Nevada Gaming Commission grants Barry Diller limited casino license

May 21, 2022

Major MGM Resorts International shareholder Barry Diller was granted a two-year casino license in Nevada following the outcome of an investigation into insider trading. It was declared on Thursday, May 19, by the Nevada Gaming Commission (NGC) that the license would be limited. The Justice Department and Securities and Exchange Commission (SEC) investigation is underway against Diller.

A limited license was approved for Diller to operate in the casino industry after the NGC asked the former media mogul and chairman of InterActiveCorp (IAC) about a federal investigation into his purchase of Activision Blizzard shares. The IAC owns a 14 percent stake in MGM Resorts. Diller and IAC’s CEO Joey Levin sit on the company's board.

According to a report, Diller, his stepson Alexander von Furstenberg, and movie executive and producer David Geffen purchased a significant amount of the video game company Activision Blizzard shares shortly before Microsoft acquired it for $68.7 billion. Activision's shares rose following the acquisition announcement.

A federal investigation into Diller's trading activities was initially reported by The Wall Street Journal (WSJ) in March. According to Diller, his investment was a coincidence and he was unaware of the upcoming deal. As a result, 4 out of 5 officials voted in favor of the two-year limit on Diller’s casino license.

Diller reportedly disputed the ruling at the NGC meeting in which he was present. He said, “That’s not fair!”

If any issues are raised after the federal investigation of Diller, the commission can act. The MGM owner insisted he was innocent of the insider trading accusations, saying he simply had bad timing in placing the trade in question and that he had no insider information.

Diller and two others have allegedly participated in a trade that resulted in an unrealized profit of $59 million. In response, Diller questioned the rationale behind doing something like that before making such a big announcement.

He said, “I didn’t wait until I was 80 years old to commit a fraud.”

Awaiting investigation results

Diller's unconditional license was initially recommended by the NGC Board in March. But, following the WSJ's reporting about the investigation of insider trading, that decision changed.

Diller's license was delayed by the NGC until Thursday due to the allegations. Joey Levin, the CEO of IAC, received an unconditional license as he was not implicated in the allegations of insider trading. When the investigation is complete, Diller will be able to seek full licensing from the NGC.

NGC Commissioner Steven Cohen explained why the license was capped at two years. “MGM needs certainty that a member of its board of directors will be serving for the rest of his life and all is merry,” he said.

One commission member emphasized that the commission did not accuse Diller of anything but rather referred to the fact that there are still many unknowns regarding the case.

To operate in Nevada's gambling industry, major casino executives and shareholders are required to have licenses. To grant such licenses, the NGC Board would investigate their backgrounds. The whole process aims to prevent corruption and criminal activity within the gambling industry. MGM Resorts' affiliation with IAC paves the way for the casino to enter the online gambling market.

Gus
Gus Anderson
Gus Anderson is a gambling wizard. As a kid he dreamt about becoming a Tennis, Hockey and Golf professional but ended up as a gambling professional with focus on both sports & casino.