Gaming regulators express concerns about how casinos are operating

Two weeks after fining a Strip casino for not controlling illegal activity inside a nightclub on its property, state gaming regulators let gaming licensees know they have other concerns about how casinos are operating.

In a letter to casino licensees that was posted on the Gaming Control Board's Web site, regulators Tuesday proposed holding a series of seminars to discuss regulatory issues that, if left unchecked, could lead to disciplinary action against the casinos.

"It's an invitation to open up some dialogue," said state Gaming Control Board member Randall Sayre, who authored the letter. "It's appropriate that there is some avenue for not just us to dictate what we see as trends, but for the industry to come forward and say, 'Hey, maybe you guys should interpret this for us so we know what we're dealing with.' "

The letter notes that, while casino companies are focused on addressing regulators' concerns about operations at nightclubs, ultralounges and topless swimming pools operating on their properties, "there are other areas where regulatory concerns have surfaced."

"Either through lack of knowledge or apathy, licensees are creating regulatory challenges in areas requiring corrective action in other areas beyond nightclubs," the letter said.

Sayre's letter specifically lists how casinos conduct promotions, tournaments and contests, race and sports book operations, intellectual property theft and questionable and misleading advertising as areas of concern for regulators.

Sayre said the list was "purposefully general," in hopes that casino licensees might come forward with other areas of concern they would like to discuss.

"There are often times interpretation issues that clearly some open dialogue would help," Sayre said. "I thought it would be healthy to do something like this if the industry had an interest."

The letter comes nearly two weeks after Planet Hollywood Resort agreed to pay a $750,000 fine to Nevada casino regulators for not properly overseeing operations at the resort's PrivŽé nightclub, which is owned and operated by an outside company.

A hearing is scheduled Thursday before the state Gaming Commission on the nine-count complaint filed July 9 against the resort.

State gaming regulators said after the fine was announced that gaming Control Board agents, with the help of the Metropolitan Police Department, could be investigating as many as nine hotel-casinos about activities inside their nightclubs, which could lead to more six-figure fines and other punishments.

State gaming regulators have levied fines against casino operators for activities outside the casino.

The most prominent case was the $100,000 fine the Hard Rock Hotel paid in 2004 for using sexually suggestive advertising that was not properly reviewed by the property before distribution.

The original complaint included counts that said the ads reflected poorly on the gaming industry and Nevada, but those were dismissed by the commission

The proposed workshops would be for operators "at ground level who deal with issues on a daily basis," Sayre said, not policy makers and lawyers hoping to make decisions on statutes and regulations.

"I felt it appropriate that the whole industry didn't get focused on just one area," Sayre said. "There were some other areas that clearly both the regulatory system and the industry could benefit from some open dialogue."

MGM Mirage spokeswoman Yvette Monet said the company, which owns nine casinos on the Strip, gives "high priority" to compliance issues raised by regulators in all areas and expects the "highest levels of compliance" from various business partners.

"We value the guidance the (gaming control) board has given to date," Monet said. "We look forward to continuing these discussions. We are also in close communication with our nightclub operators and event planners on an ongoing basis to discuss operational aspects and the board's concerns."

David G. Schwartz, director of the University of Nevada, Las Vegas' Gaming Research Center, said the letter is in keeping with the board's history of trying to safeguard the industry's reputation.

"All of these things are a potential headline in a bad way," Schwartz said. "This is a good approach, that it shows they are willing to work with the industry. They're not just running around handing out fines because somebody has violated the letter of the law in a very small way. They see potential problems, and they're trying to address it now."

Contact reporter Arnold M. Knightly at aknightly@reviewjournal.com or 702-477-3893.