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Arnold M. Knightly

Planet Hollywood nightclubs denied liquor licenses

24 July 2009

LAS VEGAS, Nevada –- The Privé nightclub was denied a liquor license and ordered to cease operations by midnight Tuesday for failing "to abide by the duties of a liquor licensee," the county's Business License Department announced Thursday just hours after Planet Hollywood Resort paid a $500,000 fine for not properly overseeing activities at the nightclub.

Privé's ultralounge, the Living Room, which is owned by the same company as the nightclub, also was denied a liquor license and ordered to cease all business operations by midnight July 30.

The nightclub and lounge had been operating under temporary licenses while the Metropolitan Police Department investigated their suitability for licenses after being cited by the county for a series of code violations.

"The evidence of improper management oversight and disregard for the duties of the licensee is overwhelming and points to only one decision: denial of a liquor license," Clark County Business License Director Jacqueline Holloway said Thursday. "We expect consistent compliance and cooperation from our privileged licensees for the benefit of our citizens."

The county, which announced the license rejections in a news release, said county regulations require liquor licensees to "strictly enforce" county and state laws that ban "any lewd activity, nudity or topless activity (as well as) disorder, disturbances, or other activities, which endanger the health or safety of the patrons."

The county noted that Privé and the Living Room had been cited for three violations by the Business License Department, including instances where security managers either stalled or interfered with routine and compliance inspections at the clubs.

Compliance inspections include ensuring that patrons are being properly carded at the front door and ensuring that employees have work and alcohol awareness cards.

Privé was cited for allowing topless and lewd activity to take place on site.

Privé and the Living Room are owned and operated by the Opium Group, a Miami Beach, Fla.-based nightclub owner.

The Opium Group has 30 days to appeal the license decision to the Clark County Commission, but its clubs will have to remain closed during the appeal process.

The owners would have to file by the middle of next week to make the county commission's Aug. 4 agenda, county Director of Public Communications Erik Pappa said.

Calls and e-mails to the Opium Group were not returned.

Planet Hollywood Resort did not return phone calls or e-mails seeking comment on whether it plans to continue its relationship with the Opium Group. The county announced its decision shortly after Planet Hollywood Resort was before the Nevada Gaming Commission and paid a $500,000 fine "for failing to maintain sufficient control over" Privé, which leases the space from the resort.

Nevada Deputy Attorney General John Michela, whose office brought the complaint against the hotel-casino, told the Gaming Commission that the resort's failure to maintain oversight of the nightclub "led to numerous incidents, which reflect or tend to reflect poorly on the reputation of gaming" in Nevada and that could deter the future development of the gaming industry.

The Gaming Commission on Thursday commended the resort for steps it has taken since regulators began their investigation. The Gaming Control Board on July 9 announced the hotel-casino had accepted responsibility for allowing illegal and improper activities to take place at the club.

The agreement includes a provision that could result in an additional $250,000 fine if a similar complaint is filed against the hotel-casino before July 31, 2011.

Planet Hollywood had renegotiated its lease with the nightclub to allow hotel-casino personnel to enter the nightclub without having to be escorted by Privé's security, as was the case before.

Attorney Frank Schreck, who represents the resort, said the new lease gave the hotel-casino authority to terminate the nightclub's lease if there were similar problems.

Gaming Commission members, who would not comment after the county's decision was announced, said at their meeting earlier Thursday that nightclubs such as Privé are a "good thing for Las Vegas" when properly supervised.

"They create a vitalized energy, a young adult theme for Las Vegas and Nevada, and they're just a good thing," Gaming Commissioner Tony Alamo said. "Where it went sideways is when the health and safety of the patrons was being sacrificed."

According to the attorney general's complaint, the Clark County Fire Department responded to 61 calls at the hotel-casino in the 12 months prior to the club's opening. The number of responses jumped to 104 in the eight months after the club opened.

Las Vegas police also experienced an increase in calls after the club opened.

The fine against Planet Hollywood came after gaming regulators had expressed concerns about illegal activities, such as minors being allowed in and being served alcohol, at many of the nightclubs and topless pools at the Strip resorts.

Gaming Control Board member Randall Sayre has acknowledged that as many as nine other clubs, ultralounges and topless swimming pools are being investigated for possible regulatory violations.

And on Tuesday, the control board sent all gaming licensees a letter warning that regulators have concerns about a number of other issues that could lead to disciplinary action against casinos if they fail to take corrective actions.

Sayre's letter proposed regulators and gaming licensees meet in a series of workshops to discuss and clarify some of those issues.

Operators and spokespeople for the other high-profile Strip nightclubs were unavailable or did not have any comments on Thursday's events.

Spokespersons for Tao at The Venetian and for the N9NE group, which operates clubs at The Palms, declined comment. Pure Management Group, which operates Pure at Caesars Palace and LAX at Luxor did not return calls seeking comment.

Pure was the subject of an Internal Revenue Service investigation last year; no resulting action has been made public.

News of the Privé action came as other clubs planned their usual summer activities, and the effects on them remain to be seen. N9NE Group had previously advertised a Kandy Vegas weekend at The Palms today through Sunday. A promotional release touts "a series of decadent events," with women "encouraged to dress in their most delicious Kandy-style lingerie."

A representative of Kirvin-Doak, the public relations firm that sent the release, noted "there are liberties taken with promotional writing."