Nevada Gaming Commission Chairman Pete Bernhard is universally considered one of the best attorneys in the state.
But on one of the most controversial matters to come before the regulatory panel in years, it took a physician to diagnose and devise a treatment for the problem.
The 4-1 commission vote last week amended State Gaming Regulation 3.015, adding a new definition for taverns while listing criteria needed for a business to operate up to 15 slot machines.
In reality, the vote was all about killing off the Dotty’s Gaming & Spirits business model. The company, which has developed more than 60 locations since 1995, was accused of operating slot machine parlors masquerading as taverns.
Bernhard was the lone vote against the changes, making impassioned arguments that the regulation wasn’t broken. The majority favored new rules suggested by panelist Tony Alamo Jr., a Henderson doctor whose father is a retired Strip casino executive.
Time will tell whether Bernhard’s assessment, that the commission used a sledgehammer to kill ants, will be shared by judges who might overturn the decision.
Dotty’s, which filed a federal lawsuit against Clark County when the county commission passed stringent changes in its tavern ordinance in April, will look at legal remedies.
Bernhard, who has been commission chairman since 2001 and who was appointed in April to a new four-year term by Gov. Brian Sandoval, took steps to protect the commission against a potential lawsuit.
He spent several minutes toward the end of Thursday’s seven-hour hearing to clear up “housekeeping matters.” He placed into the record transcripts from numerous public meetings and listed the opportunities Dotty’s proponents had to voice their opposition to the regulation changes.
He knew he was going to be on the losing end of the vote, but Bernhard showed his responsibility to the public as well as his legal acumen.
“I think these are important issues from a business perspective and a lot of businesspeople looked at this as their lifeblood,” Bernhard said following the hearing. “They are really concerned about their future. It’s important as we consider all these activities.”
Thursday’s debate, often contentious and vitriolic, was an open window into the minutiae of the gaming regulatory process. Alamo’s revisions, crafted with the help of the attorney general’s office, took into account proposals from the Nevada Resort Association, the Nevada Tavern Operators Association and the Gaming Control Board.
The hearing included a lengthy and heated legal debate between Bernhard and resort association attorney Todd Bice. Last month, Bernhard eviscerated Station Casinos Executive Vice President Scott Nielson during a public hearing when the gaming official said the company wanted Dotty’s out because of competition.
Bice was ready for Bernhard. He argued the commission allowed Dotty’s “to get through the fence of regulation” starting in 1995. Dotty’s also spawned knockoffs, such as Jackpot Joanies and Molly’s and Miz Lola’s, which copied the business model.
The resort association wanted it stopped.
“It’s time to fix the fence,” Bice said.
Yes, big gaming, i.e., the resort association, got what it wanted; an end to the Dotty’s business model for new restricted locations and an order that gives Dotty’s operators two years to make retroactive changes to their places.
Only Bernhard and the resort association folks know whether there is any bad blood remaining between the parties. In April, the resort association suggested Bernhard shouldn’t take part in the regulation 3.015 debate because the law firm where he is of counsel represented Dotty’s in front of Clark County. Bernhard’s feelings were clearly hurt by the suggestion.
When he realized the final decision was inevitable, Bernhard offered to back a proposal offered by the control board, which was scaled down from Alamo’s. He was hoping for a 5-0 vote that might fend off future legal action.
However, Alamo said the control board’s proposal didn’t meet his goal of eliminating the Dotty’s business model.
Even though he expressed concern that the new rules could discourage economic growth, Bernhard said the commission would press ahead.
“All we can do is go forward with our best judgment,” he said.
Howard Stutz’s Inside Gaming column appears Sundays. He can be reached at email@example.com or 702-477-3871. He blogs at lvrj.com/blogs/stutz. Follow @howardstutz on Twitter.