Control Board scolds pub operator for employee licensing gaffes

By Richard N. Velotta (contact)

Fri, May 15, 2009 (2:13 p.m.)

State gaming regulators scolded executives of a chain of Las Vegas taverns for being lax in scrutinizing employees submitted for a license.

The state Gaming Control Board voted unanimously to recommend the withdrawal of the license application of a key employee of the Golden Tavern Group, a subsidiary of Golden Gaming Inc., operators of PT’s and Sierra Gold pub chains. The employee had been fired a week earlier for lying on his job application.

The Nevada Gaming Commission will consider the board’s recommendation May 21.

Edward Holland IV worked for Golden as a regional operations manager overseeing several PT’s Pubs.

Holland had applied for a license as a key employee, a requirement set by the Control Board.

When investigators looked into Holland’s background, they found that he had failed to disclose a bankruptcy filing, a drunken-driving charge that later was reduced to a lesser offense and an allegation of a failure to pay child support.

When investigators contacted Golden management with questions, Holland was fired.

Holland and Golden Chief Operating Officer Steve Arcana appeared at the Control Board’s May 6 meeting seeking to withdraw the application.

The board told Arcana the company needed to do a better job of scrutinizing employees submitted for licenses since it has become a recurring problem.

“Why are we depending on the resources of the Gaming Control Board to ferret out these problems?” member Randall Sayre said.

Arcana said his company developed new procedures for background checks in 2007 that included drug tests and more personal and financial checks.

He said part of the problem has been that the company has promoted from within and that many PT’s employees remained when Golden acquired the chain and their background checks weren’t thorough enough.

Arcana said the company is working to improve its procedures “so that we don’t waste the board’s time.”

Sayre shot back that it’s not just a waste of time, but a waste of the company’s money — the Control Board bills companies for the time spent on investigations. The average cost is about $30,000.

The board recommended Holland’s application be withdrawn without prejudice, meaning he could reapply for a license but an investigation would start from scratch.

In other business, the board recommended Andrew Kwasniewski, general manager of the Hard Rock Hotel, as a key employee.

Kwasniewski told regulators that the new north tower would open ahead of schedule in July and that the south tower would open in November.

Kwasniewski said the property had a successful opening of the new Joint concert venue with former Beatle Paul McCartney. The property generated the most one-day revenue in its history that day.

Other changes are ahead, Kwasniewski said. A new swimming pool will be ready by January, but he said it wouldn’t open until the weather got warmer in 2010. Also, the Body English club would be converted to a showroom and another club will be built. Three restaurants also are being added.

The board also made several other suitability recommendations.

The board recommended a license for longtime Station Casinos Vice President and Treasurer Thomas Friel as an officer and key executive, and for Harrah’s Entertainment executive Don Marrandino. Harrah’s, one of the big players on the Las Vegas Strip, is seeking a restricted license for 15 slot machines at the Hot Spot Oasis, a bar in the Fairfield Resort.

A license for Kagemasa Kozuki as a member of the board of directors was also recommended. The chairman of Tokyo-based Kozuki Foundation for Sports and Education, tied to slot-machine maker Konami Corp., was scheduled to appear before regulators, but couldn’t because of Japanese travel restrictions in response to the swine flu outbreak.