Regulators seek to revoke license of Henderson casino

John Wilen

Thursday, March 11, 1999 | 10:46 a.m.

Henderson's Alystra casino is in danger of losing its gaming license.

The casino, closed since last summer ostensibly for remodeling and expansion, is the target of a 13-count state Gaming Control Board complaint filed Wednesday. The state Gaming Commission could revoke the Alystra's license and fine its owners up to $1.3 million, though the actual penalty is likely to be far lower.

The Commission is expected to take a hard look at the Alystra's failure to pay monthly fees for its gaming license since December. Though not part of Wednesday's complaint, the failure to pay license fees is also grounds for license revocation, officials said.

The Board complaint alleges the Alystra has failed to re-open its doors one day a month to keep its gaming license intact, failed to maintain minimum internal control standards, failed to keep proper records and documents, failed to report significant loans to the Board, and bought gaming machines from a non-licensed manufacturer and then distributed those machines without Board permission.

"While the Alystra still holds this license, it is no longer in good standing by operation of law..." states the Board complaint.

Alystra officials could not be reached for comment.

According to the complaint, the Alystra received Board approval last June to close temporarily. But to keep its license intact, the casino was required to open to the public once a month.

The Alystra opened July 30, Aug. 30 and Sept. 29, but has not re-opened since, alleges the complaint. In October, the Alystra's owners made another request for temporary closure, which was granted by Board Chairman Steve DuCharme. But the casino has not reopened since Sept. 29, states the complaint.

"Accordingly, this regulation requires that the Alystra surrender their license to the Board within 10 days after closing their games or slot machines for a period exceeding one month," states the complaint.

Under state gaming laws, the Alystra should have surrendered its license by Jan. 7, states the complaint, but has still not done so.

In addition, said DuCharme, the Alystra has failed to pay gaming license fees since December.

"The fact that they're over 30 days tardy jeopardizes their license," said DuCharme.

The Board complaint also alleges:

Casino control and accounting problems at the Alystra, including insufficient controls over cash drop boxes and discrepancies between slot machine bill-in meter readings and currency acceptor drops.

Insufficient accounting records and documentation, and the failure to produce documents requested by Board agents.

At least six loan transactions that were not reported to the Board.

The purchase of 36 slot machines from Crapper Jacks, a Colorado company affiliated with the Alystra that is not licensed by the Board as a manufacturer or distributor.

The subsequent unauthorized distribution of 31 of the Crapper Jacks machines to casino patrons and other licensees.

The Board complaint asks for the Alystra's license, and a fine of $100,000 for each of the 13 violations alleged in the complaint. DuCharme said the actual financial penalty is likely to be far less. It will be based on the size of the property and the willfulness of the violations, he said.

But, at minimum, the Commission will most likely revoke the Alystra's gaming license, said DuCharme.

The Alystra, at 333 W. Sunset Road, has a 10,000-square-foot casino and no hotel. When it closed last summer, its owners announced plans to expand the casino to 47,000 square feet and build a 300-room hotel.

In October, General Manager Phil Rossi said owner John Connors and his brother Jimmy, the tennis star, had bought a 15-acre parcel next to the Alystra for the expansion. At that time, Rossi said construction financing was being arranged.

Rossi could not be reached for comment Wednesday.

According to Board records, Connors owns 77 percent of the Alystra. Gary G. Baldwin owns 13 percent and Larry O. Brockman 10 percent. The three owners could not be reached for comment.

In February, John Connors told the Belleville, Ill., News-Democrat newspaper that the Alystra would be expanded to 80,000 square feet and renamed the Islander.

Reports in the News-Democrat last year said Connors was facing a number of financial difficulties, including bank foreclosure on his home and his tennis club. In addition, the tennis club was being sued by vendors for past due bills, Connors was being sued by a St. Louis construction company for unpaid construction bills and he was being sued by a former business partner over a failed business deal.

According to a February News-Democrat report, Connors has signed a consent decree with the bank that owns mortgages on his home and with the construction company for the tennis club construction. Connors agreed to pay Magna Bank $3.8 million plus interest by May 4 for the house. The terms of the tennis club consent decree have not been disclosed.

Connors has also settled the suits filed by the vendors. The suit filed by Connors' business partner is still pending.

Connors told the News-Democrat he is negotiating with "major Wall Street money" for a $156 million loan to refinance the home and fitness club and pay for the Alystra expansion.

In Las Vegas, the Alystra had been sued by Wells Fargo bank for $147,000 in alleged overdrafts, and by Zurich American Insurance Group for $25,500 in unpaid bills.