The Boys’ Club

Proposed regulations to codify sexual harassment and workplace discrimination in Nevada don’t go far enough, says former gaming regulator Richard Schuetz (l.). He claims the proposed regulations have been “weakened” from an earlier draft that was written by former Gaming Control Board Chairwoman Becky Harris.

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The Boys’ Club

I have had jobs in my life I did not like, but I cannot imagine what it must be like to go to work with an underlying fear I might be sexually molested or harassed by the person who I depended upon for my job. Moreover, I also cannot imagine being placed in the position of having been sexually molested or harassed and then needing to return to that workplace in order to continue to support my family.

There is nothing in my life that has prepared me to understand what that fear and potential trauma would be like. It just seems unbelievable. Yet, in January 2018, the Wall Street Journal began publishing a series of articles suggesting there were a number of women who claimed they were placed in this position, and they were placed in this position by arguably the most powerful person in casino gambling, Mr. Stephen Wynn. Moreover, the story has evolved to suggest Mr. Wynn was surrounded by lawyers and executives who actively worked to intimidate these claimed victims from seeking anything resembling justice and to keep this whole story under wraps, away from public knowledge and, more importantly, away from a regulatory agency continually insisting it is the “gold standard” of the industry.

There are a number of facts surrounding this story giving it texture and a degree of credibility, and none is more relevant to me than that Mr. Wynn left the building and left the building in a hurry. I have written on this topic previously and if one-half of the accusations are accurate, I can only conclude Mr. Wynn is a very sick person and the industry is blessed to have him gone. For the enablers around him, I have much less sympathy. They cannot claim some deeply seated mental dysfunction, but rather they have to contend with their own cowardice and greed. That is a hell of a legacy.

An individual cannot enter the political and regulatory environment in Nevada without learning it is seemingly a state law that he or she utter the term “gold standard” once every few days. These utterances become something of a mantra, and it appears to be driven by a belief that a term repeated often enough will become a reality, as if saying it makes it real.

In the Wall Street Journal story, it mentions a deposition from the 1990s involving the well-respected casino executive Dennis Gomes who had been working for Mr. Wynn. He testified then that there were regular complaints of sexual harassment against Mr. Wynn, and Mr. Gomes stated he was also requested to secure the phone numbers of cocktails waitresses for Mr. Wynn. Again, this was in the early 1990s. Moreover, the WSJ story identifies claimed incidents continuing well into the 21st century. It seems Mr. Wynn may have had a waiver from that world-famous gold standard of regulatory attention.

Becky Harris was appointed as chairwoman of the Nevada Gaming Control Board in January 2018. The board was formed in 1955 and is comprised of three members. From 1955 to 2018 there were 186 board-member years. Of those 186 board-member years there was one woman appointed to the board and she stayed for one year and eight months. That means that prior to the appointment of Chairwoman Harris, women had comprised less than 1 percent of the board-years of the NGCB. It was undeniably a good old boys’ club and one could hardly expect them to do anything about boys being boys.

When Becky Harris was appointed chairwoman, her on-the-job training became accelerated with the Wynn story being blasted around the world and it appears she decided to lead on this issue from the front by moving to develop a regulatory response that would address the issue of sexual harassment in the casino workplace. While the board has a huge amount of discretion to look into essentially anything involving a licensee, it appears Chairwoman Harris wanted to emphasize that sexual harassment was clearly unacceptable, and by March 2018 the board was focused on putting pen to paper, so to speak, by developing draft language to meet this goal.

The enthusiasm by the Nevada Gaming Commission to Control Board Chairwoman Harris’ efforts was less than robust. Commission Chairman Tony Alamo gave every indication of not being interested in doing anything with the drafting efforts of the board and basically did nothing. He made noises to the press that this topic should not be addressed until the Wynn circus had left town but has apparently changed his tune, for the commission recently passed a regulation that touched upon sexual harassment, and the Wynn circus is still clearly traveling about the state.

But it was more than Alamo’s attitude that changed. So too, the regulation had changed, for in January 2019 Chairwoman Harris was replaced by a new chairwoman named Sandra Morgan. Under Chairwoman Morgan’s leadership the draft regulation was submitted. Inspecting the two draft regulations side by side, it is safe to conclude that the newer version has been diluted and there has been a clear weakening of the requirements to address sexual harassment.

One can only speculate why the chairs Morgan and Alamo wanted this weakening. It has always been my observation that the regulation of gaming rarely includes people who have actually worked in the industry, the result being that many regulators have little idea as to the reality of what they are regulating (think of a person regulating doctors who has never been trained in or practiced medicine). They then need to depend on the industry in the drafting of regulations, and I doubt many of the men leaders in the industry came to the regulators and said “we really have a problem in that we are guilty at times of sexual harassment and need you to come get us under control.”

I also do not believe that many women wanted to contribute in the public meetings that sexual harassment was a problem in the workplace, and they needed protections. That may not be the best way for them to move up in organizations that are essentially always run by men. It is this reality I believe that Becky Harris understood. There are times where a true leader knows what to do and cannot rely on a process that is structurally doomed to fail.

Gaming regulatory agencies are monopolies and one of the first things that one learns in economics is that monopolies are slow to change and offer poor service levels. It takes true leadership to counteract the tendencies of monopolies and I wonder if Nevada has what it takes in the new era of the “Me Too” Movement and an enhanced appreciation that sexual harassment is a real thing in American business—and is really a real thing in the casino industry.

There is also an argument suggesting that specifically targeting sexual harassment is not staying within the lanes of the regulatory remit. In the early 1960s blacks were not allowed in Las Vegas Strip casinos. It was the chairman of the NGCB, Ed Olsen, working with the support of Governor Grant Sawyer, who took action to help change this by deputizing two black schoolteachers as board agents and having them enter casinos. When they were walked out the licensees were informed they were in violation of their licenses in that they barred duly authorized representatives of the NGCB from accessing the casino. I am sure many had wished Chairman Olsen should have stayed in his lane in this instance, but he certainly did not, and the industry began to walk away from another ugly vestige of its past. This is real gold standard stuff.

Unlike most high-ranking regulators, I do understand what it is like to work inside of a casino. I started working in casinos at night in the early 1970s to pay for my education, and I have been in and around them ever since. From this experience, I have some definite opinions on this subject and allow me to mansplain them to you all.

I believe Becky Harris was absolutely right in there being a need for a clear and concise regulatory effort to address sexual harassment. Moreover, there also needs to be a whistleblower mechanism that people can use when complaining within their work environment is considered uncomfortable or untenable. It is also important the whistleblower has the right to select the sex of the responding agent. This whistleblower program needs to be detailed in the casino’s employee orientation package and be posted in areas where employees can be notified of its existence. Lastly, the regulatory package needs to clearly articulate that any lawyer that works to structure transactions so as to hide them from the regulatory authorities, or any manager or executive who works to enable or ignore inappropriate behavior with the organization has a very poor future in the industry. The industry needs these people to become an endangered species.

Contrary to the current attitude of the regulatory authorities in Nevada, I would guess that there are some women in Nevada who might think an aggressively robust program designed to curb sexual harassment in the casino environment is a good idea. I would guess some of them may even be in the Nevada legislature, especially since the majority of Nevada legislators are women. If the leadership of the state of Nevada does not learn from the embarrassing and humiliating lessons they were force-fed about their largest industry by the Wall Street Journal, they are fools.   Maybe the legislature of the state can help the regulators understand there is more to that gold standard thing than just talking about it, and if the regulators do not get this, I would hope the legislature will help them understand.

There is an old proverb of: “Fool me once, shame on you; fool me twice, shame on me.” I would hope that Chairs Morgan and Alamo now understand that they own the next revelation within the Nevada casino industry of employees being sexually abused, and that many women within the industry may now feel that no one has their back.

Articles by Author: Richard Schuetz

Richard Schuetz started dealing blackjack for Bill Harrah 47 years ago, and has traveled the world as a casino executive, educator and regulator. He is sincerely appreciative of the help he received from his friends and colleagues throughout the gaming world in developing this article, understanding that any and all errors are his own.