Howard Lutnick: Soon-to-Be US Commerce Secretary’s Cantor Gaming Once Paid $22.5 Million to Settle Illegal Gambling Charges

Posted on: February 10, 2025, 01:12h. 

Last updated on: February 10, 2025, 04:18h.

Philip Conneller @casinoorgphilc Read More
Expertise: Gaming Business, Regulation, Tribal Gaming.
  • Cantor Fitzgerald chairman and CEO Howard Lutnick is expected to be confirmed as US Commerce Secretary this week.
  • Lutnick founded Cantor Gaming, which in 2016 settled with federal authorities for $22.5M to avoid illegal gambling and money laundering charges.
  • Cantor Gaming faced continued trouble with Nevada regulators until it disbanded in 2019.

Howard Lutnick, President Donald Trump’s pick for commerce secretary, is expected to be confirmed by a vote on the Senate floor this week. But did Democratic lawmakers miss a trick during last week’s Senate hearing by failing to ask the Cantor Fitzgerald boss about Cantor Gaming?

Howard Lutnick, US Commerce Secretary, Cantor Gaming, Cantor Fitzgerald
Howard Lutnick above, is expected to be confirmed as US Commerce Secretary this week. He was the principal owner of Cantor Gaming, which consistently found itself in trouble with federal and US regulators. (Image: Cantor Fitzgerald)

Cantor Gaming was founded by Lutnick and then-Cantor Fitzgerald co-chairman Lee M. Amaitis in around 2004 as a subsidiary of the investment bank. In 2006, it was awarded a gambling license in Nevada and began using banking technology to allow customers to place bets using mobile devices.

In 2016, federal prosecutors handed the company a $22.5 million fine to settle charges of illegal gambling and money laundering. The fine released the company from prosecution.

‘Jersey Boys’

This followed the federal indictment of the company’s VP of Risk Management, Michael Colbert, who was accused of involvement in illegal sports betting rings that used Cantor Gaming’s Nevada sportsbooks to make and lay off high-roller wagers.

Because Cantor accepted high-limit bets, it needed to manage risk by hedging, but it struggled to lay these big bets off in the then-highly limited regulated US market.

Under pressure from his superiors, Colbert shifted action to the illegal markets when he needed to obtain large sums of “buyback.” One such gambling ring, known as “the Jersey Boys,” was permitted to run its illegal operations through Cantor Gaming’s legal Nevada sportsbooks.

In 2014, two years before the federal penalty, Nevada regulators fined Cantor Gaming $5.5 million to settle these compliance violations. It’s still the biggest penalty the state has ever imposed on a licensee.

There’s no evidence that Lutnick was involved in any wrongdoing. Although he was the principal owner of Cantor Gaming, he had no official management role at the company after he stepped down as CEO in 2009. However, he remained “personally involved” with Cantor Gaming’s operations, according to “three people with knowledge of the situation,” who spoke to Politico last week.

Always Trouble

Cantor Gaming changed its name to CG Technology (CGT) to distance itself from the scandal, but fresh controversy was just around the corner.

In 2016, CGT was fined an additional $1.5 million in Nevada for knowingly shortchanging customers at its sportsbooks by over $700K on 20K separate occasions.

The company was aware that a glitch in its software had miscalculated thousands of parlay bets, but it failed to act to correct the errors. Then-CEO Amaitis was forced to resign as part of the settlement.

In 2018, CGT was hauled in front of the Nevada Gaming Control Board (NCGB) again, this time for accepting bets from outside the state on its Nevada-only mobile sports betting app, taking wagers after events had finished, and making incorrect payouts to 1,483 customers.

The board stopped short of revoking CGT’s license but called for a “culture change” and a “necessary reboot” of the company. Regulators fined CGT another $2 million and demanded the operator scrap all proprietary wagering technology in Nevada.

Cantor Fitzgerald sold off what remained of CGT in 2019.