Further checks necessary
The Nevada Gaming Commission (NGC) has delayed issuing a gambling license to major MGM Resorts International shareholder Barry Diller due to an ongoing probe into possible insider trading. The NGC announced the delay at a public meeting on Thursday following news Diller is the subject of investigations by federal authorities.
up to the NGCB to further investigate the shareholder’s application
NGC chairwoman Jennifer Togliatti cited a number of gambling regulations relating to Diller’s suitability as the reason to refer the matter back to the Nevada Gaming Control Board (NGCB). It is now up to the NGCB to further investigate the shareholder’s application and to conduct additional fact-finding.
The NGCB investigates the backgrounds of major shareholders and executives who need to have a license to join the gambling industry in Nevada. The regulator follows a suitability process with each applicant to ward off criminal activity or corruption within the casino industry.
On March 2 this year, the NGCB recommended licensing approval for Diller and InterActiveCorp (IAC).
Diller is the current chairperson of InterActiveCorp (IAC), a media and internet company that holds a 14% stake in MGM Resorts. He is under investigation for potentially engaging in insider trading when buying shares in Activision Blizzard Incorporated.
The Securities and Exchange Commission and the Department of Justice (DOJ) are investigating Diller after he made an unrealized profit of $60m through an options trade on the Activision Blizzard gaming company just days before Microsoft bought it in January. Two other individuals under investigation include his stepson Alexander von Fürstenberg and entertainment industry mogul David Geffen.
It was simply a lucky bet.”
The businessman denies that he or the other two individuals had any private information about the merger, telling the Wall Street Journal: “It was simply a lucky bet. We acted on no information of any kind from anyone. It is one of those coincidences.”
Not over yet
Responding to the pause in the Nevada licensing, an IAC representative clarified that the NGC had just delayed Diller’s application rather than canceling it. They said: “We expect no issues with respect to Mr. Diller’s application nor IAC’s.”
IAC secured its 14% stake in MGM following a $1bn investment in August 2020. Both Diller and IAC CEO Joey Levin have joined the MGM board since then. IAC said it saw the opportunity to invest in MGM as a “once in a decade” opportunity.