Limitation Placed on Golden Nugget License

LAS VEGAS -- Concern about the relationship of strip-club owner Rick Rizzolo to prospective Golden Nugget buyers Tim Poster and Tom Breitling prompted the Gaming Control Board on Wednesday to tack a one-year limitation on the duo's license recommendation.

The three-member panel voted 3-0 to recommend approval of Poster Financial Group's $215 million purchase of the downtown and Laughlin Golden Nugget hotel-casinos, but not before subjecting Poster and Breitling to a 2 1/2-hour hearing that focused on their relationship with Rizzolo, owner of the Crazy Horse Too strip club.

The license limitation recommendation, if approved by the Nevada Gaming Commission at its Jan. 22 meeting, would require the Golden Nugget buyers to appear before regulators one year from now to prove that they are worthy of keeping a gaming license.

The commission can, if it chooses, eliminate the one-year limitation and grant the license outright.

Control Board member Bobby Siller said that Rizzolo is the subject of an ongoing FBI investigation and that several people Rizzolo employs and associates with have organized crime connections.

Siller brushed aside Poster's assertion that he and Rizzolo were social acquaintances who ate at the same restaurants and occasionally dined and gambled together, suggesting that Rizzolo or his associates were targeting the young millionaires, who reaped about $100 million from their 2000 sale of Travelscape.com.

Siller focused on Poster's admission that he had continued his social relationship with Rizzolo despite his lawyer's June recommendation that he sever all ties with the strip club owner.

"I'm very familiar with Mr. Rick Rizzolo," said Siller, a former FBI special agent in charge of the bureau's Las Vegas operations, who lectured Poster on the importance of steering clear of people with unsavory reputations. "People such as you, very successful, very young, are considered marks. People in organized crime try to set you up, to get some of your funds. And I think that's what they were trying to do with you."

Rizzolo did not return a phone message Wednesday, but Tony Sgro, his longtime lawyer, said the board's action was "a joke, absurd. It shows the lengths to which the government will reach, applying pressure socially to his friends."

Poster and Breitling both told the control board that they have cut all association with Rizzolo.

In a statement Poster read the board, he didn't mention Rizzolo by name when he outlined his relationship with the strip-club owner.

Using the term "the individual" to refer to Rizzolo, Poster told the panel that, as a former Station Casinos board member, he had been asked to bring some of Rizzolo's big-betting casino business to Green Valley Ranch.

After Poster finished his statement by saying he used poor judgment by continuing the relationship with "the individual," and that "the social relationship has ended," Siller got tough.

"You mentioned your name and your partner's name," Siller said. "Who is this individual?"

"Mr. Rick Rizzolo is the individual," Poster answered. "The reason I didn't mention his name is because I didn't think it was my place to put his name in the public record."

Siller scoffed and persisted.

"Why did you pick Rick Rizzolo for this social relationship?" he asked.

"He and I had some mutual friends, we frequented the same restaurants and we knew mutual people," Poster answered. "It wasn't a conscious decision (to socialize with Rizzolo and his entourage). It was something that just developed."

Poster and Breitling also admitted they had been patrons of Crazy Horse Too on a number of occasions, visits that prompted Siller to ask each whether they had done anything improper.

Poster and Breitling each said they had done nothing that would embarrass themselves or the state.

After the meeting, Poster said he was gratified with the board's vote and vowed that he had cut all ties to Rizzolo.

"The board has a very serious job to do and I respect that," he said.

Chairman Dennis Neilander said the one-year license limitation is not that unusual, particularly for operators without casino gaming experience, like Poster and Breitling.

"It's a tool we use when there are a couple of lingering questions," Neilander said. "Overall, these guys are a big plus, and a positive for downtown Las Vegas. They have no criminal record, they've got clean money, and they bring fresh energy and new ideas."

Former control board Chairman Steve DuCharme said a license limitation is a serious statement by the board.

"With a one-year limitation, that's sending a pretty strong message that there's been activity that displeased the board," said DuCharme, who didn't attend the meeting.