The Shohei Ohtani Case, Las Vegas, & the ‘Human Head’ Business
The connections between legal and illegal bookmakers - in a criminal sports gambling network featuring NFL, MLB athletes/coaches, the Mob and the royalty of Las Vegas betting bosses.
Scott Sibella is Las Vegas royalty.
The former Chief Executive Officer (CEO) of MGM Grand has virtually no equals in the city of gambling. There might be a few withered ghosts of eccentric billionaires like Howard Hughes, Sheldon Adelson or Steve Wynn floating around the corporatized towers of “sin city” - scrubbing away germs or grabbing at cocktail waitress’ posteriors but for normal, living citizens, Sibella is as high as it gets.
Sibella was known as the “Undercover Boss” - due to his appearance on that morale-sapping program where modern-day corporate executives, like disguised medieval kings, drop into their workers’ lives to discover what miserable conditions, with no certain medical support or proper wages, they have to endure. If the spectacle does not make you go, “Undercover Boss you can kiss my Marxist ass.” you do not know the full extent of unadulterated American corporate greed.
Speaking of unadulterated American corporate greed lets look at modern-day Las Vegas through the downfall of Scott Sibella and his connections with some of the bookmakers involved in the case of the baseball superstar Shohei Ohtani’s translator.
Its an important story because there are two officially sanctioned myths in modern-day America:
i. Las Vegas used to be run by the Mob but that has been all cleaned up. Large corporations, run by responsible, legally robust executives have taken over Vegas, and, now, the city is a collection of family-friendly entertainment centers.
ii. Since the legalizations of sports gambling in 2018, illegal bookmakers have almost all gone away. The few remaining criminal bookies are a dwindling breed from an era when gentlemen wore vests, spats and bowler hats.
Number R3507 & The $5 Million Bet
MGM is HUGE in Vegas. The former business empire that Scott Sibella ran did not just include the parent MGM Casino with its over 5,000 rooms and vast gaming floors but, at one point, a host of other famous casinos like the Mirage, Bell19thagio and Adair. After he finished at MGM, Sibella became the President of one of MGM’s rivals in Vegas - Resorts World. In short, he was one of the most, if not the most, important gambling executive in Vegas.
Sibella also partied with some of the illegal bookmakers, led by Wayne Nix, involved in the Shohei Ohtani translator’s case. This is not just the claim of one D. Hill, investigative academic, rather this is what Sibella admits in his own plea deal with Department of Justice investigators.
According to the legal documents from this case and several others, there was a network of illegal bookmakers that stretched across America. They worked, in some locales, with units of organized crime and went offshore to Costa Rica. It is the same type of criminal network that my research team at the University of New Haven found when the Mafia, Camorra and other Italian organized crime groups made over $7 billion dollars running a sports gambling and match-fixing network. It is the same kind of organization that the New York’s families of La Cosa Nostra use.
The illegal bookmakers had the same kinds of “runners” and “beards” that nineteenth century bookies used in the match-fixing networks at the Oval and other English cricket grounds.
The illegal bookmakers had the same kind of “friends” who would place bets for their high-profile NFL and MLB athletes and coaches that baseball superstar Pete Rose used in the 1980s
The illegal bookmakers also met, partied and bet with the Las Vegas royalty.
More to the eyebrow-raising-point, Scott Sibella, the CEO of the one of the largest casinos in Vegas bet with one of these illegal bookmakers.
The non-prosecution agreement between MGM and the Department of Justice is unmistakable on this point. Sibella had, at one point, a very close relationship with one Wayne Nix, a former minor league baseball player, turned illegal bookmaker. The document reads, in part:
“Until his departure in March 2019, Sibella approved complimentary rooms, food service, and event tickets for Nix, and invited Nix on marketing trips with the purpose of encouraging Nix to gamble at MGM Grand. Not only was Sibella aware that Nix ran the Nix Gambling Business, but Sibella placed bets directly with Nix and one of Nix’s agents. Nix assigned account number R3507 on the Sand Island Sports website to Sibella to track Sibella’s betting history.”
Why?
Why would one of the most powerful people in Vegas invite an illegal bookmaker on marketing trips and give him free rooms and board at his casino? Why would he bet with him? Doesn’t the CEO of one of the world’s largest casinos have somewhere else, somewhere legal, that he could bet?
This case shows the often, thin, cell-like membrane line between “legal” and “illegal” bookmakers. It is a symbiotic relationship that serves both parties.
The illegal bookmakers want two things from their legal counterparts: they want them to launder their cash and their images. It is always useful for illegal bookmakers to have a large, legal sports bookmaker to hedge your bets with. Far more importantly, if they could be seen hanging around on marketing trips with Vegas bookmakers, it made their criminal businesses look legitimate.
On other side, the illegal bookmakers did something incredibly important for the casinos. They brought them “whales”. This was the strength of the linkage seen in the court documents. It is the core business at the heart of Las Vegas - professional “friendships”.
“PDs”
They are called “player development” agents or PDs for short. The real deal? They are whale catchers. Much of the gambling industry - legal and illegal - depends on identifying big losers. Customers/flats who will lose lots of money. The trick is to get them to lose more money and then do it as often as possible.
The flats are divided up between the regular, boring types like me would faint if they lost more than $60 on a bet and then, after coming to, would head for the airport as fast as possible; and the whales, the lost soul types who lose their savings, their houses, their businesses, their wives and, sometimes, their own lives by suicide.
The people responsible for finding and cultivating big losing gamblers are called player developers. Back in the day, their trade meant lots of back-slapping, cleavage showing, and stroking of egos. It meant calling the big losers “high-rollers” or “my friend” to their faces. Although, according to interviews with betting industry insiders, behind their backs, those people often called them “degenerates” or simply what they are “gambling addicts”.
The legal documents are clear that this was one of the driving forces of the relationship between the legal gambling executive Scott Sibella and the illegal bookmaker Wayne Nix:
Both Sibella and Host A were aware that MGM Grand customers placed large bets with the Nix Gambling Business. For example, on March 14, 2018, via text message, Nix told Host A that he would be very upset if he heard that an MGM Grand customer was “in Vegas before he pays me” for a gambling debt owed to the Nix Gambling Business. On January 29, 2019, via telephone, Nix told Sibella that another MGM Grand customer known to Sibella had placed a $5 million bet on the Super Bowl with the Nix Gambling Business.
Outside of Las Vegas, big losers are the engine drivers of much of the sports gambling industry. Research by Gambling Aware presented to the UK House of Lords in 2023, revealed that the legal bookmakers in that country made 86% of their profits from just 5% of their customers.
This focus on finding the big losers is the same in the illegal side of the business.
A contact who used to run poker games for the Lucchese Crime Family, told me, “Sure, I would win money from these guys at the games but the real point was to recruit the whales. Figure out who the big degenerates are and then bring into our sports gambling network where we could take way more of their money everyday.”
Thus the relationship by the King of Vegas and the illegal bookmakers was, in part, based on supplying each other with losing customers.
The Las Vegas establishment is now trying to distance themselves from Scott Sibella. You know the form - statements from corporate headquarters claiming that, essentially, Sibella was a lone wolf, that no one knew anything about his actions - despite him being the chief executive; and whatever else this case represents, it is not systemic of the rest of the Las Vegas gambling culture.
Ummmm, sure…. Except, there is one problem.
This month, two more major cases of criminal connections featuring top Vegas casinos just dropped. One features allegations against Resort Worlds, Scott Sibella’s employer after MGM and the second case features yet another member of the Las Vegas royalty - the Wynn Casinos.
$130 Million Dollars Money-Laundering Fines
If MGM is the primary giant of Vegas gambling then Wynn Casinos are pretty close behind them. What the WLV executives admin to in a non-prosecution plea deal, along with paying $130 million in money-laundering fines, is shocking.
I do not normally cut and paste media releases. However, this one from the Southern District of California on the criminal connections at the Wynn Casinos (WLV) is so mind-blowing and so closely follows the official, legal plea deal that I have broken my own rule to do so.
It reads, in part:
“In one example, Juan Carlos Palermo, while acting as an independent agent for WLV, operated and controlled multiple unlicensed money transmitting businesses in the United States and abroad that conducted more than 200 transfers with bank accounts controlled by WLV or associated entities. These transactions, on behalf of more than 50 foreign casino patrons, exceeded $17.7 million.”
To translate, the perhaps-aptly named Mr. Palermo, operated as a whale recruiter for the Wynn Casino. He transferred millions of dollars of his clients money to Las Vegas so they could play-lose it at the WLV Casinos.
But this work was dwarfed by the WLV activities out of China according to the DoJ press release:
“WLV also facilitated the unlicensed transfer of money through “Human Head” or “Human Hat” gambling, known in Mandarin as “人头” or “ren tou.” In this scheme, a person known as a “Human Head” purchased chips at WLV and gambled at WLV as a proxy for another nearby person who, in some instances, because of federal Bank Secrecy Act or Anti-Money Laundering (BSA/AML) laws, was unable or unwilling to conduct financial transactions or gamble under their own identity. The true patron, however, would direct the Human Head’s gaming. WLV knowingly allowed this form of gambling without scrutinizing the true patron’s funds and without reporting the suspicious activity.
WLV also facilitated the international transfer of money and conducted other financial transactions for WLV patrons whose activity should have triggered the filing of Suspicious Activity Reports. For example, in 2018, WLV facilitated financial transactions worth approximately $1.4 million for an individual who two years earlier had been publicly linked to proxy gambling and a year earlier, while in the company of the President of Marketing of a WLV international affiliate, was denied entry to the United States because of suspected associations with a criminal organization.
In another instance, WLV allowed and did not report transactions involving millions of dollars by an individual who, according to publicly available information, had spent six years in prison in China for conducting unauthorized international monetary transactions and violations of other financial laws.
Wynn regularly contracted with third-party independent agents acting as unlicensed money transmitting businesses to recruit foreign gamblers to the resort, according to the Justice Department. For the gamblers to repay debts to Wynn Las Vegas or have funds available to gamble there, the independent agents transferred the gamblers’ funds through companies, bank accounts and other third parties in Latin America and elsewhere, and ultimately into a Wynn-controlled bank account in the Southern District of California.”
This is a massive story.
There are a whole series of questions around this case and the doubt it throws on the effectiveness of overall US anti-money laundering activities.
Here are a very few of those questions:
Why would the President of Marketing for an WLV international affiliate be travelling with a person who has “suspected associations with a criminal organization” and is denied entry, in the presence of the WLV executive, to the United States? Which “criminal organization”? And if that is a not a red-flag for compliance what do you have to do at the Wynn Casinos to get noticed?
How common is the “Human Head” industry in Las Vegas? Another example - who are these mysterious Latin American “third parties” who help transfer ten-of-millions of dollars yet are desperate to remain anonymous? Is gambling the only industry that they lend their professional services to? Are their clients in the same Latin America import-export business that obsesses much of US law enforcement?
The real explosive nature of the story?
The investigation took place in California.
Somehow, the Las Vegas and Nevada regulators missed all this activity at the Wynn Casinos. Just as they missed the connections, partying and business deals between the CEO of the MGM and illegal bookmakers connected with the Shohei Ohtani’s translator and other professional athletes. It took investigators out of California - hundreds of miles away - to detect what was going on in their own streets.
Meanwhile in Washington DC
Last week, (September 12, 2024), a glimmer of hope appeared over the horizon for a proper regulation of the American gambling industry. Connecticut Senator Richard Blumenthal - the politician who raked Boeing executives with his term “flying coffins” has teamed up with his colleague Paul D. Tonko, and a number of people, including, an ex-gambling addict now turned counsellor, academic and public health fighter Harry Levant to introduce the Supporting Affordability and Fairness with Every Bet (SAFE Bet). More on this proposed legislation in a later article, but for now, know that it plans to introduce much-needed federal regulation into this market.
Judging from the revelations of the MGM and Wynn Casino legal cases, it is badly needed.
Good work Declan, but I am not confident regarding the SAFE Bet Act 's passage. Congresswoman Titus of Nevada made some remarks at an event earlier today indicating she still supports the industry regulating itself (https://x.com/birenbomb/status/1836764816087691465). I feel that a few more suspensions/investigation/scandals will have to occur to generate the momentum to get stronger regulations into place.