The Nevada Gaming Commission has fined a 79-year-old Las Vegas tavern owner $27,000 and suspended her gaming license for three months for allowing patrons to engage in sexual activities in public view.
Commissioners said that Judy R. Nelson failed to adequately supervise the employees operating her bar and that the conduct that occurred at the Las Vegas Eagle bar brought disrepute on Nevada's gaming industry.
The commission made its ruling in a 4-0 vote after a three-hour hearing Thursday that was continued from the commission's May meeting.
The commission could have fined Nelson up to $100,000 per incident and revoked her gaming license.
The state recommended a fine of $50,000 and a six-month suspension. When commissioners debated the penalty, they were wary of making it so severe that it would bankrupt the business.
In addition to the fine and suspension, the board agreed that the Control Board would conduct undercover surveillance during the suspension. If the fine — $3,000 per violation — isn't paid within three months, the license would be revoked. The board ordered the bar's slot machines to be shut down at midnight Thursday.
The state Gaming Control Board filed a complaint against Las Vegas Eagle, a gay bar with a restricted gaming license for up to 15 slot machines at 3430 E. Tropicana Ave. at Pecos Road.
According to the Control Board's nine-count complaint, Nelson, who has been licensed for 25 years, allowed the lewd activities at the bar.
In testimony today, Nelson affirmed that the bar had "Butt Night" competitions at which patrons bared their buttocks, "Locker Room Lockdowns" where patrons were allowed to participate in sexual activities and "Underwear Night," at which patrons were admitted to a separate section of the bar where they could strip down to their underwear.
Nelson said some of her employees, who have since been fired, recommended the promotions. She wasn't aware of the complaints until she received a letter.
Gaming and Clark County business licensing agents visited the bar at various times between November 2011 and April 2012 and observed the lewd activities.
Nelson's lawyer, Robert Lueck, called it a "half-baked investigation" and that agents should have just asked her to end the promotions.
"The state wants to crucify this woman," said Lueck, who said a large fine would ruin an individual living on Social Security income and profits she generates at the bar.
"It's not shocking that it's sex," said Senior Deputy Attorney General Michael Somps. "It's not shocking that it was sex among men. It's shocking that it was so blatantly out in the open in public view."
Commissioner John Moran Jr. said he believed Nelson knew the promotions were occurring because they were widely advertised and Nelson helped create an ambience in the bar for the sexual activities.