Gaming board advises licensing for Las Vegas businessman

A long-time Las Vegas businessman has been recommended for licensure by the state Gaming Control Board after nearly being tripped up by conflicting state and federal laws related to the medical marijuana industry.

The board on Wednesday recommended approval of a license for James “Jay” Barrett as a director and audit committee chairman for Rancho Mesquite Casino Co., which operates the Eureka Casino in Mesquite and Eureka Las Vegas.

The Nevada Gaming Commission will consider final approval May 18.

The action raises questions about where regulators will draw a line between the marijuana and gaming industries.

Barrett, a financial planner who worked for Marnell Corrao and the Marnell Cos., was co-founder of the Rio and served as a Las Vegas Metro Chamber of Commerce officer. In a unanimous vote, he was found suitable for licensing along with Ernest Lee, a member of the family that owns and operates the Eureka properties.

But board members questioned Barrett about his consulting arrangement with a medical marijuana company.

The Control Board has been clear that it won’t allow gaming companies to be involved as owners, landlords or cultivators in medical or recreational marijuana operations. Barrett was the first licensing applicant to be questioned about a consulting role.

The use of marijuana for medicinal purposes is legal under Nevada law, and policymakers are in the process of enabling distribution for lawful recreational use. But the federal government still considers the possession and use of marijuana illegal.

Because of that federal stance, the Control Board has developed policy to keep gaming companies out of the marijuana industry.

When Barrett learned last week that his association with the company was problematic for the licensing, he immediately severed that relationship.

‘An evolving issue’

In his testimony Wednesday, Barrett did not disclose the name of the company he was consulting for, but he noted it was strictly financial consultation.

“It’s an evolving issue we continue to grapple with,” Board Chairman A.G. Burnett said in the hearing.

Board member Terry Johnson, who has taken the board lead on marijuana-related issues for the agency, said the board has taken a conservative approach.

Johnson said the board is more conservative than ever because of the position on marijuana use taken by U.S. Attorney General Jeff Sessions and the Trump administration. He said the board doesn’t want to have to explain a tie to the gaming industry if federal authorities crack down on money laundering associated with marijuana sales or use.

“We don’t want to be in a position to have to answer an inquiry about, ‘Where were you?’ Johnson said.

Scott Scherer of Holland & Hart, Barrett’s attorney and a former Gaming Control Board member, said the matter raises questions about how regulators will deal with marijuana use among casino employees as Nevada moves toward widespread legal recreational use.

At some point, he said, regulators might have to consider whether employees could lose gaming industry work permits if it’s discovered they’ve been using marijuana recreationally or medicinally.

Contact Richard N. Velotta at rvelotta@reviewjournal.com or 702-477-3893. Follow @RickVelotta on Twitter.