Vegas Casinos Face Federal Investigations • This Week in Gambling


Several Las Vegas casinos are looking at investigations from Federal agencies this week. MGM Resorts and Caesars Entertainment are dealing with separate issues in Nevada, and some in New Jersey.

The Federal Trade Commission is looking at MGM’s handling of last year’s cyber attacks, and the company has sued the agency. Plus, the Department of Justice is looking at the possibility that Caesars colluded with other hotel operators to fix prices!

Hello friends, Jay Todd here standing just outside of the MGM Grand. That was Ground Zero for last year’s cyber attacks that targeted several of their properties, along with Caesar’s Entertainment. Now MGM is suing the US Federal Trade Commission to stop their investigation into those attacks, but why? That’s a very good question.

The head of the US Federal Trade Commission was staying at an MGM property in Las Vegas last September when all hell broke loose for Vegas casinos.  As the cyber attacks unfolded, chairman Lena M Conan found MGM employees writing down credit card numbers on pieces of paper, and when she confronted employees on how the company was handling the data, they could not provide an answer.

The FTC opened an investigation into MGM’s handling of the situation shortly afterwards, and now MGM has sued the FTC and Ms Khan, claiming their investigation deprives the company of its constitutional right to due process and a hearing before an unbiased court. MGM has also filed a motion to recuse Ms Khan due to her personal involvement in this matter.

Even though the FTC does not appear to be interested in how other Vegas casinos, including Caesars, handled these attacks, they are having legal issues of their own… Caesars, that is. The Department of Justice and the FTC are looking at them for hotel price fixing, which is obviously illegal. This unfolding in Atlantic City, and there are lawsuits.

Caesar’s Entertainment and other Atlantic City casino operators have been sued for allegedly using third-party software to inflate their hotel room rates and guarantee that those rates  stay artificially high. This would be illegal under the Sherman Act, which criminalizes competitors from colluding to raise or fix prices. Now the Department of Justice Justice Antitrust Division, along with the FTC, are looking into these accusations which could result in greater scrutiny of how all hotel operators in New Jersey, Nevada, and all across America use such software to set their room rates.

We close our show here, outside of the Ellis Island Casino, just off the Vegas Strip. A favorite of the smaller Vegas casinos by locals and tourists alike. And that noise you may hear in the background? That’s not traffic. It’s the sound of expansion! Family owned and operated Ellis Island is growing by nearly 6,500 square feet, expanding their casino floor and adding a sports book! This comes at the expense of their famous micro brewery, which was torn down to make way for the additions. But don’t worry, they are still producing their famous brews, which are available available for purchase, but they are now being made offsite. Renovation work will take from 8 to 10 months, and Ellis Island will celebrate its 56th anniversary this August.

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