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Gaming board must stay on its toes

It’s gut-check time for the Gaming Control Board.

The new year brings unprecedented investigative challenges to the doorstep of Nevada’s casino industry regulators. They have the unenviable – some would say impossible – task of keeping up with scandals on the Strip and potentially devastating investigations involving Nevada licensees in foreign jurisdictions.

With the state’s much-hyped reputation as the country’s oldest and best regulator of casinos at stake, the control board faces the likelihood of riding in the back seat while a variety of federal and private entities drive investigations of Nevada licensees in places such as Macau and the Philippines.

In Macau, the U.S. Department of Justice and Securities and Exchange Commission continue to investigate potential violations of criminal and civil law by Las Vegas Sands, whose casinos have set records in the Chinese special administrative region. And an official inquiry into possible violations of the Foreign Corrupt Practices act hasn’t hamstrung the company or resulted in a public hearing back in Nevada.

Then there are the troubling bribery allegations that have surfaced in the Philippines in connection with estranged Wynn Resorts board member Kazuo Okada’s attempt to secure casino approval there. Embroiled in a nasty battle with Wynn Resorts Chairman Steve Wynn, Okada now finds himself the subject of a criminal investigation that has the gaming world buzzing.

A recent article in the Manila Times indicated that our Gaming Control Board is conducting an audit of Okada’s corporate activity in an attempt to independently verify evidence of a bribe. Citing sources and company records, Reuters recently reported Okada’s Universal Entertainment has “funneled” at least $30 million to a former consultant to the Philippines gaming licensing authority.

Much of the most damaging material to surface against Okada has come from an investigative report sponsored by Wynn Resorts and conducted by former FBI Director Louis J. Freeh. The former director’s reputation is impeccable. Okada, it would appear, is in deep trouble.

What is our Gaming Control Board doing?

When I asked whether the state’s casino regulators were really auditing Okada’s company, Gaming Control Board Investigations Division Chief Mike LaBadie candidly admitted, “Not exactly.”

“We’re looking into it,” he said, “but as far as an audit, I don’t know if I’d call it that.”

LaBadie said the Freeh report was “helpful. There’s a ton of information in it,” which he assured was being independently verified.

“Yes, we are looking into it,” LaBadie said. “How we do it, we don’t go into all that.”

Closer to home, the December arrest by the FBI of CLS Transportation owner Charles Horky on racketeering and credit card fraud charges should have the bells ringing inside the control board. Horky’s limousine operation, which caters to Strip casino resorts, is accused of supplying drugs and prostitutes to customers.

The control board previously weighed in on the drug and prostitution activities at local resort pool parties. How can its investigators not pursue the troubling leads associated with Horky’s alleged activities on the Strip?

Horky is known in some circles as a substantial, if not very successful, high roller with no shortage of Las Vegas casino executives on his speed dial.

Local limousine companies commonly cut deals with Strip casino doormen to steer business their way. Did Horky use his high roller’s casino clout to muscle lucrative resort doors from competitors?

State investigators should ask gaming licensees and key employees about their relationship with Horky, the alleged purveyor of skinny girls and drugs to casino customers.

Surely the control board would never allow a licensed and publicly traded gaming corporation to handle such an inquiry in-house. That would be the height of irresponsibility.

The control board can’t allow it to happen, but when I inquired about the status of any such inquiry in the Horky affair, I was given a flat no comment. Who knows, perhaps we’ll all learn more when details of the federal investigation surface.

Between the scandals abroad and those at home, it would appear the Gaming Control Board’s investigative agenda is overflowing.

Is the state agency still capable of playing a leadership role?

John L. Smith’s column appears Sunday, Tuesday, Wednesday and Friday. Email him at Smith@reviewjournal.com or call 702-383-0295. He also blogs at lvrj.com/blogs/Smith.

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