CG Technology’s Nevada gaming license in jeopardy for ignoring software glitch

cg-technology-nevada-gaming-license-jeopardySportsbook operator CG Technology (CGT) could lose its Nevada gaming license after being accused of ignoring a software glitch that miscalculated thousands of parlay wagers over a three-and-a-half-year period.

On Monday, the Nevada Gaming Control Board (NGCB) filed a formal complaint against CGT, alleging that the company had been aware of “systemic problems” in its bookmaking software, yet did nothing to fix the glitch and initially attempted to interfere with the NGCB’s investigation.

The complaint, which was submitted by Nevada Attorney General Adam Laxalt, includes six separate counts against CGT. Each count carries the possibility of a $100k penalty.

The NGCB is also pursuing disciplinary action against CGT’s Nevada gaming license. The Nevada Gaming Commission is expected to consider the matter at its next meeting in June.

The wagering in question occurred between between August 2011 and March 2015. All told, the NGCB says CGT underpaid winning bettors by around $700k on some 20k ‘round robin’ parlay wagers, while overpaying around $100k on an additional 11k wagers.

Punters who noticed the errors and complained were paid the correct amount but the NGCB says CGT did nothing to alert customers who didn’t complain and only conducted a complete accounting of the total number of miscalculated wagers after the NGCB launched its investigation.

In March 2015, a punter complained to the NGCB about being shortchanged by the CGT-operated sportsbook at the Silverton Casino Lodge. The punter stated that it was the fifth time he had been incorrectly compensated by the sportsbook for that type of wager.

The Cantor Sports Book software at the heart of the matter was originally designed for the company’s mobile wagering app. The software was later adapted for use in over the counter wagers at the sportsbooks CGT operates on behalf of Nevada casinos. The NGCB investigation determined that CGT had known there was a “recurring and company-wide error for several years” but had done nothing to repair the glitch nor alerted the NGCB that there was a problem.

This isn’t the first time that the NGCB has had to rap CGT’s knuckles. In January 2014, the company paid a $5.5m fine for its failure to notice that its VP of race and sports risk management Michael Colbert was involved with an illegal messenger betting ring. The scandal led the company to rebrand from its previous identity as Cantor Gaming.

As part of that 2014 disciplinary action, CGT was effectively told one more cockup could result in its license being revoked. The fate of CGT’s Nevada license will likely hinge on its ability to convince the NGC that it sincerely believed it had addressed the software error when it first became aware of the problem.