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.