Owner of Tropicana is, in fact, being investigated

Undercover probe is under way of operations in Las Vegas, Laughlin

Fri, Feb 8, 2008 (2 a.m.)

Sun File Photo

Criticism by the Culinary Union forced the Nevada Gaming Control Board to acknowledge it is investigating the owner of the Las Vegas Tropicana.

The Nevada Gaming Control Board has boxed itself into a corner.

Like some other enforcement agencies, the board sometimes confirms an investigation is under way, but won’t comment on its substance.

Such silence exposes the board to criticism — including from the Culinary Union, which has attacked regulators for condoning business practices it opposed — such as when Station Casinos required workers to reapply for their jobs after purchasing the first Fiesta casino in 2000.

The board broke its own silence rule Jan. 31 when Gaming Control Board Chairman Dennis Neilander told reporters the board’s audit, enforcement and corporate securities divisions had been investigating Columbia Sussex, which owns the Tropicana on the Strip and five other Nevada casinos.

Neilander said he “had some concerns” about gaming operations at the company’s Las Vegas and Laughlin properties and was using undercover enforcement agents to conduct a probe. The board had interviewed regulators and others in New Jersey — where the company was recently denied a gaming license, forcing it to sell its Tropicana casino there — and is set to interview top executives.

Why did regulators discuss their probe of Columbia Sussex?

Neilander said his hand was forced after Culinary Union statements, published in a Sun column, complained that regulators were doing little about a company that had broken the law in another state.

Many investigative agencies — think FBI, for instance — would remain silent in the face of criticism. But Neilander might have been embarrassed by the union’s incorrect implication that he and his staff were sitting on their hands.

By disclosing but a few details, Neilander revealed that regulators are, in fact, doing their job.

Even after letting the cat out of the bag, the Gaming Control Board won’t speculate what will come of its investigation of the owner of the Tropicana.

Understanding the board’s mandate offers some guide.

The board is primarily concerned with keeping corrupt and fraudulent influences out of casinos, making sure games are run fairly and ensuring that appropriate taxes are paid. But there’s plenty of room for management missteps, layoffs and shabby hotels — three of the many claims made by Tropicana critics that are commonly found in the gaming business — because those issues are not specifically addressed in state law.

New Jersey regulators denied the company a license based on, among other things, evidence that the company lied to regulators about layoffs and delays in implementing a compliance committee. Industry experts speaking anonymously in Las Vegas say these misdeeds may be bad but put Nevada regulators in the uncomfortable position of punishing an already financially troubled company based on subjective reasoning.

As far as reasons for denying a license, being uncooperative with regulators isn’t as compelling as failing to maintain an adequate bankroll or allowing minors to play slot machines, for example.

Nevada law allows the board to levy fines or revoke licenses if companies “reflect discredit” on the state, but the board has been reluctant to do either over the years.

(In one rare example, the board fined the former owner of the Imperial Palace $1.5 million — the second-largest gaming fine in Nevada’s history — for holding theme parties celebrating Adolf Hitler’s birthday.

Regulators also are wary of putting properties out of business and workers out on the street — and have intervened to help prevent that.

By way of example: Financially troubled Binion’s was racking up IRS liens and facing other regulatory problems when the Gaming Control Board, concerned about the potential loss of more than 900 jobs, helped engineer a three-way deal passing the casino into corporate hands.

On paper, Columbia Sussex is already violating Nevada’s “foreign gaming” statute, which requires that casino operators follow rules and regulations in other regions. The rule calls for regulators to investigate the substance of these misdeeds but doesn’t trigger an automatic penalty in Nevada.

The board isn’t required to file a complaint against Columbia Sussex, and complaints are what trigger public hearings. Lesser problems can, and have been, settled out of the public eye.

And that’s how the investigation into Columbia Sussex might have ended — quietly and privately — were it not for the Culinary forcing the issue. For its efforts, and because Neilander broke policy and publicly acknowledged the investigation, a public hearing at which complaints against Columbia Sussex would be bared now seems more likely.

Discussion: 6 comments so far…

By DonnyC

2/8/08 at 5:17 p.m.

Suggest removal

Why don't you try reading the Nevada statutes sometime? If you did, you'd see there are many other reasons -- not mentioned in your article -- for requlators to take disciplinary action against the Trop.

To be qualified for a gaming license in Nevada, you are required to be a "person of good character, honesty and integrity." [NRS 463.170]. The New Jersey Gaming Commission basically accused Trop execs of perjury. Doesn't that raise a question of whether Yung and the Trop are still qualified?

In addition, a licensee also is required to have "adequate business probity, competence and experience, in gaming..." [NRS 463.170] For a company teetering on the edge of bankruptcy, and widely viewed by most in the industry as running the Trop in Vegas and AC into the ground, there are real questions here as well.

Your argument seems to be because the Nevada regulators rarely ever take displinary actions against a licensee, there are no (or little) grounds to do so. But if you read the statute, you'd see that regulators have wide latitude. They choose not to take action because of they are politically controlled by the industry.

But to write that article, the chief apologist for the industry and regulators would bite the hand that feeds...
By charlotte

2/8/08 at 7:08 p.m.

Suggest removal

My wedding plans were canceled by the Tropicana without recompense for an in house event two weeks before the event. I am still waiting to see what the Tropicana does. After reading the Wall Street Journal and now the front page of the Sun, I at least know part of the reason. Will I have to sue to get compensation? I don't know, but it isn't a good way to get referrals or more people to stay. It also made my life a mess. Anyone have any suggestions? }:>)
By charlotte

2/8/08 at 7:09 p.m.

Suggest removal

My wedding plans were cancelled by the Tropicana without recompense for an in house event two weeks before the event. I am still waiting to see what the Tropicana does. After readint the Wall Street Journal and now the front page of the Sun, I at least know part of the reason. Will I have to sue to get compensation? I don't know, but it isn't a good way to get referrals or more people to stay. It also made my life a mess. Anyone have any suggestions? }:>)
By terjen

2/9/08 at 7:14 a.m.

Suggest removal

So now Nevada has probable cause, if the statutes are right the Nevada has sufficient evidence, the final question is...Does Nevada have the political will to move forward with the hearings on the suitability of the Columbis Sussex license? It will require every worker that has been "harmed" to file complaints with the US Dept of Labor, the State and local politicians to insure there is enough pressure for the process to move forward. Without the personal filed complaints from the employee's, the authorities can not proceed.
By TropWorker

2/9/08 at 5:29 p.m.

Suggest removal

Every tip-earner at the Trop has a "bogus" W-2! Line #7 ; Social Security Tip Wages is blank!! All of those tip earners have to submit their W-2 to payroll, have those complaints referred to Kentucky, where they are incompetent, and then wait for the government to re-issue those W-2's. All of them have to wait 30+ days for the correct W-2's. They have to wait for their refunds. Is Columbia going to give them interest accrued on their money that they are holding on to???? NO!!!! They will keep the interest for themselves! What a company! Worst employers in the USA. Their are multiple violations of employees having child support deducted from their checks, and not forwarded to their children, as well as employees on disability whose insurance payments are not being made!!! Keep denying Hud!! Are you so afraid of your job you will say ANYTHING Bill Yung tells you to say, or are you a REAL MAN and tell the truth???? We can always know the the "Tiffany of the Strip" is now the "Hooker Haven" of the strip!! We have "whore wars" almost daily. Not to mention the pimps recruiting guests to be hookers. Those reports mysteriously disappear! Not hotel security mistake, goes higher than that ( Kentucky Kid!) Go back to Kentucky & let us longtime Vegans take care of our precious city!!
By beezlebop

4/15/08 at 12:57 a.m.

Suggest removal

Why are the people who rely on these companies for a living treat their employers as the enemy, getting such pleasure from their pain? Do you think this helps their own individual and their families situation? What are they gaining? If you're represented by a union, then why not take some pride and live with your own personal integrity as your guide. Why not just do your job as it's been negotiated for you, and focus your energies on bettering your family's future through proactivity, on or off the job, whatever makes you happy. Nobody owes anyone a living, and your membership says that you agree to what your negotiators are able to obtain for you. That's what adults do. "Sticking a thumbtack on the teachers chair" at every opportunity is just a waste of everyones time and only shrinks the proverbial pie of your entitlement.Unless you just need someone to blame for your failures, a bad guy to pin the tragedy of your unrealized potential, unfulfilled dreams. I can understand that, that's human nature. The lawyers love you more and more at every action, as they bring out the knife, slicing off more of that coveted pie and stuffing in it in their fat little piggy faces.