Lawyer had hand in shaping Nevada’s casino licensing

Frank Schreck wasn't sure what to think.

His mentor and former high school teacher Mike O'Callaghan had just been elected governor. One of O'Callaghan's first appointments upon taking office in 1971 was to place Schreck on the Nevada Gaming Commission.

Schreck, who was 27 years old, left his law practice to assist in O'Callaghan's upset election.

"I was the young punk who was having fun on the campaign while leading school integration rallies," Schreck recalled. "Now I was going to the gaming commission. Mike was my hero. I would have done anything he asked."

At the time, Las Vegas Review-Journal columnist Don Digilio wrote that "maybe someday, young Schreck will be a good attorney."

It wasn't an inaccurate prediction.

After more than 40 years of practicing gaming law, Schreck's client roster reads like a state history book. Schreck, 67, represented individuals such as Steve Wynn, Carl Icahn, and Sumner Redstone; and companies such as Caesars Entertainment Corp., Wynn Resorts Ltd., MGM Resorts International, Penn National Gaming and Station Casinos.

Schreck is fond of saying that he helped the late Station Casinos patriarch Frank Fertitta Jr. get his first gaming license in the late 1970s.

Schreck oversaw the licensing process in 18 different states when private equity groups Apollo Management and TPG acquired Harrah's (now Caesars) Entertainment for $17.1 billion.

Schreck helped push through changes in Nevada gaming law in 2009 that increased the maximum stake that a passive institutional investor could own in a publicly traded gaming company without going through licensing. The figure went from 15 percent to 25 percent.

Three years ago, Schreck merged his 25-person law office with Brownstein Hyatt Farber, a Denver-based firm with offices across the Western United States and in Washington D.C. Schreck said he spurned buyout offers from other Arizona and California firms because the merger didn't seem to fit his business model.

"The size of the firm has allowed us to develop some practice areas we wouldn't have been able to do on our own," he said.

Schreck said he has no plans to retire. His corner office on the 16th floor of the Molasky Corporate Center has a view of downtown Las Vegas with the Strip in the background. It is adorned with career memorabilia, including photos of Schreck with former President Bill Clinton and current President Barack Obama.

His most cherished item is a signed copy of "Shannon Bybee: Evidence of a Serendipitous Career in Gaming," which is a collection of articles, speeches and presentations written by Schreck's late law partner and friend covering his own 33-year career in the gaming industry.

"Everybody tells me I should write a book, but I can't," Schreck said. "Much of what I know is privileged."

Question: How did you originally form your law practice?

Answer: I had spent four-and-a-half years on the gaming commission. It was a part-time job. Shannon Bybee was on the Gaming Control Board and he didn't want to be reappointed. I wanted to practice law with Shannon, so I resigned from the commission and we built the practice up. We went through several mergers and different attorneys came and went. We were getting a lot of clients.

Shannon started doing legal work for the Golden Nugget and he eventually went to New Jersey to run their operations there. I continued doing the legal work for Steve (Wynn). Shannon eventually moved on to other things. The firm continued to grow.

Question: What were reasons behind merging with a larger law firm?

Answer: Mergers were the big thing for a long period of time and we were approached by everybody who came to town. Our gaming practice made us the most attractive. The big Arizona firms all came to us first. But the bottom line was (that) from a corporate culture, none really seemed to fit. I had my three younger partners handle the negotiations because they were going to have to live with this longer than me. The merger didn't impact our gaming practice but it brought us a lot more real estate, corporate and commercial work.

Question: How has private equity investment changed the gaming industry?

Answer: Jack Godfrey (a former partner, now general counsel for Pinnacle Entertainment) and I created the gaming license structure for private equity groups to enter the casino business when Colony Capital first bought the Las Vegas Hilton. It never existed before. We were trying to figure out how to license funds with limited partners. We realized there was no reason to license them and we should just license the guys that run Colony Capital.

We were lucky to have a Gaming Control Board chairman like Bill Bible who understood that we needed to do innovative things.

Question: Was that model used for the Harrah's buyout?

Answer: I'm probably the only one you can say that has a multijurisdictional practice. I oversaw and coordinated the overview of the license applications in those states besides Nevada for the Harrah's deal. I hired lawyers in 18 jurisdictions. And, because I was a glutton for punishment, during that same time I agreed to represent Fortress Investment Group in its buyout of Penn National Gaming, which was in 26 or 27 jurisdictions. But the deal didn't go through because the stock price fell.

We did the private equity licensing deals when Oaktree bought Cannery Casinos, when Bay Harbor bought the Aladdin and we're handling the transaction right now for the Palms with TPG and Leonard Green.

Question: Because of your history, do you ever run into any conflict-of-interest issues?

Answer: I usually can get waivers from the parties. We don't get into the transactional side. We like to give gaming license applicants advice and counsel. We tell them how to structure the license application. That's what we provide.

Question: Do you have any memorable moments from your time on the gaming commission?

Answer: I think I made Frank "Lefty" Rosenthal famous. We were having public hearings on the race and sports book operations and all the usual suspects were there. Rosenthal was the manager of the Rose Bowl Sports Book and spoke at the hearing. What he had to offer was actually very educational. I thanked him and told him that he provided good information. At the next month's public hearing in Carson City, we couldn't pry the microphone out of his hands.

Contact reporter Howard Stutz at hstutz@reviewjournal.com or 702-477-3871.
Follow @howardstutz on Twitter.