Hard Rock agrees to pay $100,000 fine in ad dispute

Wednesday, Oct. 27, 2004 | 11:12 a.m.

CARSON CITY -- While admitting no wrongdoing, the Hard Rock hotel and casino in Las Vegas has agreed to pay a $100,000 fine to settle a complaint by the state Gaming Control Board over its advertising policies.

The control board originally filed a three-count complaint against the resort involving its racy advertising campaign. The state Gaming Commission in September dismissed two of the complaints.

The hotel and the board then negotiated a settlement on the remaining count that accused the resort of reneging on an agreement Hard Rock had with regulators about review of all of the hotel's promotional materials by a compliance committee.

The Monday settlement was signed by Hard Rock President and Chief Operating Officer Kevin Kelley, the three members of the control board and Senior Deputy Attorney General Toni Cowan. It will be presented to the Nevada Gaming Commission at its Nov. 18 meeting for approval.

The board in January this year filed a three-count complaint against the Hard Rock accusing of it failing to conduct advertising "with decency, dignity, good taste, honesty and inoffensiveness." As an example, the Hard Rock published an advertisement showing a woman and a man naked on their upper bodies with the female lying on a gaming table with cards and chips around her and a card in her mouth. The caption said, "There's always a temptation to cheat."

Another advertisement featured a man in an undershirt next to a truck with the caption that read "At the Hard Rock Hotel, we believe in your Monday night rights: Large quantities of prescription stimulants, having wives in two states, the Big Score football on Monday nights, football, beer, girls and oversized parking. Tell your wives you are going, if they are hot, bring them along."

The commission in September dismissed those two counts saying the advertisements were satirical in nature and did not condone illegal activity.

The third count referred to a previous complaint against the Hard Rock in which the casinos allowed people in so-called "private" booths to engage in inappropriate sexual conduct that was visible to the public. The casino paid a $100,000 fine in 1992 and promised to police promotional events more closely.

In its new complaint, the board said the casino violated the 2002 agreement that a compliance committee or compliance officer would review all promotional events.

Hard Rock, in the settlement signed Tuesday, said it believed the compliance review applied only to in-house promotions and not public advertisement. But it said the board could present evidence to support the argument that all advertisements must go through a compliance committee.

As part of the settlement, the board and the casino agree that the compliance committee is advisory in nature and makes recommendations. The management of the Hard Rock has "full responsibility" for all advertisement. But the management should consider any recommendations by the compliance committee that meets quarterly.

The board and the Hard Rock said the settlement shall not "be construed as any precedent for the validity or invalidity of any legal position taken in this matter by either party." It said the settlement is between the board and the Hard Rock and no other casino may rely on it for precedent.

Hard Rock representatives could not be reached for comment.