Nevada Regulators Demand Casinos Control Nightclub Activity

Planet Hollywood Casino, on the Las Vegas Strip, was fined $500,000 for violations of gaming regulations occurring inside the Prive nightclub, a step toward holding casinos responsible for tenant actions.

Nightclubs leasing space at Las Vegas casinos have come under increasing scrutiny in the last several years. Now a casino has been fined for the actions of a tenant nightclub, raising the bar of responsibility for casino operators regarding the use of their premises.

Planet Hollywood Resort and Casino was fined $500,000 by the Nevada Gaming Control Board for a series of problems stemming from Prive, a club which leases from the casino. Among the charges were that the club abandoned overserved customers in the casino, admitted minors, hired people with criminal records, assaulted customers, and turned a blind eye to prostitution and drug use.

Any of these activities in the casino would result in swift and harsh penalties by regulators, but casinos have insisted that strict gaming rules only apply to the gambling floor and do not extend to clubs that act as tenants. But accusations of ties to organized crime and money laundering have brought investigators pouring into clubs.

Planet Hollywood negotiated its settlement with the gaming board, but other casinos now are on notice, as investigations continue at several gambling venues. Regulators said Planet Hollywood accepted responsibility, but should have acted sooner, and effectively told the casino industry to raise its tenant standards, or else.

"We didn't execute proper supervision and we're the message being sent to the rest of the industry," Frank Schreck, Planet Hollywood's lawyer, told the Las Vegas Review-Journal.

Schreck told reporters that the club lease for Prive had been rewritten, allowing casino security the run of the club without a club employee chaperoning.