- The City of Las Vegas has fined homeowner Xin Tao $180,000 for operating an illegal Airbnb.
- Tao had rented his home to Ryan Murphy, who said he told Tao about his Airbnb arbitrage business.
- Now Tao is suing Murphy and Airbnb for money to pay the fine plus damages. Murphy denies the claims.
The battle over a jaw-dropping fine on a Las Vegas Airbnb is heating up.
For two years, Xin Tao, an engineer based in Oregon, rented a Las Vegas house he had bought as an investment property to a tenant, Ryan Murphy. When Murphy moved out, Tao was hit with a $180,000 fine from the city for what it said was two years of illegal Airbnb operations. In a 2024 interview with BI, Tao accused Murphy of renting the home out on Airbnb without his permission.
Tao is now suing Murphy and the short-term rental giant for the full amount of the fine and additional damages.
Murphy said in a March 2025 interview with Business Insider that he told Tao about his Airbnb arbitrage business, which involves renting homes in Nevada and other states and then listing them on Airbnb.
“I had seven houses in Las Vegas at the time,” Murphy said. “Every single one of the landlords knew.”
Murphy has not replied in court and told BI that he does not plan to hire a lawyer for his defense. Tao and his lawyer, Andrew Bao, did not respond to calls and emails requesting comment.
The dispute between Tao and Murphy comes as cities across the US and Europe crack down on vacation rentals following a decade of growth. Both the city of Las Vegas and its regional authority, Clark County, instituted new rules in recent years that have saddled homeowners with fines from $55,000 to as high as $240,000, according to local news stations Fox5 and NBC3.
How strict cities choose to be, in both the number of rentals and where they are allowed, will partially determine the future landscape of the short-term rental industry.
The homeowner said he had no idea his house was on Airbnb, but his tenant said he was aware
Tao purchased the five-bedroom, two-bathroom property in June 2021 for $378,000, according to a listing history on Redfin. Because he lives full-time in Oregon, Tao told BI, he bought the house as an investment property.
Although the home is located in the quiet, palm-tree-lined streets of the Glen Heather Estates neighborhood, it’s only a six-minute drive from the bustling Las Vegas Strip, making it a prime location for visitors.
Tao began renting the property to Murphy in November 2021 and received a call from the city in December 2021 that the home was being used illegally as a short-term rental, Tao’s lawsuit against Murphy says.
Las Vegas keeps strict rules for short-term rentals, including a requirement that the homeowner stay on site with guests and secure a permit and that the property be at least 660 feet from another rental.
Multiple neighbors called the city with complaints about Tao’s home, according to code enforcement logs from the city of Las Vegas. Residents complained of an overflow of cars parked in the driveway and said that activity at the house “regularly disturbs” the neighborhood’s peace and quiet.
Tao’s lawsuit says he immediately contacted Murphy, who said it was a mistake and that he was in contact with Airbnb to resolve the situation.
Murphy told BI he wasn’t aware that there was a problem.
“I didn’t know that there’s any fines,” he said. “I didn’t know there were any issues whatsoever.”
The landlord wants his former tenant — and Airbnb — to pay the fine
Murphy told Business Insider that he ended his lease in 2023 when an issue with a toilet meant he couldn’t rent out the property for six weeks. He said Tao’s home was one of his lowest-performing properties and so he decided it wasn’t worth the headache.
According to Tao’s lawsuit, Murphy vacated the property in September of 2023 — and on October 5, 2023, Tao found a notice for a $180,000 fine taped to the door.
Tao told BI last year his reaction was dismay.
“I was shocked. I didn’t know what was going on. I thought it might be fraud,” Tao said.
Tao is now asking Murphy to pay the $180,000 fine and at least $15,000 in additional damages.
“I could care less,” Murphy said. “He’s not going to get a penny out of me no matter what he does.”
Tao is also seeking compensation from Airbnb. The suit claims that Tao contacted Airbnb in 2022 when he still believed the house was being accidentally listed on the site, and the vacation-rental giant declined to provide any information.
Tao’s lawsuit also says Airbnb enabled Murphy by not requiring proof that he was properly licensed to rent out the home. So Tao is seeking a portion of Airbnb’s profits.
Airbnb declined to comment on pending litigation.
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