On Wednesday, regulators in five states issued emergency orders requiring a metaverse casino with alleged Russian ties to halt the sale of its non-fungible tokens (NFT), citing fraud, deception, and registration violations.
Alabama, New Jersey, Texas, Kentucky, and Wisconsin are the five states involved.
According to regulators, the Flamingo Casino Club began operations in Russia in March and has been soliciting investors through the sale of securitized NFTs.
According to regulators, the Flamingo Casino Club operators took steps to conceal their connection to Russia, including using a phony office address, providing a telephone number that is no longer in service, concealing its actual physical location, and concealing material about its principals.
According to a Texas State Securities Board order, the securitized NFTs give would-be investors partial ownership of the casino, a portion of the casino’s profits, and the ability to participate in lotteries offering Teslas, iPhones, and million-dollar cash prizes.
Potential investors were further enticed by what regulators say were fraudulent claims of affiliation with the Flamingo Las Vegas Hotel and Casino, a legitimate casino that has “no affiliation” or partnership with the Flamingo Casino Club, according to regulators.
The alleged scam operators promised investors that their money would be used to build a working casino and entertainment facility in the Sandbox metaverse. According to the orders, the plans included a virtual stadium for virtual games and concerts, a virtual hotel, a virtual movie theatre, a virtual bowling alley… [and] a virtual hockey team named ‘Flamingos.’
Avatars would allegedly be able to gamble in the metaverse casino, where they could play “craps, baccarat, mini-baccarat, blackjack, and roulette.”
The operators of Flamingo Casino Club told investors in April that they were in talks with rapper Snoop Dogg about purchasing a plot of land in the Sandbox metaverse – but regulators say there is no evidence of this ever happening.
The Flamingo Casino Club operators, according to regulators, failed to register the sale of their securitized NFTs with the securities boards and failed to respond to numerous inquiries.
