A temporary solution
Billionaire Barry Diller has received a two-year casino license in Nevada, pending the outcome of an insider trading investigation. The Nevada Gaming Commission (NGC) announced its decision to limit the license of the major MGM Resorts International shareholder on Thursday. Diller is currently under investigation by the Justice Department and the Securities and Exchange Commission (SEC).
voted 4-1 in favor of the two-year limit
According to media reports of the NGC meeting in which Diller was in attendance, the billionaire contested the ruling, shouting out: “That’s not fair!” In the end, officials voted 4-1 in favor of the two-year limit on Diller’s license.
The commission can take action if there are any issues following the federal investigation into Diller. During the meeting, the MGM owner maintained his innocence regarding the insider trading allegations, describing it as just bad timing and denying that he had insider information when placing the trade in question.
Allegations of insider trading
The Wall Street Journal initially reported the federal investigation into Diller’s trading activity in March. The billionaire bought a significant number of Activision Blizzard shares just a few days before Microsoft announced that it had agreed to acquire the video game company for $68.7bn. On the back of the acquisition news, Activision shares rose significantly.
According to allegations against Diller, he and two others were allegedly part of the trade that led to an unrealized profit of about $59m. Diller questioned why he would do something like that right before such a major announcement. He said: “I didn’t wait until I was 80 years old to commit a fraud.”
Awaiting the outcome of the investigation
The Nevada Gaming Control Board had initially recommended an unconditional license for Diller in March. However, that decision changed after the Wall Street Journal published the news about the insider trading investigation.
will have the option to seek full licensing
On the back of the allegations, the NGC delayed its decision on Diller’s license before Thursday’s meeting. In contrast, IAC CEO Joey Levin had no issue receiving an unconditional license as he was not part of the insider trading allegations. If Diller gets the all-clear from the investigation, he will have the option to seek full licensing from the NGC.
Explaining the decision to cap the license at two years, NGC Commissioner Steven Cohen said: “MGM needs certainty that a member of its board of directors will be serving for the rest of his life and all is merry.” Another commission member reiterated that the body was not accusing Diller of anything, but pointed to the current unknowns surrounding the case.