Regulators recommend Nazarian for one-year limited license

SBE Entertainment CEO Sam Nazarian, the visionary behind the SLS Las Vegas, nearly found himself on the outside looking in at the Strip resort Wednesday.

Nazarian, 39, was recommended for a one-year, limited license by the Gaming Control Board following a more-than-3½-hour public hearing in Carson City that included testimony over drug use earlier this year and his dealings with an extortion suspect who cost him $3 million.

The Nevada Gaming Commission will make a final ruling on the recommendation on Dec. 18.

Nazarian’s Los Angeles-based nightlife and hospitality company owns 10 percent of the hotel-casino, formerly known as the Sahara. San Francisco-based Stockbridge Real Estate owns 90 percent of the property and Terry Fancher, the company’s executive managing director, serves as SLS’ chief executive.

Nazarian has been credited as the driving force behind the $415 million renovation project that revitalized the 1,620-room hotel-casino on the Strip’s north end.

The ruling doesn’t change the property’s ownership or management structure.

The Control Board’s 2-to-1 vote for the limited license came with six conditions, including one barring Nazarian from involvement with the resort’s casino operation and one requiring him to submit to random drug testing.

The recommendation for the limited license came after regulators said they would not vote to give Nazarian a full gaming license that would let him dictate SLS Las Vegas’ operations. Board members also considered doing nothing with the application by referring the matter back to its staff.

“Mr. Nazarian is really the face of the property,” Control Board Chairman A.G. Burnett said. “Referring the matter back does nothing. I don’t want you to be a denied applicant.”

At the hearing’s outset, attorney Tony Cabot told the Control Board that Nazarian’s business dealings over the past two decades “were complex.” More than 24,000 pages of documents were electronically transmitted to investigators. Thousands of other documents were hand-delivered.

However, the bulk of the hearing revolved around the extortion suspect and Nazarian’s drug use.

At the hearing, Nazarian admitted he used cocaine during an April trip to Cabo San Lucas, Mexico, with several friends. He said it was a “one-time indiscretion” and that he hadn’t used drugs in several years. He admitted that he was evasive with gaming agents about the incident.

Control Board member Shawn Reid, who voted against the limited gaming license, said he was troubled that Nazarian’s drug use took place “in the middle of his license investigation.”

Board members said they were concerned how the businessman, whose empire includes some of Southern California’s most popular nightspots and a growing line of SLS hotels, dealt with Derrick Armstrong, a Los Angeles-based convicted felon.

Nazarian said he met Armstrong, an automobile detailer, in 1999. Over the years, Nazarian lent Armstrong money.

However, the relationship soured in 2005 and Nazarian cut ties with Armstrong. Over the next few years, Armstrong would surface, demanding money from Nazarian.

“He seemed to show up as my accomplishments grew,” Nazarian said.

Eventually, Nazarian asked SBE Entertainment executives to deal with Armstrong when he began threatening family members. Los Angeles-based attorney Joseph Taylor, who specializes in litigation and entertainment law, was hired to fight Armstrong’s requests. An injunction was filed against Armstrong and he legally can’t go near Nazarian.

“My city, it’s a city of barnacles and parasites, clingers and hangers-on,” Taylor told the Control Board on Wednesday when asked about Armstrong. “They are everywhere.”

SBE executive Randy Winograd told the Control Board he was charged with dealing with Armstrong. He made payment to him last year, hoping that would end the contact.

“This guy was making claims to embarrass Sam and the Nazarian family,” Winograd said. “I screwed up. I failed Sam badly.”

Nazarian took full responsibility for the dealings with Armstrong. Nazarian admitted paying to Israel-born mob figure Hai Waknine $83,000 and rap music mogul Marion “Suge” Knight $90,000 because of their connections to Armstrong.

“The buck stops with me,” Nazarian told the Control Board.

However, Reid said he worried that Nazarian could be “easily manipulated” and that he was trying to hide his dealings with Armstrong.

“You seemed more worried about PR than doing the right thing,” Reid said.

Burnett, who appeared to be the board member most disposed to saving Nazarian’s application, said he was disappointed that Nazarian didn’t go to law enforcement to deal with Armstrong.

“When you have a barnacle, you cut it off,” Burnett said.

Control Board member Terry Johnson supported the limited license, and also came up with several of the conditions, which included avoiding questionable associations.

“I was hoping for greater candor in your answers,” Johnson said. “I understand you’re a busy man and you have attorneys to handle all that. But I was a little taken aback by your answers. I can’t recommend an outright approval of the application at this time.”

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

ad-high_impact_4
Business
Bellagio, MGM Resorts International’s luxury hotel turns 20 – Tara Mack
The more than 3,000-room Bellagio hotel is situated on the site of the former Dunes Hotel. The Dunes was imploded in 1993, and construction of the Bellagio started in 1996. It cost $1.6 billion to build, making it the most expensive hotel in the world at the time. The Bellagio was former Wynn Resorts Ltd. Chairman and CEO Steve Wynn’s second major casino on the Strip after The Mirage. MGM Resorts International acquired the property from Steve Wynn in 2000. (Tara Mack/Las Vegas Review-Journal)
Facial recognition software at G2E – Todd Prince
Shing Tao, CEO of Las Vegas-based Remark Holdings, talks about his facial recognition product. (Todd Prince/Las Vegas Review-Journal)
Former NBA player, Shaquille O'Neal, speaks about his new Las Vegas chicken restaurant
Former NBA player, Shaquille O'Neal, speaks about his new Las Vegas chicken restaurant. Bizuayehu Tesfaye/Las Vegas Review-Journal @bizutesfaye
Bobby Baldwin to leave MGM
MGM Resorts International executive and professional poker player Bobby Baldwin is set to leave MGM.
Caesars has new armed emergency response teams
Caesars Entertainment Corp. has created armed emergency response teams. They are composed of former military and law enforcement officials. "These teams provide valuable additional security capabilities,” Caesars spokeswoman Jennifer Forkish said. Caesars is hiring Security Saturation Team supervisors, managers and officers, according to LinkedIn. The company did not say how many people it plans to hire for the units. (Las Vegas Review-Journal)
Las Vegas, airlines prepare for CES
CES in January is expected to attract more than 180,000 attendees. (Las Vegas Review-Journal)
AGS partners with Vegas Golden Knights
AGS is the nation’s second-largest manufacturer of Class II slot machines used primarily in tribal jurisdictions. It announced a marketing partnership with the Vegas Golden Knights NHL team. (Las Vegas Review-Journal)
Lehman Brothers bet big on Las Vegas
Lehman Brothers collapsed 10 years ago, helping send the country into the Great Recession.
Fremont9 opens downtown
Fremont9 apartment complex has opened in downtown Las Vegas. (Marcus Villagran/Las Vegas Review-Journal) @marcusvillagran
Ross & Snow launches in Las Vegas
Luxury shoe brand Ross & Snow has opened in Las Vegas, featuring "functional luxury" with premium shearling footwear. (Bailey Schulz/Las Vegas Review-Journal)
Remote Identification and Drones
DJI vice president of policy and public affairs discusses using remote identification on drones. (Bailey Schulz/Las Vegas Review-Journal)
Drones and public safety in Nevada
Two representatives in the drone industry discuss UAV's impact on public safety. (Bailey Schulz/Las Vegas Review-Journal)
Frontier Airlines to launch flights from Las Vegas to Mexico
Frontier, a Denver-based ultra-low-cost carrier, will become the first airline in more than a decade to offer international service to Canada and Mexico from Las Vegas when flights to Cancun and Los Cabos begin Dec. 15. (Rick Velotta/Las Vegas Review-Journal)
MGM Resorts International CEO Jim Murren addresses Oct. 1 lawsuits
MGM Resorts International Chairman and CEO Jim Murren addresses criticism his company has received for filing a lawsuit against the survivors of the Oct. 1 shooting. (K.M. Cannon/Las Vegas Review-Journal)
MGM Resorts International opens the doors on MGM Springfield
Massachusetts’ first hotel-casino opens in downtown Springfield. The $960 million MGM Springfield has 252 rooms and 125,000-square-feet of casino. (K.M. Cannon/Las Vegas Review-Journal)
MGM Resorts International prepares to open MGM Springfield
Las Vegas-based MGM Resorts International gave news media and invited guests a preview of the $960 million MGM Springfield casino in Massachusetts. The commonwealth's first resort casino will open Friday, Aug. 24. (K.M. Cannon/Las Vegas Review-Journal)
A Walk Through Circus Circus
It only takes a short walk through Circus Circus to realize it attracts a demographic like no other casino on the Strip: families with young children. (Todd Prince/Las Vegas Review-Journal)
Morphy Auctions, a vintage slot machines seller, wants gaming license
Vice president Don Grimmer talks about Morphy Auctions at the company's warehouse located at 4520 Arville Street in Las Vegas on Thursday, Aug. 16, 2018. (Rick Velotta/Las Vegas Review-Journal)
Nevada's venture capital money doesn't stay in state
Zach Miles, associate vice president for economic development for UNLV, said there’s venture money in Southern Nevada, “but trying to find the right groups to tap into for that money is different.” According to a 2017 report from the Kauffman Foundation, Las Vegas ranked number 34 out of 40 metropolitan areas for growth entrepreneurship, a metric of how much startups grow. With a lack of growing startups in Las Vegas, investment money is being sent outside of state borders. The southwest region of the U.S. received $386 million in funding in the second quarter, with about $25.2 million in Nevada. The San Francisco area alone received about $5.6 billion. (source: CB Insights)
Neon wraps can light up the night for advertising
Vinyl wrap company 5150 Wraps talks about neon wraps, a new technology that the company believes can boost advertising at night. (Marcus Villagran/Las Vegas Review-Journal) @brokejournalist
Nevada on the forefront of drone safety
Dr. Chris Walach, senior director of Nevada Institute for Autonomous Systems, talks to a reporter at NIAS's new Nevada Drone Center for Excellence of Public Safety, located inside the Switch Innevation Center in Las Vegas. K.M. Cannon Las Vegas Review-Journal @KMCannonPhoto
Motel 8 on south Strip will become site of hotel-casino
Israeli hoteliers Asher Gabay and Benny Zerah bought Motel 8 on the south Strip for $7.4 million, records show. They plan to bulldoze the property and build a hotel-casino. Motel 8 was built in the 1960s and used to be one of several roadside inns on what's now the south Strip. But it looks out of place today, dwarfed by the towering Mandalay Bay right across the street.
Project billed as one of the world's largest marijuana dispensaries plans to open Nov. 1
Planet 13 co-CEO Larry Scheffler talks about what to expect from the new marijuana dispensary, Thursday, July 19, 2018. (Marcus Villagran/Las Vegas Review-Journal) @brokejournalist
Oasis Biotech opens in Las Vegas
Brock Leach, chief operating officer of Oasis Biotech, discusses the new plant factory at its grand opening on July 18. (Bailey Schulz/Las Vegas Review-Journal)
UNLV Tech Park innovation building breaks ground
Construction on the first innovation building at the UNLV Tech Park is underway. (Bailey Schulz/Las Vegas Review-Journal)
TOP NEWS
News Headlines
Add Event
Home Front Page Footer Listing
Circular
You May Like

You May Like