Despite raising some concerns, the Nevada Gaming Commission backed changes to two-decades-old regulations for gaming salons as a way to attract more visitors that casinos are losing to other states.
The changes recommended by the Gaming Control Board in late August will make the salons more accessible and include such games as poker. Senate Bill 459 backed by the Gaming Control Board and Nevada Resort Association enabled the changes made Thursday during a 70-minute hearing. The vote was 5-0.
There’s no longer a $500-minimum wager to play slots. Instead, casinos can set minimum wagers approved by the Gaming Control Board. The salons are also no longer required to include table games. And they can be converted temporarily to a public gaming space.
Currently, the financial criterion for admission to a gaming salon includes an up-front deposit of at least $300,000, a $300,000 line of credit, or a combination of the two totaling at least $300,000. The industry wanted that price of entry reduced or eliminated and the Gaming Control Board recommended $20,000. The Board’s chair can approve lower amounts. The elimination of higher front-money requirements would allow for people who value their privacy and security, such as athletes and celebrities, and offer the ability to generate significant revenue for the state and free advertising for properties and Las Vegas, proponents said.
Commissioner George Markantonis said he didn’t “fully agree with this,” asserting that the financial thresholds were put in place for the protection of the casinos. Those rules allowed operators to defer to the regulations when dealing with unwieldy customers.
“It’s a high-end gaming salon and not a VIP concierge lounge,” Markantonis said. “It’s not meant to be, in my opinion, so a celebrity can be taken off the floor so they don’t have a little crowd around them. There are other ways casinos deal with those every single day. With all of the anti-money-laundering problems we’ve encountered in the last six months – Resorts World, MGM, and Wynn – the casinos have some difficulty controling their customers and hosts on top of that. The hosts are pressured by the customers and their own bonus criteria. Therefore, if we were open it up, it’s almost a free-fall-all. We may not call it that.”
Markantonis said they don’t have the enforcement agents to police the salons when they have to deal with other matters too. He asked for a higher threshold for entry.
Salons were created to cater to high rollers who would otherwise not gamble in Nevada, thus costing the state revenue. They were launched in 2001 after being passed by the Nevada Legislature, with a minimum requirement of $500,000; that was lowered to $300,000 in 2008.
Nevada Resort Association CEO Virginia Valentine said that in the 24 years since the advent of gaming salons in the state when less than half of the states had legal gaming, now every state except Utah and Hawaii have some form of legal gaming.
“Las Vegas itself has changed, with the introduction of professional sports, large-scale entertainment venues, and resort casinos attracting a diverse group of visitors,” Valentine said. “There are international guests, professional athletes, actors and entertainers, and other high-profile individuals. This evolution from the Gaming Capital of the World to the Sports and Entertainment Capital of the World has changed the definition of high-value customers. Some of these guests are seeking exactly the same level of privacy and security as salon patrons that was envisioned in the passage of legislation in 2001.”
Valentine said salons can generate not only gaming revenue for the state, but tax revenue on food, beverage, lodging, retail, and entertainment offerings. Gaming revenue is a much smaller portion of overall revenue today, she said.
“Free advertising, known as earned media, also benefits the state, licensees, and destination,” Valentine said. “By lowering the financial criteria and offering privacy, security, and and elevated gaming experience, we feel we will attract casinos patrons who are not playing here now. No other state or tribal entity regulates minimum front-end requirements. They can ensure guests return by creating curated experiences and the operators are best to determine that minimum deposit that makes sense for their business model.”
Commissioners raised concerns about the ability of guests of the high-end patrons to use the salon some 24 hours after that patron leaves.
Charlie Stone, executive vice president of casino operations at Wynn Las Vegas, said guests of the patrons in these private salons would be able to stay for six hours after they leave under current rules and create uncomfortable conversations that the guest has to depart. “Allowing them up to 24 hours creates a much smoother operational experience and allows us to put our best foot forward in terms of hospitality.”
Stone said all players, whether they are patrons and guests, are tracked for know-your-customer rules.
Commissioner Brian Krolicki said if someone is a guest of a patron, that’s the patron’s responsibility. He suggested that there’s merit that the guest should leave when the patron does.
Commission Chair Jennifer Togliatti asked if a patron comes in with a 20-person entourage, do they get to spend that person’s money when they leave.
“A lot can happen in 24 hours,” Togliatti said. “The girlfriend could leave and come back and no longer be the girlfriend. Or certain financial arrangements between them violate Nevada law.”
Stone said salons are an extension of the high-limit room, with the same casino games, rules, and payouts. There’s one supervisor for one or two tables, which is greater than on the main casino floor. He called it secure.
The entourage can’t spend the patron’s money when they leave, Stone said.
Stone said he’s fine with operators having a zero amount for a threshold to enter.
“It goes back to privacy,” Stone said. “The main difference between many years ago and today is that everyone has a cellphone in their pocket. Privacy is now more important than ever. We’re hearing that from our customers and it’s not just celebrities. It’s CEOs here for conventions, and there’s a variety of reasons people want privacy when they come to town. Gaming salons not only offer privacy and extra security, but they are also extremely beautiful. We’re in the business of providing the best hospitality in the world and we want to show that to our best customers. We have butler service and the ratio of staff makes a difference in the service levels. Security is paramount too.”
Adding poker to the menu means the gaming salons have the potential to generate “significant revenue for Nevada” if moved from private homes, proponents said.
