Planet Hollywood has agreed to pay a $750,000 fine to Nevada gaming regulators, admitting that resort officials were lax in policing illegal activity inside the Privé nightclub.
The Gaming Control Board has told the resort industry that properties need to control actions inside the nightclubs that traditionally lease space in casinos and are operated independently.
Planet Hollywood is the first hotel-casino to acknowledge it was at fault for the problems inside a nightclub that it doesn't own.
"We didn't execute proper supervision and we're the message being sent to the rest of the industry," gaming attorney Frank Schreck, who represents Planet Hollywood, said Friday.
Gaming authorities could be investigating as many as nine hotel-casinos about activities inside their nightclubs, which could lead to six-figure fines and other punishments.
Schreck, who represents several hotel-casinos and gaming companies, said he has advised clients they need to pay attention to what is happening inside their nightclubs.
"It can't be ignored. The situation needs to be addressed," Schreck said.
In April, the Gaming Control Board posted a stern letter of warning on its Web site, saying disciplinary action was being considered because of problems not only inside the nightclubs, but also at the properties' ultra lounges and topless swimming pools.
The agency sent a similar warning letter in 2006. Gaming Control Board member Randy Sayre thought another missive was needed this year.
"I'm not going to write any more letters," Sayre said Friday. "Having said that, I can indicate with great confidence that a few locations may not have gotten the message loudly and clearly. And these situations will be addressed."
Sayre confirmed several hotel-casinos are under investigation by gaming authorities about activities inside their nightclubs and other venues.
"Some are more serious than others and we need to address whether or not these venues are conducting themselves under state and local ordinances," Sayre said.
In an agreement with the Gaming Control Board that settled a nine-count complaint, Planet Hollywood agreed to pay $500,000 up front and another $250,000 in a year if changes are not made in the operation of the nightclub.
If no additional complaints are filed over the next 12 months, the $250,000 payment will be waived.
The Nevada Gaming Commission will vote on the settlement when it meets in Las Vegas on July 23.
"Planet Hollywood took this matter seriously," Sayre said. "Sadly, they should have addressed some of these events sooner."
The nine counts ranged from Privé employees removing drunk customers and dumping them in the casino unattended, or telling hotel security to remove them, to customers having to be hospitalized for drinking too much.
Privé employees and patrons were charged with physically and sexually assaulting customers.
The club reportedly admitted minors, who were then served alcohol.
Another count involved a Clark County Department of Business License citation for allowing topless and lewd activity. Privé reportedly failed to cooperate with the county.
Another count was based on the large increase in phone calls to emergency medical personnel and police since the club opened. The control board charged that prostitution increased around the club and the club did nothing to discourage the activity. Privé also hired people with criminal records.
Planet Hollywood admitted to all the allegations and admitted it didn't maintain enough control.
Schreck said that aspect will change. He said the lease between Planet Hollywood and Privé has been rewritten. Planet Hollywood security officers, who formerly weren't allowed to enter the club without a club employee, can now enter the club.
Also, Planet Hollywood can terminate the club's lease if any of the conduct outlined in the nine counts continues.
"We've taken some pretty draconian steps to assert control," Schreck said.
"Planet Hollywood wants to be a good corporate citizen and licensee. We stepped up to the plate and took responsibilities for the actions."
Privé is operated by the Opium Group, a Miami-based nightclub company. A spokeswoman for Opium Group did not respond to phone calls or an e-mail message Friday.
Contact reporter Howard Stutz at email@example.com or 702-477-3871.