Nevada Gaming Commission approves $1 million fine against Palms

An exterior view of the Palms on Sunday, Jan. 15, 2012.

The Nevada Gaming Commission today approved an agreement to levy more than $1 million in fines and fees against the Palms amid accusations that nightclub employees offered drugs and prostitutes to undercover officers.

The action formalized a settlement reached Jan. 11, the day the state filed a 17-count complaint against the casino. The board allowed the Palms four months to pay the $1 million fine, plus $78,000 in investigation fees.

The commission said it hopes the fine will encourage other properties to police themselves.

This wasn't the first investigation into Las Vegas nightclubs. The Palms complaint came two years after similar allegations drew a fine of $650,000 against the Hard Rock Hotel.

“We are grateful to the Nevada Gaming Commission for approving the proposed settlement of the complaint … and for the efforts of the Gaming Control Board and Attorney General’s office throughout this process," casino officials said in a statement. "This is a very serious matter, and we are committed to preventing this from happening on our property again.”

The investigation, which ran from March to May, ended before the Palms took over ownership of the Nine Group, which manages nightlife, restaurants and pools at the casino. Nightclub management said they did not know employees were engaging in the activities outlined in the complaint.

Investigators said nightclub hosts, security guards and bottle runners offered to supply drugs and prostitutes to undercover officers at Moon, Rain, Ghostbar and the Palms pool. The complaint accused a bottle runner at Rain of offering to supply one of the officers with as much as a pound of cocaine for $18,000. Authorities also reported buying Ecstasy and prescription painkillers inside the clubs.

Security guards stood watch outside of private rooms and poolside cabanas, the complaint said. One woman at Moon agreed to perform sexual acts on one of the officers for about $2,000, it said.

As part of the settlement, the Palms agreed to overhaul its nightclub security and operations policies. Palms casino security officers, rather than a separate staff, will now keep watch over the nightclubs, and the company will administer drug tests on employees.

The Palms also agreed to use employee whistleblower hotlines and mystery shoppers to prevent illegal activity.

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  1. The only way for these casinos to get the message is to suspend their gaming license for a period of time. ^ months to a year suspension would send a real large message believe me. This nonsense goes on all along the strip and will continue unless a reall hard line is taken.

  2. Taking a much more Libertarian view than Mr. Swanson, I believe these activities, among consenting adults, should be legal. I abhor the use of "recreational" drugs and think those that mess with them are dumber than dirt, but since they are adults, it should be their choice. As for prostitution, who cares? As long as they do not engage in criminal acts against their "Johns" and are adults, whose business is it? However, as long as those activities are illegal, they should be enforced in an equal manner. Get caught under the same circumstances and think all you'd be is fined? Why has no one been arrested and charged? "Deep pockets," that's why. The laws are not about morality nor about "criminal" activity. Nope, they are a way of extracting money from those that can pay, in a big way, as in the case of the Palms. For those that can't, it's "3 hots & cot" justice.