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Wednesday, July 29, 2009 | 2 a.m.
Related Document
Sun Archives
- County rejects Prive's appeal for temporary license (7-28-2009)
- Big fine establishes hard line on nightclubs (7-27-2009)
- Liquor license rejections force Planet Hollywood clubs to close (7-23-2009)
- Next to gaming board, other enforcers look like pushovers (7-15-2009)
- Planet Hollywood to pay $750,000 fine over Prive (7-12-2009)
Sun Coverage
Beyond the Sun
Managing a Las Vegas nightclub requires the deft and daring skill of operating a party environment that almost crosses the line into illegal activity. Anything less would be considered too tame to generate a buzz.
Planet Hollywood knew its tenant, the Prive nightclub, was crossing the line but didn’t stop it, and gaming regulators pounced.
Last week Planet Hollywood agreed to pay a $500,000 fine to the Gaming Control Board after acknowledging it knew of illegal and illicit activities occurring at the club, which operates on the mezzanine level above the casino. On Thursday the county denied the club a permanent liquor license, forcing its closure at midnight Tuesday, when its temporary liquor license expired. The club opened less than two years ago.
As a result of the unprecedented enforcement action against Planet Hollywood for allowing a nightclub to run wild, contracts between hotels and their nightclubs are now being rewritten to give the hotels greater authority to lay down the law with nightclub managers.
The investigation of the pink-neon and black-lacquer Prive, which advertises a “South Beach” vibe, dates to last summer, when gaming regulators were sniffing into nightclub operations. Attention focused on Prive when investigators received a letter from a former Prive employee complaining about the use of marijuana and cocaine at the nightclub.
In the letter, the tipster also claimed to have witnessed club management sneaking underage girls into the club and management ordering employees to serve alcohol to underage girls.
Ronald Lyons, the club’s former head of security, says Prive management had a different standard for big spenders and regulars, who were allowed to do drugs in the club while others were removed from the venue.
In a letter that Lyons said he sent to authorities and that he copied to the Sun, he said he was told to allow regulars to use drugs “because they are spending a lot of money,” adding, “Whenever a cocktail waitress or security informed me of drug use and I had to tell them I was not kicking the patron out, it was a very difficult situation.”
Several former employees of the club, who spoke to the Sun on the condition of anonymity, say they witnessed many of the acts that turned up in the Gaming Control Board’s nine-count complaint against Planet Hollywood — including rampant drug use, prostitution and the dumping of intoxicated customers outside the club.
And former employees and others familiar with the club said a secluded area was outfitted with a stripper pole, where VIPs were entertained with women and drugs. They also say management allowed known pimps and drug dealers into the club — people whose services were used by club patrons.
A Metro Police spokesman said Tuesday that the department would not comment on any investigation it might have conducted into Prive until Aug. 4, when the County Commission is scheduled to hear the nightclub’s appeal of the loss of the liquor license.
The ex-employees say they were afraid to identify themselves to regulators or the public because they were threatened with lawsuits.
Indeed, Prive management last year sued Las Vegas entertainment blogger Michael Politz for libel for his unflattering stories about the club, including references to the former worker’s letter to the Gaming Control Board. Prive dropped the lawsuit after reaching a settlement with Politz that prevents him from writing about the club.
A spokeswoman for Opium Group, the Miami company that owns Prive, declined to comment on the specific allegations in the Gaming Control Board complaint and denied the allegations from former employees.
Prive has “zero tolerance toward drug use and prostitution, which is strictly enforced,” spokeswoman Vanessa Menkes said.
Allegations of underage drinking, drug use and prostitution are all part of the underground reputation of popular, big-city nightclubs — though former employees say Prive is unusual, even in the liberal nightclub world, because management cultivated such behavior.
Gaming regulators say other clubs are under investigation, and that action against Prive was taken because the investigation was quickly concluded.
Jerry Markling, the chief of enforcement for the Nevada Gaming Control Board, said other casinos have tightened their nightclub operations after being advised by the board of relatively minor infractions.
The volume and severity of violations at Prive justified the complaint against Planet Hollywood, said Randy Sayre, one of three members of the board.
Even though nightclubs, restaurants and other leased venues inside casinos don’t offer gambling, the Control Board has the authority to regulate activities there because of a broad mandate to enforce the legitimacy and reputation of the gaming industry.
Planet Hollywood, which received industrywide warning letters the board sent to Nevada casinos, had ample time and opportunity to tighten oversight but failed to do so, Sayre said. Only after receiving the specific complaint about Prive did the casino assert control over the club, he said.
At a Nevada Gaming Commission meeting Thursday to approve the fine against Planet Hollywood, none other than the casino’s gaming attorney, Frank Schreck, called the casino a “poster child” for lax oversight.
Las Vegas nightclub operators say nightly vigilance is needed to prevent illegal acts that might otherwise be inevitable. Rather than cracking down on illegal activity, Prive management condoned such actions, competitors say, and was known for “running a loose ship,” as another nightclub operator put it.
Some nightclub contracts call for a casino to sever a lease with a club that jeopardizes its gaming license, Markling said. Other contracts are silent or vague on that point — a sign, Markling says, that the properties don’t want to know about, or be liable for, the actions in their clubs. Planet Hollywood, he said, retained the right to oust Prive as a tenant but chose not to do so.
Many incidents in the complaint were noted by hotel security, which lacked the authority to police the club, Schreck told regulators last week.
The club’s lease, according to regulators, prevented hotel security from entering without an escort.
The property has reworked the lease to allow hotel security to enter the club at any time, Schreck said. Hotel security will train club security, which will adopt the hotel’s “standard operating procedures” on handling customers with sensitivity, he added.
The hotel has adopted the same approach with all of its leased venues, he said.
Planet Hollywood has given no indication it intends to boot Prive management. Instead, the club is filing an appeal with the county in the hopes of reopening soon.
This concerns some of the club’s owners, who say they were caught unawares by the complaint and believe a rewritten lease will do little to stamp out the illegal acts that occurred under the eyes of club managers.
But gaming regulators — accustomed to casinos that act quickly by firing or demoting employees who attract unwanted attention from the Gaming Control Board — think their actions are having the desired effect.
“There’s been a philosophical shift because we’re holding a landlord responsible for the actions of a tenant — something we hadn’t done before,” Gaming Commission member Dr. Tony Alamo said after Thursday’s vote. “I think the industry has received the message.”
One would not even expect this type of behavior in a men's strip club never mind a casino resort that caters to thousands of various customers of all ages. Metro has been allowed to police the strip clubs, hold those owners, managers, and employees responsible for its clubs activities...but apparently their oversight and involvement in casino nightclubs is not allowed...after all, don't mess with the Casinos and their sacred spaces. I disagree with Dr. Alamo that there is a philosophical shift because Casinos are 'now' being held responsible for the actions of a tenant...It has always been this way...one of the mission statements of the Gaming Commission is to protect and regulate the gaming industry...'moral turpitude' is a statement that the Gaming Commission has used since its inception. History shows casinos have been diligent in the past with tenants. Or, are we in a new day of casino managers? Let's everyone get honest about the casinos and their politically connected attorneys, and how the executive staffs continue to overlook its reponsibility with a highly privileged gaming license. It must be something more than a simple case of mnagement inexperience for these highly paid executives!
Hey all. Tune in to today's (July 29) rebroadcasts of "Face to Face with Jon Ralston" at 11am and 3pm on Channel 19. We talk with the attorney representing Planet Hollywood and with an author who detailed the evolution of the sex industry in Las Vegas.
And on today's Face to Face, we'll talk with County Commissioner Steve Sisolak and County Manager Virginia Valentine. We may ask about Prive and the county's response. That's at 5:30pm, 6:30pm and 8:00pm.
The "moral turpitude" clause is an over-reaching insult. There are no specified damages for violating this code, a code wholly dependent on the subjective interpretation of Gaming Control Board members. What is a "moral turpitude" code doing in a city built on libertarian principles?
"Oh, Club A looks like it might be having too much fun, based on an anonymous tipster - who may or may not be connected to a competitor - has sent us a list of unproven allegations. Let's lay out a fine for ... Hmmmm ... How does $1.5 million sound?"
Where's the due process?
This club will go the way of all the others.Clean up your act or close your doors...period.
Reza - can you read?
"Ronald Lyons, the club's former head of security, says Prive management had a different standard for big spenders and regulars, who were allowed to do drugs in the club while others were removed from the venue."
Not exactly an anonomous tipster. And Lyons is not the only one to come forward. I would say that the Gaming Control Board is doing its job. Unless of course one is favor of open use of illegal drugs in our nightclubs.
they're sending a message with prive. this club will never open again.
i don't feel bad for any of the people that worked there.
they make a TON of tax - free money in tips for really doing nothing and having no skills other than being young and hot.
I guess that closing them down will putan end to drugs and prostitution in Las Vegas.
stevem - what do you think those young and hot people do with their money. They actually put it back into the economy. You think all these young men and women are sitting on huge nest eggs? No, to them it's disposable income, and now restaurants and retail will suffer even more.
No, Bobby, I can't read. Thanks for pointing that out.
The Gaming Control Board has no legal empowerment to regulate nightclubs. They are overreaching, and any Nevada lawyer knows it, but none will challenge it. The GCB is not doing "its" job, it's doing the bidding of a select few whose goals are as equally related to money as they are to any false sense of morals. How does one even begin to apply a moral code to a libertarian business model that relies on the most base instinct of humanity for its survival and success? Absurd.
The behavior at Prive is no different than in any nightclub (or concert, for that matter) in any corner of the world. In fact, our nightclub scene is downright tame compared to Miami. Las Vegas should be the last city in America sanctioning any kind of moral police or code involving the slippery phrase "moral turpitude."
Reza - your welcome.
The GCB obviously has the power to regulate nightclubs as they can deny the license. What part of that do you not understand?
Your misinformation and condoning of open illegal drug use is a joke.
New York has shut down many nightclubs for illegal drug use. So have other cities. If you like public illegal drug use, then you are free to go to Miami and indulge yourself.
The GCB fine and county's license denial are two separate (though doubtless related) factors. On the other hand, the concept of "due process" doesn't apply here, since this isn't in a criminal matter, but a regulatory one; regulatory bodies are bound only to perform investigations, not full trials.
The GCB's authority to sanction casinos for the actions of their tenants -- essentially subcontractors -- isn't wholly unreasonable, though, yes, the "moral turpitude" clause is laughable. There's no reason the clause can't be written to more specifically and stringently address illegal activity, such as drug use and prostitution. There's nothing inherently immoral ("morally turpitudinous"?) about either.
And as long as we're talking about being more specific, can we all stop repeating this notion that Las Vegas was founded on libertarian principles? That's like me pointing to Hoover Dam and saying Las Vegas was "founded" on federal welfare. The origins of Vegas are much more complex and nuanced than either characterization.
Prive nightclub and The Opium Group are getting exactly what they deserve. The illegal activity that was cited by the GCB tarnishes the image of the host casinos and the larger nightclub industry. In one way or the another,we are seeing the end the Opium Group here in Las Vegas. Even Poetry is closing. They say the are supposedly relocating. But there will be a huge reluctance by any business or casino to do business with Opium Group in light of what has happened at Prive for sure. If I was a casino executive I would NEVER do business with this sleezy company or Pure Management group, the other sleezy nightclub company.
I believe this is the beginning of major reforms with how nightclubs operate in Las Vegas. There will be some casinos who will rewrite leases wit these clubs to exercise greater control over them. There will also be some clubs that will open and control their own nightclubs such as what The Hard Rock has done. The casinos will hire experienced operators to manage operations, but they will be the owners with the responsibility.
I go out to clubs frequently and the best run club operations are done by the Nine Group and The Palms. They are well organized, take care of their customers and most importantly work extremely well with the casino everyday in how its events are coordinated. This has a lot to do with the George Maloof and Michael Morton who are excellent customer oriented businessmen. If the industry needs examples of how to run clubs and casinos successfully just look at The Palms.
After all is said and done, I truly believe Opium and Pure Management Group will be history. They are sleezy, shady companies who use brutal and appalling tactics to shake down customers.
With City Center opening, we will see Light Group take a bigger role in the nightclub business in Las Vegas. They are a very reputable comapny with good people running it. Light and Nine group will make this tarnised club business look much better for Las Vegas in the future. I say this not as a person working in the industry.
I have no affiliation with the nightclub or casino industry, I am just a frequent patron who has observed many things in the 10 years I have lived here. The Las Vegas club industry will reform and reinvent itself once we find out the scope and severity of what was going on at Pure Management Group by the IRS.
The employees who spoke in anonymity and were threatened with lawsuits should sue Opium for being forced to work in an environment whose management broke the law by allowing criminal behavior on the premises.
to snort coke in the bathroom or drink yourself to death.. its all the same.... its kinda a fraud any way there are drugs and pimps all over the strip every day.....me i'm straight edge.....its all sick to me those clubs are lame...the people who go are shallow and damamged......but let them poison themselves I say.....same with strip clubs if your stupid enough to get suckerd into that fantasy ... we should let these fine businessmen make some money
FYI: POETRY is not moving because of what happened to PRIVE. POETRY is NOT owned by PRIVE. Poetry used to be callled OPM. Prive's owners the OPIUM GROUP out of MIAMI came to town like as*h*les and sued OPM for the name. OPM spent $250,000 defending themselves against deep pocket OPIUM GROUP and eventually had to change their name to POETRY. POETRY is moving becuase WOLFGANG PUCK is a terrible business man and is going bankrupt with his CHINOIS restaurant and it forced POETRY it's tenant who subleases from CHINOIS out. POETRY is extremely successful nightclub. They operated for 6 years total as both OPM and POETRY with NO PROBLEMS! ZERO! ZILTCH! Unlike PURE who has been around for Half the time and got busted for TAX EVASION and PRIVE who was around for 1/3 the time and lost their liquor license.
mrjohns, why would you say Wolfgang Puck is a terrible businessman?
He has had unbelievable success. The fact that Chinois is closing is not indicative of anything but that Chinois is closing.
I just cannot see what you are basing your assertion on.
Maybe you could enlighten us?
For Mr Reza
The GCB does not exercise direct control over nightclubs. They exercise control over the gaming licensees and hold them accountable for all of the actions on their properties.
Each gaming licensee is responsible for the actions of not only their own operations, but for all of the actions of their tenants as well.
The business license bureau exercises direct control over the liquor licensing and in this case, it seems that they used the Gaming Control investigation in conjunction with theirs in order to deny the permanent liquor license
As far as anyone who thinks that the GCB or business license bureau might be singling out an independant (ph); or singling out a non Las Vegas based entertainment behemoth (prive), please google c2k to see how allegedly complicit/inept venue management can end in tragedy.
It appears that legitimate allegations were leveled, inestigated and apparently dealt with in a completely appropriate manner.
Although it took almost an entire year, Michael Politz blog seems to have been proven 100% accurate, and maybe now he can talk about Prive again.
Denro sir. I say that because Wolfgang had a great location below Poetry Nightclub for their Chinois Restaurant and lacked the creativeness to actually turn it into something that would make money. They just gave up one of the best spaces in the most expensive malls in America. Why? When you have Cheesecake Factory 2 doors down doing 1500 to 5000 covers a night? Surely they could have learned from their success? Couldn't you have put in Gourmet Pizza, Haute Dogs, or Burgers? Something Proven to win at other casinos? Which leads me to believe that they must be receiving something from the Mall to move to force the "black club" out of business. Google Simon Properties Lawsuit, or Simon Properties Racism and see what pulls up. I am sure Simon Properties offered them some concession , if not in the Forum at one of their many malls across America. Perhaps you are right Wolfgang Puck isn't a bad business man. Maybe I am wrong. Maybe its the idiots he has that are running his ship under him? Why else would he run down to the bankruptcy attorney to surrender his liquor license as was reported here in the Sun, when it wouldn't have cost them anything to at the very least remain open this week, while Poetry's 100 employee families look for other work and aren't left in shock with nothing. That sir is the difference between a good businessman and a bad businessman and frankly in the end they will get what they deserve. Wolfgang's name has gone the way of KMART and is now lower class amongst the new crop of celebrity chefs. You can only hawk Salmon Pizzas for so long. That may have been the winning formula in the excess of the cocaine ridden 80s in Beverly Hills but sadly it is unoriginal now.
that's true...
but, they also use our police, fire, roads, etc. and do not pay their fair share of it.
hey, i'm all for "sticking it to da' man" as much as anyone else, but when you leave work with $500 in cash and pay no taxes on it, yet the ugly girl working at quizno's has a huge chunk taken out of her check when she makes that same amount...
i have a little problem with that.
and it doesn't matter, really.
vegas is on a long, slow, downward slide that will most likely claim a few more clubs before it's all said and done.
I agree with Steve M. Once again, I firmly believe Pure Management Group will be out of business within a year. The casinos will start owning and operating their own clubs. Not much will change as far as appearance. Only the names will change. Don't think that Light Group, Nine Group and the club operators at other casinos are not paying attention to what has happened to Opium Group. One of them will capitalize off of this.
As I said in a previous comment, we will see many changes with the club entertainment industry in the coming months...I only hope its for the better of everybody be it a tourist or locals.
Mr Johns, I get all that. Thank you. Some good points are made by you.
However the Puck enterprise can reserve to close a location, yes?
They had a restaurant here in San Diego years ago that turned out to be in a marginal location and they closed. So, they lose a few.
Regarding the Forum Shops, their Spago location is doing very well and has for a long time.
I think closing Chinois is just a basic business decision, and I wouldn't blame them if they didn't want the hassle of being a sub lessor involving the stuff going on between Simon, Caesars and Poetry, if that were a possibility as well.
We are making a lot of things up, and we don't really know the inside reasons for their choices, but I do appreciate and enjoy the dialogue.
the only thing wolfgang has to do with chinois is his name on the door.
haha.
i guess you think jessica simpson sits down with a notebook and designs her own shoes.
As a nightclub employee, I can tell you that a lot of venues on the Strip abide by the rules and regulations set by the Casinos meticulously. I have worked for three separate properties owned by three separate operators in the last four years.
My tips are TAXED! They are all turned in at the end of each night and are counted and pooled by position, just like casino dealers do. The tips are then disbursed evenly and the taxes for them are taken out of your paycheck.
I can not vouch for any of the nightclubs mentioned that have had trouble over the last couple of years, but I can say that every venue that I have worked for has been inside of an MGM Mirage property. The Casino Giant is too careful to have something like taxes tarnish their reputation. Every employee is trained, managed, and held accountable for the money that they earn.
I agree that the night life industry is very superficial, however being young and hot isn't going to make you a ton of money without earning it. Everybody in the industry works very long hours in a stressful and life consuming environment. Looks are just the pre-requisite. Personality and social skills are much more important. It's all about developing relationships with customers in this industry. Presenting a customer with a luxury experience and phenomenal service is what will keep them coming back, not just how the waitress looks.
It's not OLD Vegas anymore! We have rules, and regulations to abide by these days. Unfortunately, the tourists that come to town think that unlawful behavior is overlooked because of what they've seen on television or films. What happens in Vegas, stays in Vegas? Sure... until you're arrested!
It's simple for people to see what happened to Prive from an outsider's perspective and group every nightlife venue into the same category, but the truth is that there are very reputable companies out there that have been abiding by the rules the entire time. It's unfair for the mistakes of a few to affect the reputations of the rest. In the case's of Pure Management, or Opium Group... everybody knew what was happening. It was only a matter of time before it caught up with them.
RON LYONS IS THE REASON FOR ALL THIS. HE IS A CONVICTED RAPIST/SEX OFFENDER. THATS WHY HE MOVED TO RENO AND WORKS @ APPLEBEES. HE WAS THE ONE WHO SEXUALLY ASSAULTED AN GIRL THAT WAS INTOXICATED. WHY DOESNT THE MEDIA REPORT ON THAT??? PLUS ALL THIS WAS BACK IN EARLY 08', THIS IS A NIGHTCLUB WE ARE TALKING ABOUT NOT A LIBRARY! PRIVE IS TOTALLY DIFFERENT NOW THAN BACK THEN!
These guys are just reaping what they sowed.
They had huge problems getting their building permit from the get go thereby delaying construction for eight weeks then they drove the contractors crazy by pushing overtime work to complete the club in time for their New Year's eve party. To top it all off, THEY DID NOT PAY THE CONTRACTORS.
The General Contractor, though not lily white itself, has gone bankrupt and now the subs are left holding the bag.
this is what vegas is all about. restriction of trade and corruption everywhere. hypocrites and liars. drugs, sex and money. we love vegas. don't worry, there will be another prive rising.
Looks like Michael Politz was vindicated. Too bad this trashy nightclub blackmailed him into giving up his 1st amendment rights to talk about them.