High-roller salons OK’d by regulators

David Strow

Friday, Jan. 25, 2002 | 11:07 a.m.

For the first time in more than 70 years, Nevada's casinos will soon be able to offer gambling to elite high-rollers in rooms completely inaccessible to the public.

But the criteria to qualify for this treatment has fallen considerably from what was discussed last year.

By a 4-1 vote, the Nevada Gaming Commission on Thursday approved a regulation authorizing the state's casinos to set up "international gaming salons." Unlike all other gaming areas in Nevada, these salons will be closed to all but qualified high-rollers and their guests.

In Nevada, gambling has always been conducted in public to help prevent illegal or unethical behavior, and to assure the casino's gaming winnings are accurately reported to the state. In the private salons, casinos will have to allow state Gaming Control Board agents admittance at all times, inform the board each day the salon is opened and closed, and use thorough camera surveillance to cover every inch of the salon.

Casino executives called it a measure that would not only help attract new high-rollers to Nevada casinos, but also lure back players who were shunning Las Vegas in favor of private gambling parlors introduced in Australian casinos. More than one executive pointed to the 80 percent plunge in baccarat win in November as evidence of this trend.

"What's more important than creating new revenues is the retention of revenues," Tony Alamo, senior vice president at Mandalay Resort Group, said.

In the United States, private salons are currently available at Foxwoods in Connecticut and Pala Casino near San Diego.

The Control Board had proposed setting the minimum requirement for entrance into a private gaming salon at $1 million in cash or credit. After months of lobbying by the Nevada Resort Association and casino executives, commissioners voted to cut this limit to $500,000.

Other notable changes were made as well. The board had proposed capping the number of guests a high-roller could bring into the salon at six; the final regulation has no maximum. The board had also suggested the guests would have to stop gambling in the private salon if the high-roller left for more than an hour, but the commission voted to remove this time limit as well.

Industry executives said they would hardly be making the salons less exclusive by cutting the limit to $500,000 -- and they'd be able to net more high-end customers.

"If we turn away just one player that's willing to lose $500,000 or more, it's a mistake," Alamo said. "We shouldn't do that."

The turning point in convincing commissioners to vote for a lower limit was data presented by Central Credit LLC, a casino credit research agency. Of the millions of names in Central Credit's database, less than 0.002 percent -- about one out of every 50,000 -- had credit lines exceeding $500,000, said Central Credit President Pamela Shinkle.

Shinkle said more than half of the customers in the database had never even gambled in a Las Vegas casino, suggesting the state could make significant inroads in the high-end market.

It was enough to sway all of the commissioners except one. Commissioner Sue Wagner, who pressed for a $1 million minimum credit line throughout the hearing, was the sole no vote.

Wagner, a former state lawmaker, said she was unconvinced the state's legislators had private salons in mind that would allow admittance to gamblers with a credit line of just $500,000. She pointed to testimony made before the Legislature last year, in which industry representatives said only 100 or 200 gamblers in the world would qualify for private salons -- and that baccarat betting limits would be set in the range of $100,000 a hand.

The final regulation, by comparison, set the minimum bet in a private salon at $500 a hand.

The reason Wagner was so adamant about the distinction, she said, was the new regulation marked the first time Nevada gambling would ever be conducted in private. She expressed concern the regulation could be "the toe in the door, the camel's nose in the tent" toward pushing more gambling into areas off-limits to the general public.

Although the regulation went into effect Thursday, don't expect to see private salons introduced in time for Chinese New Year's -- a traditional high water mark for high-end play -- in mid-February.

Casinos must apply for licenses to operate private gaming salons, and it will likely take several months for those licenses to be issued, Control Board Chairman Dennis Neilander said.