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Six questions for Mark Clayton, Nevada gaming attorney

LAS VEGAS, Nevada -- With a wide-ranging career as a corporate attorney, Nevada gaming regulator and gaming attorney in private practice, Mark Clayton has an industry perspective few can match. Clayton joined Lionel Sawyer & Collins in January after four years as a member of the Gaming Control Board.

What's interesting about an esoteric niche like gaming law?

New legal questions come up all the time. A lot of gaming law isn't written but based on what regulators did in the past. Until the Boyd School of Law began their program, you learned on the job.

How has the recession changed the perspective of regulators and casinos?

You'll see more testing of assumptions. Leverage is fine — it's whether you can generate enough cash to service the debt. What happens if you miss your target by 10 or 20 percent? The experts had reasonable expectations but extremes weren't tested.

What concerns you, going forward?

Operators want to go after the high end, which is easy to say but hard to do. The luxury end has grown so much, with more competition to come. Some companies have realized there might not be enough of that business to make a profit.

Did regulators fail to protect the state from false assumptions?

As long as your projections are reasonable, success or failure should rest on your shoulders. Regulators shouldn't second-guess the business judgment of applicants. Conventional wisdom said that Steve Wynn could not have made money at Mirage and Sheldon Adelson could not have made money with a convention hotel — though regulators should push back when assumptions are out of whack.

Have your views changed now that companies bought with private equity money are on the verge of bankruptcy?

The final chapter hasn't been written. Some shareholders benefited, while those casinos will continue to compete for business. Enabling investment by private equity as well as foreign government-owned corporations like Dubai World has brought new capital to a capital-intensive business. We have evolved from the days when only private individuals could own casinos.

What does the future hold?

I think the U.S. economy will recover before Las Vegas as consumers wait for their investments to rebound. Casinos are good long-term investments for those who pay a reasonable price. Las Vegas is a unique destination that will always attract investment.

Copyright © Las Vegas Sun. Inc. Republished with permission.

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