Las Vegas Sun

April 19, 2014

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DAILY MEMO: FINES:

Next to gaming board, other enforcers look like pushovers

The recent fine levied against Planet Hollywood for nightclub violations was eye-popping — especially when compared with fines from other state regulatory agencies.

Gaming Control Board members hope the $500,000 Planet Hollywood fine will send a strong message up and down the Strip for casinos to exercise stronger control over their party venues, even those operated by outside vendors, board member Randall Sayre said.

That ambitious agenda — to enforce a fine large enough to send a message — is rarely pursued by other state agencies that regulate businesses.

The state labor commissioner, for example, rarely levies the maximum $5,000-per-worker fine — or any fine, for that matter — on casinos and other businesses found to have routinely paid workers less than they’re owed.

“Our goal is to get workers the money they’re owed,” Labor Commissioner Michael Tanchek said. “The real key is to get it so they’re not having problems in the first place.” Tanchek said businesses make honest mistakes.

The state’s Occupational Safety and Health Administration takes a similar approach to enforcement of workplace safety laws. The state emphasizes providing training and consultation to businesses, encouraging voluntary enforcement of laws rather than assigning hefty fines.

Average fines for serious violation of worker safety laws are just $1,407.47.

Two years ago two workers died and a third was seriously injured in a maintenance accident at the Orleans. The casino, owned by Boyd Gaming, had failed to fix the problems despite being warned of them. After negotiations, the company settled the case for $184,000.

Causing deaths of workers or underpaying them appears to create far fewer problems for casinos with state agencies than incidents that catch the attention of the Gaming Control Board.

Planet Hollywood’s $500,000 fine was for problems at its Prive nightclub, including underage drinking, leaving dangerously drunk patrons unattended, drug use, and physical and sexual assault of patrons by nightclub employees. The casino will have to pay an additional $250,000 after a follow-up investigation if the problems persist.

In agreeing to the settlement, the casino even accepted all blame for the violations the board alleged.

If it hadn’t approved the settlement, the board would have prosecuted the case before the Gaming Commission — a proposition the casino apparently found unnerving. “The board would pull out all of its resources,” Sayre said.

In comparison, companies found guilty of workplace safety violations that appeal OSHA findings to a review board nearly always win. An investigation last year by the Sun found that OSHA had failed to call any witnesses, other than the agency’s inspector, in review board cases.

Planet Hollywood’s fine is not even the largest by the Gaming Control Board. In 2003 MGM Mirage was fined $5 million for a problem with currency transaction reporting. In 1988 Imperial Palace was fined $1 million for building a private suite celebrating Hitler.

The Control Board has wide powers and is seen as a strong body because, unlike licenses for other business operations, a gaming license in Nevada is considered a privilege, not a right.

Tick Segerblom, an attorney involved in the Imperial Palace case (and current state assemblyman), said he often tries to get the Control Board to look more closely at issues related to casino employees because it has the ability to enforce the laws more strenuously than other state agencies when it does intervene.

The board typically declines to act when the case falls to another state agency — even when that agency has weaker enforcement practices. The board looked into the worker deaths at the Orleans but didn’t issue a complaint, said Jerry Markling, the chief of enforcement for the Control Board.

Some state regulatory agencies have learned that larger fines can help to spur compliance.

When the Endoscopy Center of Southern Nevada exposed 50,000 patients to hepatitis C by reusing syringes and medicine vials, the state Health Division fined the clinic a mere $3,000, but never collected it because the clinic shut down. Since then, the division has become more aggressive in enforcing health laws.

After the agency began charging clinics in violation a fine for each day a problem persists — and increasing publicity of enforcement actions — it has found that many more companies are self-reporting problems rather than risking investigation and consequences, said Health Division spokesman Ben Kieckhefer.

Sun reporter Marshall Allen contributed to this story.

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