Casino sues Mesquite over denied expansion

David Strow

Tuesday, Aug. 31, 1999 | 11:16 a.m.

For nearly four years, Stateline Casino Inc. hasn't been able to convince the city of Mesquite to allow its expansion. Now, the hotel-casino is bringing the issue before a Clark County judge.

Stateline Casino Inc. argued in an Aug. 25 lawsuit that it was granted the right to have up to 75 slot machines by the county in 1983, prior to the incorporation of Mesquite. Mesquite refuses to allow more than 50 machines, a move the casino claims is costing it $125,000 to $500,000 in revenues each month.

The casino is asking the court to overturn Mesquite's decision, and to guarantee "equal protection and enforcement" of gaming regulations in the city.

In 1984, the casino was purchased by Warren Hopkins, who successfully applied for an unrestricted gaming license from the Nevada Gaming Control Board that year. One year before, Stateline received a Class C license from Clark County, a license that allows 75 machines and five table games.

Hopkins purchased the casino with the intent of expanding to 75 machines, according to an affidavit provided by Kristy League, general manager of the Stateline. The casino spent about $200,000 from 1986 to 1989 expanding its floor space and parking area to allow for the increased business.

In 1991, the City of Mesquite passed regulations that limited the scope of restricted gaming licenses to a maximum of 35 machines. In order to qualify for a nonrestricted license, a hotel-casino would have to have more than 100 rooms.

However, the city informed the casino that these new regulations would not apply to the Stateline, because the license had been granted prior to the new regulations. The letter referred to a maximum of 50 machines, but Stateline officials dismissed this as a clerical error.

Stateline attempted to expand in 1995, going from 50 to 60 machines. Soon after, City Manager Bill DaVee ordered the casino to remove the machines immediately or face legal action from the city council. Mesquite officials told the casino it has a Class B license, instead of the Class C license it claims.

"Apparently you have added 10 machines without any authority from the city or without any authority from the state," DaVee wrote. The casino removed the machines within days of receiving DaVee's letter.

Terrance P. Marren, city attorney for Mesquite, said the city has considered the Stateline a Class B licensee from the day of its incorporation. Even if Stateline held a Class C license in 1983, Marren said, Mesquite had the right to change the terms of that license after incorporation.

"We have a right to review what was in effect ... and to make judgments as to what the proper license should be," Marren said. "Our situation gave us that authority, and we assumed that authority correctly."

But the city has allowed similar expansions before, Stateline argues.

In 1996, the Mesquite City Council approved the license of the 19th Hole, and permitted it to operate up to 50 machines. The council said at the time that the 19th Hole had the right to operate that many machines because of grandfathered rights received from its Class B license.

But the city council ignored the fact that the 19th Hole's original license was granted in 1991, one year after new regulations took effect, Stateline argues.