagers.

The Nevada Gaming Control Board filed a complaint Monday against CG Technology, saying the company also overpaid about 11,000 bets a total of $100,000 because of a computer software glitch that the company didn’t fix for years. The company never notified gamblers of the problem in paying out some parlay bets.

It’s the second time the state has sought to discipline the company over failures within its Cantor Sports Book computerized bookmaking system. Two years ago, the Nevada Gaming Commission warned CG Technology that any future complaints could prompt license revocation.

The newest complaint is expected to be reviewed next month by the Gaming Commission. Company officials had no comment when contacted Tuesday.

CG Technology manages race and sports books at the M Resort, the Hard Rock Hotel, Tropicana, The Cosmopolitan of Las Vegas, The Venetian, the Palms and the Silverton. The casinos lease space to CG Technology and have management agreements to split profits but are not subject to disciplinary action.

The Control Board’s six-count complaint said an enforcement division agent responded to a concern at the Silverton in March 2015 from a gambler who said he was underpaid on a winning round-robin parlay wager. The player told the agent he was correctly paid after pointing out the error but that it was the fifth time he had been underpaid on that type of bet.

The board’s investigation found recurring incorrect payments on various winning parlay wagers and that companywide errors occurred for several years because of software issues known by the company.

The company began operating a computerized bookmaking system known as Cantor Sports Book for its mobile sports wagering in August 2011, the complaint said, and the company miscalculated winning parlay bets for several years.

In April 2014 the company expanded the system beyond mobile gaming and began using the software for counter wagers, but gamblers continued to be incorrectly paid. CG Technology only paid the correct amount to gamblers who brought the error to the company’s attention and made no effort to contact bettors about the miscalculated winnings, the complaint said.

“Consequently, (CG Technology) effectively ignored a group of several thousand patrons who had won their parlay wagers but who had underpaid their winnings and left responsibility to those patrons to bring an underpayment to the attention of (the company),” the complaint said.

The complaint said the company took steps to identify all parlay wagers and patrons affected by the software issue only after the board investigation started. The board issued an industrywide notice in February 2010 about the software issue.

When CG Technology was disciplined by gaming regulators in January 2014, the company settled and paid a $5.5 million fine, the largest ever imposed by Nevada regulators.

In that case, an 18-count complaint said the sports betting company should have known that Michael Colbert, its former director of risk management and vice president, was accepting illegal wagers and acting as an agent to recruit bettors.

Colbert pleaded guilty in New York federal court in August 2013 to a single felony charge of conspiracy in connection with his role in a nationwide illegal bookmaking ring.

Regulators accused the company of failing to supervise an employee sufficiently to prevent criminal activity violating Nevada gaming regulations.

In the settlement, CG Technology neither admitted nor denied the complaint’s first four allegations but agreed the Control Board “could prove by a preponderance of the evidence” that the company might have been found guilty at a hearing.

Gaming Control Board Chairman A.G. Burnett called that action “a severe punishment.”

The Review-Journal is owned by the family of Las Vegas Sands Chairman and CEO Sheldon Adelson. Sands operates The Venetian. The Review-Journal publishes sports betting lines and odds provided by CG Analytics, a subsidiary of CG Technology.

Contact Richard N. Velotta at rvelotta@reviewjournal.com or 702-477-3893. Find him on Twitter: @RickVelotta.

 

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