Back in 1959, when Nevada launched a 20-year war to eradicate organized crime influence in the state’s casino industry, one of the most powerful weapons in its regulatory arsenal was the power to deny gaming licenses to individuals and entities.
As this has worked for better than half a century a denial meant “unsuitable,” and to be found unsuitable for licensing was?to borrow an expression from Mob lore?the “kiss of death” for anyone wanting to do business with the state’s casinos.
But no more. A bill passed this year by the Nevada legislature and signed into law by Governor Brian Sandoval dramatically softens the potential consequences for applicants who may fail to pass muster for any number of reasons.
It used to be that the three members of the Nevada Gaming Control Board, the enforcement arm of casino regulation, would either recommend approval, or a limited approval with conditions, or a denial. The final word was the Nevada Gaming Commission’s, but it had only three options: It could affirm the board’s recommendation, which almost always happened, or it could overturn it, which in the case of a denial required a unanimous vote of the five commissioners and almost never happened, or it could send the application back to the board for reconsideration.
The burden of proof of throughout this process was the applicant’s alone, so more often than not, if you suspected you were on shaky ground, you’d quickly move to withdraw your application because a finding of unsuitability not only cost you a license, it would prohibit you from doing business with any existing licensee?and it was all but certain to doom your chances of winning a license to do business in any other casino state.
Commission Chairman Tony Alamo has long believed the process is too inflexible, and like the bad guys it was meant to banish, should be a thing of the past. He has been pushing for reform.
“You know who we were trying to get out back then,” he recently told the Las Vegas Review-Journal. “So my whole point, which has been bothering me for 10 years, is that society has changed. The culture has changed.
This year he finally got through.
The law now offers a fourth option?“rejection”?a finding which holds back a license but without the fatal taint.
“A rejection of the application would not constitute a determination of the suitability of the applicant and it would not be considered a denial of the application,” explains the well-known gaming law firm of Greenberg Traurig.
It “provides the commission additional flexibility to halt an application from moving forward if, after consideration and hearing on the application, the commission determines that a denial of the application is too severe or otherwise inappropriate.”
So the consequences, too, will be vastly less severe. For whereas in the past a denied applicant was, in Greenberg Traurig’s words, “de facto barred in the Nevada gaming industry,” a rejected applicant will not necessarily be prohibited from business dealings with casinos or their vendors and suppliers.
It’s a huge difference, and one Alamo welcomes.
“Some people should not be in gaming,” he said, “but do you want the stigma of a denial to hang with you?
“It is simply another option, the key to which is not to be on that (denial) list.”
