The Nevada Gaming Commission on Thursday signed off on a $500,000 fine against Mandalay Bay but also used the penalty to send a warning to the rest of the casino industry. Representatives of the company (MGM Resorts International operates the resort) did not contest the findings of a five-count complaint that employees of the House of Blues Foundation Room provided illegal narcotics and prostitutes to undercover officers four times during a two-month period.
In addition to the fine, Mandalay Bay agreed to a $17,000 reimbursement of investigative expenses. The commission unanimously approved the settlement after a hearing that lasted more than an hour. But regulators warned other gaming companies that additional penalties could be assessed if similar activities are uncovered. “Some day we’re going to have a hearing on one of these,” Commissioner John Moran Jr said. “This one isn’t the one.”
Commissioner Tony Alamo Jr. wondered whether a $500,000 fine would actually hurt a company like MGM Resorts, which operates 10 casinos on the Strip. MGM attorney Ellen Whittemore said the company, “was embarrassed that the incident took place at one of its Strip properties.”
Deputy Attorney General Edward Magaw told the commission the fine was consistent with penalties slapped on other casinos where similar illegal activities took place. “Mandalay took these issues seriously to make sure they did not happen again,” Magaw said.
Mandalay Bay President and Chief Operating Officer Charles Bowling, who signed off on the stipulation, appeared before the commission along with three other MGM Resorts executives. “I’m disappointed we’re here discussing this matter,” Bowling said. “Within the hour that we received the complaint on this matter, we went in proactive action to understand what happened.”
Bowling said the general manager of the House of Blues was replaced. “This was a message to our company that you have to keep your eye on your smaller venues, not just your large nightclubs”. Commission Chairman Pete Bernhard said he appreciated Bowling appearing in front of the commission and the attentiveness of MGM Resorts and Mandalay Bay to the matter.
