Industry

Flamingo Online Casino Ordered to Stop Selling NFTs Over Fraud Allegations

Summary

  • Flamingo Casino Club allegedly has Russian links
  • Authorities say the online casino made false claims about its operations
  • Five US states issued a cease-and-desist order against the sale of its NFTs

Five US states have ordered an online casino to suspend the sale of its non-fungible tokens or NFTs following allegations of fraud and ties to Russia.

Law enforcement officials in New Jersey, Texas, Kentucky, Alabama, and Wisconsin have accused Flamingo Casino Club of failing to disclose its Russian links and running what authorities have described as a “high-tech scam“.

The online casino operates in what is now known as the “metaverse“, a highly interactive 3D virtual world where people socialize, collaborate, purchase items, gamble, and make business.

Tech magnates consider the metaverse as the future of the internet, but there are fears it could become a breeding ground for criminals. For this reason, state law enforcement officials are keeping a close eye on businesses engaged in this area as allegations of fraud and deception continue to surface.

 

Russian-linked Flamingo Made False Claims

In a 22-page emergency cease-and-desist order, the state securities boards in the five states alleged that Flamingo Casino Club lied about the true nature of its business by falsely claiming that it was working with legitimate companies. Authorities looking into the virtual casino’s operations have also traced its roots back to Moscow.

Flamingo promised NFT holders a list of attractive perks, such as exclusive access to poker tournaments, sports events, and virtual concerts, as well as a 50% share of casino profits as passive income. NFTs are digital assets that exist on a blockchain representing ownership of unique items including art, music, collectibles, real estate and many others.

To draw more customers, the casino also offered extravagant items like iPhones and Teslas as lottery prizes.

Flamingo also allegedly tried to lure investors by marketing itself as a legitimate business affiliated with the popular Flamingo Las Vegas Hotel & Casino. But all of these are just a front, as the casino is being run by fraudsters from Russia, according to the investigators.

Flamingo Barred from Selling NFTs

Flamingo’s non-disclosure of revenue, assets and liabilities, and other financial data relating to its operations is a deliberate move to try to conceal its unscrupulous activities.

While the NFTs that the casino is selling are regulated under securities laws, the company must be flagged for intentionally failing to provide customers relevant information including its physical location, contact numbers and, key details regarding its leadership team, the order said. The casino is now prohibited from selling its NFTs as investigations continue.

Carolyn Dutton

Carolyn is our legislation expert, with a background in law she is able to cover the current state of gambling around the world

Share
Published by
Carolyn Dutton

Recent Posts

LV Sands, Concerned About Online Competition Amid Plan to Build $6bn Casino

Summary: Las Vegas Sands chairman and CEO Rob Goldstein is concerned about the impact of…

2 months ago

Biloxi Casino Plans Advance as MGC Considers Two Venues

Summary: Tullis Gardens Hotel and the Tivoli development are in the works. The casinos would…

2 months ago

Rio Hotel & Casino Finishes Phase One of Massive Property Renovation Project

Summary: Rio Hotel & Casino has completed phase one of its multi-year property-wide renovation project.…

3 months ago

Industry Heavyweight Execs Talk Tech Future at TribalNet Conference & Tradeshow

Summary: Monday’s TribalNet Conference & Tradeshow brought together gaming industry executives who discussed the future…

3 months ago

Nevada Regulators Propose Solution for Armed Casino Security Shortage

Summary: The Nevada Gaming Control Board addressed the shortage of armed casino security following the…

3 months ago

Venetian Waiting for Final Approval for $550m Dividend Distribution

Summary: The Venetian in Las Vegas is getting ready for a massive dividend distribution. The…

5 months ago