Dotty’s fallout may cost Gaming Commission chairman his position

Slot machine arcades masquerading as taverns were handed a death sentence last week by the Clark County Commission.

The contentious and heated battle the past six months between commissioners, gaming regulators, the casino industry, tavern owners and slot machine route operators in the run-up to Tuesday's five-hour public hearing may result in one additional casualty.

Nevada Gaming Commission Chairman Peter Bernhard may have lost his chance at reappointment to the part-time but influential regulatory post he has held since 2001.

A month ago, Bernhard's reappointment was a foregone conclusion. The Las Vegas attorney said he wanted to be reappointed. He is deeply respected by the legal community, gaming leaders and outside industry observers.

That support diminished in recent weeks.

Casino representatives are furious that Bernhard didn't step aside when the gaming commission licensed three new Dotty's Gaming & Spirits locations last month. If Bernhard had not participated, the vote would have been 2-2 and the licenses would not have been granted.

Chris Kaempfer, senior partner of the Kaempfer Crowell law firm, represented Dotty's in front of the Clark County Commission. The panel voted 5-2 to change the ordinance that governs the operation of slot machines inside taverns, extinguishing the controversial Dotty's business model.

The firm lists Bernhard as being of counsel.

Before the March 24 gaming commission vote, Bernhard read a long explanation about why he believed he could participate in the Dotty's discussion. That reasoning infuriated and confused gaming industry insiders.

Gov. Brian Sandoval has until the end of the month to select a gaming commission chairman. Bernhard's term expires April 30.

"If this was anybody other than Pete, we would be in the governor's office right now calling for his head," said one gaming official. "That's what makes this even more perplexing."

On the law firm's website, the introduction recalls "a 30-year story of family and friendship" from when Kaempfer and Bernhard met as judicial law clerks and went on to successful legal careers. "Chris and Pete are working together again, this time at Kaempfer Crowell."

Before the March 24 commission meeting, Bernhard asked the Nevada Resort Association -- which was leading the fight against Dotty's -- if it would waive him from having any apparent conflict of interest. Gaming attorney Bob Faiss, representing the casino group, rejected the request.

"If you have to ask, then there already is a problem," said one casino insider.

At the gaming commission meeting, Bernhard said he discussed his status at the law firm with both the attorney general's office and informally with others who have "knowledge of these types of issues" for additional guidance.

Bernhard said he didn't have a "pecuniary interest in the work of the firm" nor did he have access to any of the Dotty's background materials. He said he couldn't use a simple or an uncertain conflict as a reason to withdraw from the matter.

"In my view, the reasonable judgment of a person in my position would not be affected by the fact that I happen to have office space in a firm that I'm of counsel," Bernhard said.

He'll probably have to spell out his reasoning in more detail when he meets with Sandoval to discuss reappointment. The Dotty's issue is clearly the only blemish on Bernhard's spotless record.

A spokesman for Sandoval said that as of last week, the governor had not scheduled interviews for the gaming commission chairmanship.

Ironically, Bernhard replaced Sandoval as chairman of the gaming commission in 2001. Sandoval decided to run for attorney general and Bernhard, chairman of the state Ethics Commission, was named by Gov. Kenny Guinn to fill out the remainder of the term. Bernhard was reappointed by Guinn in 2003 and Gov. Jim Gibbons gave him another four-year term in 2007.

There are many factors weighing into the appointment. An attorney has always headed the regulatory panel. Gibbons named the five current gaming commission members and Sandoval may want to start remaking the panel with his own selection.

Opposition might soften and Bernhard's credentials could save his seat.

Howard Stutz's Inside Gaming column appears Sundays. He can be reached at hstutz@reviewjournal.com or 702-477-3871. He blogs at lvrj.com/blogs/stutz.