Planet Hollywood

State and county agencies react to the Prive issue

While the Nevada Gaming Commission pats Planet Hollywood on the back, Clark County takes decisive action in putting an end to “lewd activity”; Privé reportedly to appeal.

Prive nightclub at Planet Hollywood.

The person identified to the Weekly by the a representative for the Nevada Gaming Commission as being Planet Hollywood general counsel Mark Helm was actually John Michela, Deputy Attorney General. This change is reflected in the story below.

Somewhere in Clark County Thursday afternoon, Privé nightclub was being denied its permanent liquor license “for failure to abide by the duties of a liquor licensee,” and in light of the many complaints made against it by the Department of Business License and the State Gaming Control Board. For Privé, the news was grim: forced closure on or before July 28 with just 30 days to appeal.

Meanwhile, across town, the Nevada Gaming Commission was hearing the settlement in the matter of the State Gaming Control Board vs. Opbiz (Planet Hollywood). The settlement would allow Planet Hollywood to pay just $500,000 of the total $750,000 fine upfront, with the balance hanging over their heads for 12 months. Should tenant Privé cause further issues like the reported spike in prostitution and calls to Metro, or commit further violations such as allowing toplessness or underage drinking, the $250,000 fine would kick in.

At the hearing room’s podium, attorney Frank Schreck and Deputy Attorney General John Michela stepped up to take their medicine on behalf of Planet Hollywood, with demeanors that were a mixture of somber deference and thinly-veiled relief—the settlement was already pretty much a lock.

Schreck laid out for the Commission his client’s dutiful response to the nine-count complaint filed on July 9, 2009, describing what he called the “fairly Draconian steps” being taken by the casino to insure the future compliance of a rogue tenant. Among the changes, Planet Hollywood security will now have clearance to patrol Privé and Privé security will in turn be trained through the Planet Hollywood security department. In addition, Schreck said, Planet Hollywood security’s standard operating procedure manual has been adopted by Privé and new policies are already in place to eliminate the “dumping” of inebriated guests in the casino.

While necessary, these security-centric actions do little to address the question of how the guests become so inebriated in the first place, and whether they are even of age to be inebriated. No mention was made of any changes regarding the management team that actually commands Privé’s security force and which, being directly responsible for the venue’s operations, would have fostered the lax environment which allowed such violations to occur.

Meanwhile, back at the Commission meeting, Commissioner Dr. Tony Alamo praised Vegas’ nightlife industry: “Those clubs, personally, I think are a good thing … just a good thing.” But he wisely draws the line at health and safety.

It was Member Randall Sayre who the Commission said drew everyone’s attention to this matter, so it was time for him to get some of the ample credit being passed around the proceedings which, though serious, were remarkably cordial, even pleasant. “Everything you saw that was wrong, they [Planet Hollywood] have rectified,” Alamo said of Planet Hollywood’s negligence and subsequent amends. “But there are no absolute guarantees that this will not repeat itself,” Sayre also pointed out.

“You’re talking about some of the criminal conduct that you have seen,” said Schreck. “It’s not a good thing for gaming … I commend the board for taking the step on this thing and really taking the bull by the horns and their follow-ups that I’ve read about in the newspapers as recently as this morning. I think the board, in this matter, is right on point.”

But most damning for Privé and for any future clubs on the Planet Hollywood footprint was Schreck’s declaration regarding other casinos with four-walled nightlife tenants, that “if the clubs are going to be operated in this town, they have to be operated lawfully and in compliance, otherwise I think the licensees, their licenses should be at risk for that. If you look at these, each one of these lines of this complaint, it’s really appalling because that’s not the kind of a club, I would think, that we would want to have open.”

After being commended by Schreck, Commissioner John T. Moran commended Schreck and Attorney General Catherine Cortez Masto for a settlement well-written. It was Moran who delved deepest into the terms of the settlement, pointing out and cautioning Schreck and Michela on the specific verbiage of the settlement which requires that “If the board files a similar complaint again the respondent based on events occurring prior to July 31, 2010,” the $250,000 fine balance would come due.

Prive nightclub

Moran then firmly stressed “A ‘similar complaint’ means a complaint filed by the board against respondent with at least one count based on an act or failure to act of the Opium Group, LLC, dba Privé or any other nightclub on the premises of the respondent.” Therefore, Privé or no Privé, if any venue defined as a nightclub (a controlled-access adult entertainment venue with dancing, drinks and music) should cause problems to the commission, Planet Hollywood would once again be fined for negligence. Indeed the casino is responsible for any tenant, but the additional fine would be imposed if the culprit were a club. Michela and Schreck both agreed.

Next up for discussion was the amount of the imposed fine.

There are those who have speculated that the $500,000 fine or even the full $750,000 fine package is embarrassingly small. “I think that’s where most of my concern is,” said Chairman Peter C. Bernhard, posing the question to the Commission members: “What is an appropriate fine to attract attention? Does this do it? Is the $250,000 ‘kicker’ something that is an additional incentive so that we’re assured that not only will the operations police themselves adequately during this period of time, this one year period but also after that? Is the Commission comfortable with that?”

A cautionary tale for other nightclubs and casinos, the Commission members answered by collectively standing behind the $750,000 as an appropriate fine, “since the licensee came forward,” pointed out Moran. “Now I think that everybody has gotten the clear message: if you’re a licensee out there and a responsible licensee, you can see the writing on the wall, you can see that this is not gonna be tolerated, and that we want these clubs ran safely for the public and in full compliance of the laws of the gaming industry … Paying $750,000 or something less than that is not going to be the high water mark in the future now that these other licensees are on notice … In future, if there are any other clubs out there that are brought to our attention, that the fine be significantly more if its going to be settled.”

$750,000, Chairman Bernhard summed up, will not become a mere “cost of doing business.”

With their minds at ease on the matter, and with the soothing assurances of Schreck that his client has learned its lesson, the motion to accept the settlement carried unanimously at 12:46 p.m.

It was at 2:46 p.m. that the Weekly received the official statement that Privé’s license application had just been denied by the county

A representative from the Clark County Department of Business License reiterates that Privé must cease business operations when the temporary licenses for Privé and the Living Room lounge expire—midnight on July 28 and 30, respectively—and will not be able to reopen until the managing partners submit a new application and it can be brought before the County Commission for its consideration at the board's next regular meeting on August 4.

The board can then decide whether to grant Privé yet another temporary license while it considers Privé’s appeal of the revocation of the permanent license. If an appeal is filed—and sources say that ball is already in motion and that heavy-hitter attorney Jay H. Brown (former legal partner to Mayor Oscar Goodman) has been retained in their suit as he was the attorney of record for the “limited” license—the rep adds that such an application will have to address the myriad concerns that have been raised.

Opium Group declined to comment; there was no response to calls to the law offices of Brown, Brown and Premsrirut.


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