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Best of Howard Stutz

Gaming Guru

Howard Stutz

Nevada regulators approve more stringent oversight for casino nightclub operations

20 November 2015

The Nevada Gaming Commission will require casino operators to take more stringent approach in monitoring their nightclub venues, hoping to avoid regulatory complaints that often led to six- and seven-figure fines for allowing illicit activity inside the venues.

Among the changes, the casinos will have to designate an employee to oversee and monitor the nightclubs and that person will have to be licensed under state gaming regulations as a key employee. In addition, promoters and independent hosts for the nightclubs will have to file written agreements and register with the Gaming Control Board.

The changes came about after several informal meetings between the Control Board and casino industry representatives, and two formal public workshops.

"Everyone now knows what the guidelines are," said Gaming Commission member Randolph Townsend.

Under the regulations, the required reporting of criminal violations was expanded, unsuitable methods of operation were described and annual reporting requirements were set.

Gaming Commission Chairman Tony Alamo Jr., said the nightclub venues have been good for the gaming industry, providing an economic "shot in the arm." However, the clubs needed to be controlled and regulated.

"I've been part of some venues with very difficult complaints," Alamo said.

Planet Hollywood paid a $750,000 fine in 2009 after admitting that resort officials were lax in policing illegal activity inside the now closed Privé nightclub.

The Palms paid a $1 million fine in 2013 for a failure to prevent illegal activity, including drug sales and prostitution, at clubs on the property.

Mandalay Bay paid a $500,000 fine in 2014 amid accusations that employees at an upscale lounge there provided prostitutes and drugs to undercover officers.

"I believe these regulations changes do what we set out to do," Alamo said.

The Gaming Commission also approved regulation changes in two other areas.

Regulations were altered in areas of associated gaming equipment, including various casino monitoring systems.

Also, the Gaming Commission approved regulations allowing business entities to place race and sports wagers. The new law came out of the passage of Senate Bill 443 this year and allows investors to join business entities and share the profits and losses from large wagers at Nevada sports books.

The entity wagering regulation was backed by sports book operator CG Technology, which lobbied lawmakers and worked with gaming regulators on the language.

The regulation allows Nevada-based business entities to apply for registration for the purpose of betting on sports and racing. The regulation also legalizes sports betting investment funds, similar to traditional investment mutual funds, that are registered and managed in Nevada but could include participants from outside the state.
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