Nevada’s reputation on the line

Nevada gaming regulators claim to have stepped up their scrutiny of Columbia Sussex’s Tropicana and the company’s five other Nevada casinos. In a Feb. 1 Review-Journal article, Gaming Control Board Chairman Dennis Neilander refused to discuss specifics about the investigations or indicate when they may wrap up. The board claims to have begun looking into the company’s suitability at least as early as last summer.

It is appalling that Nevada gaming regulators have moved at such a glacial pace and provided so little detail about their investigations. Not only have there been customer and employee complaints about security levels at the Las Vegas Tropicana, the New Jersey Casino Control Commission stripped the company of its license to operate the Atlantic City Tropicana last December because of the company’s failure to demonstrate the “business ability,” “financial responsibility” and “good character, honesty and integrity” to operate a casino in New Jersey.

The overall question in Nevada is whether the company is suitable to hold a casino license based on its track record here and around the country. Under Nevada’s gaming laws, licensees in this state cannot knowingly violate foreign, federal, tribal, state, county or city laws in the conduct of their out-of-state gaming operations. They also cannot conduct those operations in a manner inconsistent with Nevada’s standards of honesty and integrity or engage in an activity that is unsuitable for a licensee because it reflects discredit upon Nevada or is contrary to the policy of this state concerning gaming.

New Jersey regulators yanked the company’s license after determining the company “either did not understand New Jersey’s law and regulations or did not want to understand them.” The commission also levied the highest fine in its history as a result of the company’s failure to establish a statutorily required independent audit committee.

New Jersey regulators found witnesses evasive in licensing hearings and evidence of perjury. The New Jersey Casino Control Commission ultimately concluded the company’s security director Glenn Koehler actually lied in his testimony before the commission regarding a report he prepared on Atlantic City Tropicana security staffing levels and his contact with company principals.

Mr. Koehler oversees the functioning of the security departments at all of Columbia Sussex’s casinos, except for the Atlantic City property, and the daily security operations at the company’s two Tahoe casinos.

The New Jersey commission’s acting director of Gaming Enforcement Yvonne G. Maher, who led the state’s investigation, did not mince words in her assessment of the company’s attitude toward regulators. “To put it lightly, there seems to be a lack of concern about staying compliant with various jurisdictions’ gaming regulations if not an outright willful disregard for regulators,” she testified.

Some have speculated that Nevada gaming regulators have a higher burden than those in New Jersey to meet when it comes to revoking licenses. The law, however, is crystal clear. A gaming license in Nevada is a privilege regulators can revoke at any time for any cause they deem reasonable.

Nevada’s gaming regulators have broad authority and powers to monitor the ongoing conduct of casino licensees to ensure no unqualified, disqualified or unsuitable person is involved in the state’s gaming industry.

The slow pace and near silence of Nevada gaming regulators on the New Jersey decision, Columbia Sussex’s repeated run-ins with state gaming regulators and the company’s operating practices here in Nevada are alarming. Nevada gaming regulators need to carefully consider their role and not abdicate their responsibility to uphold the state’s gaming laws. Casino companies are free to make bad business decisions and suffer the consequences. They should not be free to flout gaming laws.

Clearly, Nevada’s reputation as a leader in the gaming industry when it comes to regulation is on the line.

D. Taylor is secretary-treasurer of the Culinary Workers Union Local 226, which is locked in a labor dispute with the Tropicana.