The U.S. attorney's office said under the agreement, the operator of the Venetian and Palazzo resorts will pay the federal government the money within 10 days for failing to alert authorities the gambler, who was linked to international drug trafficking, had been making large and suspicious deposits with the company, WLAS-TV, Las Vegas, reported.
In return, federal prosecutors won't prosecute the company, which cooperated with the investigation.
"What happens in Vegas no longer stays in Vegas," U.S. Attorney Andre Birotte Jr. of the Central District of California said.
"For the first time, a casino has faced the very real possibility of a federal criminal case for failing to properly report suspicious funds received from a gambler. This is also the first time a casino has agreed to return those funds to the government.
"All companies, especially casinos, are now on notice that America's anti-money-laundering laws apply to all people and every corporation, even if that company risks losing its most profitable customer."
The gambler under scrutiny was identified as Zhenli Ye Gon, who in 2007 was "the largest all-cash, up-front gambler the Venetian-Palazzo had ever had to that point," the settlement agreement stated. In March 2007, authorities raided Ye Gon's Mexico City home and seized about $207 million, a record amount.
Ye Gon was indicted in the District of Columbia on federal narcotics charges, but that case was dismissed in 2009, WLAS-TV said. Ye Gon is facing extradition to Mexico, where he is charged with drug trafficking.
Las Vegas Sands officials had been unaware of Ye Gon's alleged criminal activities prior to March 2007 but conceded in hindsight there was reason to have been suspicious of his transactions.