Poker Palace hit with $250,000 fine for bookmaking scheme

By Richard N. Velotta (contact)

Fri, May 29, 2009 (3 a.m.)

A North Las Vegas casino has agreed to pay a $250,000 fine for allowing a group of alleged illegal bookmakers to lay off bets at the property’s race book.

Representatives of the Poker Palace on Las Vegas Boulevard North did not dispute the action approved May 21 by the Nevada Gaming Commission.

The state Gaming Control Board said in a five-count complaint that three Poker Palace employees provided unlawful rebates on pari-mutuel wagers, unlawfully shared pari-mutuel revenue, illegally accepted wagers from messenger bettors, illegally paid winnings to persons who did not place bets and failed to adequately monitor activities on the premises.

Poker Palace owner Marvin Coleman was cited for failing to adequately supervise his employees and his casino.

In a settlement signed before the commission’s meeting, the Poker Palace agreed to the charges in the complaint.

The Control Board launched an investigation in late 2006 when sports book audits uncovered uncharacteristically high handle on racing wagers at the Poker Palace. Using an agent working undercover, investigators discovered that the casino sought the business of two or three alleged unlicensed bookmakers by offering an off-track pari-mutuel contest that effectively guaranteed the group a rebate on its wagering activity.

“While the off-track pari-mutuel contest at issue appeared to be legitimate on its face, based on the makeup of the cash-prize pool and the manner in which the contest was conducted, the contest was in actuality a front for an unlawful rebate scheme in violation” of Nevada law, the Control Board complaint said.

It also said that although the contest was technically open to anyone, the $2,500 entry fee was well above the wagering level of typical race book customers at Poker Palace, most of whom bet $2 to $5 a race.

Historical data indicated that the average monthly handle at the race book was about $100,000 and the monthly average didn’t come close to the amount that occurred after the alleged illegal bookmakers became involved, laying off bets to protect themselves on wagers made by East Coast bettors.

Once investigators determined the identity of the alleged bookmakers, they called in the U.S. Immigrations and Customs Enforcement. The alleged bookmakers were not named in the complaint.

In the stipulation for settlement, Poker Palace did not admit nor deny the allegations, but entered into the agreement because the owner believed the board could meet its burden of proof.

Coleman did not attend the hearing, but was represented by two lawyers, including former Gaming Commission Chairman Bill Curran.

Of the $250,000 fine, $150,000 represented reimbursement of costs incurred by the board for the investigation and prosecution and $100,000 was the fine assessed on the five counts. The board could have fined the company $100,000 for each count.

In other business, the commission approved an amendment on when a new owner or holding company can participate in operations and approved the license of the Hard Rock Hotel’s general manager as a key employee.

The amended regulation clarifies that a person can participate in gaming operations if the licensed applicant has been employed at the operation for six consecutive months before the application is filed and gets administrative approval from the Gaming Control Board chairman, who can grant, deny, limit or place conditions on any request. If the chairman doesn’t deny a request within 30 days, it is approved.

The commission also licensed Andrew Kwasniewski of the Hard Rock. Kwasniewski told regulators that the new north tower would open ahead of schedule in July and the south tower would open in November.

The commission also welcomed two new members and approved a new vice chairman. Commissioner Radha Chanderraj was selected vice chairman, a rotating honor that changes annually.

New Commissioner Joe Brown cast his first votes and John Moran Jr. returned to the seat he left in 2005 to run for lieutenant governor. They replaced longtime Las Vegas businessman Art Marshall and former Lt. Gov. Sue Wagner.

It was a memorable first meeting for Brown who had to participate by telephone because of a severe throat ailment.