Venetian: The fix was in

As usual when billions are on the line, regulators dove under the table regarding the sale of Venelazzo to an unholy alliance of Apollo Management and Vici Properties. Although the Nevada Gaming Control Board cried foul—and rightly so—at the sexual predations of Steve Wynn, it turned a blind eye to similar malfeasances by principal (12%) Apollo shareholder Leon Black. The latter had to step down as Apollo chairman for having “paid convicted sex offender Jeffrey Epstein $165 million for financial advice.” Is that what the kids are calling it these days? The 70-year-old billionaire is also under investigation for having allegedly raped a Jane Doe at Epstein’s Manhattan crash pad back in 2002. (Classy gent that he is, Black is having his lawyers shame the alleged victim.) The Epstein/Black connection is a tangled one … and this is the man Nevada regulators are prepared to gift with one of Las Vegas‘ premier resorts.

As the Nevada Current reports, “Black admits to making secret payments of $100,000 a month, beginning in 2015, to Guzel Ganieva to keep their relationship confidential. Ganieva alleges in her own suit that Black sexually assaulted her when she refused his overtures.” Wasn’t this the sort of thing that got Wynn Resorts sanctioned? Indeed it was. In case you hear the clang of leper bells, that’d be Apollo attorney Frank Schreck. Where Schreck goes, bad ideas almost inevitably follow (case in point). The Current again: “Schreck, a former member of the Nevada Gaming Commission, is the attorney who arranged for a corporate shell to secretly make $7.5 million in payments to a Wynn Las Vegas manicurist who claimed she was raped and impregnated by Steve Wynn in 2005,” per Massachusetts regulators, much more vigilant than Nevada ones. Schreck wasn’t even ashamed of his conduct, telling Bay State gaming commissioners that he wasn’t just acting at the behest of Steve Wynn but of his company too. “Just so this whole settlement would be maintained on the confidential agreements.” (Wynn Resorts paid $20 million in penalties in Nevada alone.)

Schreck could be assured of one friendly ear in l’affaire Black: NGCB Chair Brin Gibson, a former member of Schreck’s own practice. Showing he’d learned his lessons well, Gibson (above) refused to recuse himself from the Apollo vote, displaying not the least sign of contrition. Indeed, Gibson fairly strummed a harp at Apollo’s license hearing, saying—as summarized by crusading journalist Dana Gentry—”the company’s second foray into a Strip casino, doesn’t have to end in bankruptcy like the first.” Isn’t that sweet of him? And not very reassuring: “doesn’t have to.” He also said that Black would have no say in Venelazzo affairs, an assertion that fails to meet the smell test. Gentry’s investigation of the “uncomfortable” licensing found that Gov. Steve Sisolak (D) was the moving force behind ramming the Apollo approval through. So if this deal goes south, like Apollo’s ownership of Caesars Entertainment did, voters will know who to blame.

Gibson basically acted as Schreck’s ventriloquist dummy, answering questions meant for Apollo. “The leverage ratios are incredible and will just improve, I believe. And interest coverage is off the charts,” he chirped. “This is a very, very different transaction than the Caesars transaction.” At least NGCB member Phil Katsaros mustered enough courage to suggest requiring Black to be subjected to the Silver State licensing process, although it was a half-hearted effort, reminding one wistfully of the days when every 10%+ investor had to be individually vetted, a test Black would almost certainly fail. As for Apollo’s intentions to the hostages in the situation, the Venelazzo workforce, the firm assured regulators that job cuts weren’t coming, and that the generous pay and benefits they enjoyed under Sheldon Adelson will remain intact. It would be in Apollo’s self-interest to keep its word, as a disgruntled workforce would the Culinary Union‘s only too ready to take up the cudgels on their behalf.

Apollo will almost certainly be tempted to strip-mine Venelazzo, since its endgame is to flip the megaresort for a big profit. The fund’s Vegas emissary, David Sambur, testified that “Clearly, Caesars wasn’t our most successful investment,” showing a genius for understatement, “but everything else we’ve done in the gaming sector has been quite good—whether our new investment in Canada or PlayAGS in the heart of Las Vegas.” He also floated such ideas as i-gaming, property expansion and even cloning little Venetians across the country, citing the hub-and-spoke business model that didn’t quite pan out for Apollo during its reign of error at Caesars. He also blew sunshine up the NGCB’s ass about the future of the convention business, which needs to come through big time for Venetian Expo Center, the fifth-largest in the U.S.

The approval of Apollo’s sidekicks, Vici Properties, who are paying most of the freight, should hardly be so controversial. Even so, given Apollo’s dreadful track record in Vegas, Vici President John Payne felt it incumbent to come to Apollo’s defense. “We went at this deal with Apollo,” Payne told the Nevada Independent. “We believe in Apollo and what they’re going to do with the management team. Vici is a real estate investment trust, and in that format, we have no operational input. The capital requirements are Apollo’s. The management and how they run it is Apollo’s. I may be a recovering operator, but the decisions are made by Apollo.”

Sambur, defended the transaction as being far more sensibly structure than the (insane) Caesars deal, adding that Apollo was doing Sin City a favor, “bringing significant value to Las Vegas Sands while structuring in strong downside protection to continue weathering the pandemic recovery.” He added, “Everything else we’ve done in gaming has been really great. And the Venetian is going to be great, too.” Howard Stutz explains what the “everything else” is: “Apollo is the largest shareholder in Las Vegas-based gaming equipment provider AGS, has invested in International Game Technology’s Lottomatica business and took ownership last year of Canada-based casino operator Great Canadian.” Among the many questions left unanswered by the NGCB is just who and how Apollo intends to manage Venelazzo … and what will become of the stumpy St. Regis “tower,” left unfinished for 11 years? Is that can going to be kicked over to Vici? No one seems to know.

Sisolak’s connivance in this latest regulatory disgrace should earn him a hefty contribution from the PAC newly formed by the Nevada Resort Association, intended to reward legislators who do Big Gaming’s bidding (and woe betide those who don’t). As NRA President Virginia Valentine put it, “We’re looking for sensible individuals on both sides of the aisle who will champion issues that grow our economy, encourage economic investment and job creation, contribute to our employees’ well-being, ensure taxes are fair and transparent, and protect our state’s distinctive character as a global leader in travel and tourism.” The NRA has traditionally been issues-focused. Painting targets on the backs of noncompliant solons is a new move.

Meanwhile, on Las Vegas Sands’ southern flank, it’s filing a(nother) lawsuit in Florida. Why? Because at the Feb. 1 deadline for ballot-initiative signatures it was 77,000 signatures shy of the needed 891,589 verifiable ones. (Some overzealous Sands signature collectors had been canvassing graveyards, for instance.) Now Sands wants extra time put on the clock, saying it has 1,899,384 filed with another 417,046 on the way. This is not the usual Sands-funded fit of pique. The company (or its stalking horse, Florida Voters In Charge, which has received almost $46 million from Sands, the most ever in a Florida ballot drive) has an argument. Namely, signatures collected before Dec. 3 have 60 days to be verified. After the 3rd, the verification period narrowed to 30 days.

Never one to stint on overstatement, Sands, er, Florida Voters In Charge hufffed, “We believe we have submitted the required number of voter signatures to qualify for the ballot, but unlawful delays in processing them will lead to voters not having their voices heard.” Damnit man, it’s illegal, you hear? But seriously, Sands may well have a case for getting at least a 30-day mulligan. While some of its minions clearly took it upon themselves to commit election fraud, Sands/FVIC didn’t sink to the depths of DraftKings and FanDuel, under the guise of Florida Education Champions. The latter unleashed its lickspittles on Sunshine State college campuses, cussing out students who wouldn’t sign petitions, along with methods of dubious legality.

That’s not all. Reports SportsHandle, “Also according to the Panther NOW report, some petitioners actually entered and interrupted a Crisis Communications class and a Finite Math lecture to obtain signatures, confusing both students and one professor who assumed the petitioning was sanctioned by the university.” Clearly DraftKings and FanDuel have not learned from the overzealousness that got them into trouble during the heyday of DFS.

Jottings: Hotel taxes in Reno reached record heights last year, as the market surged back into play. Lodgings raked in $420.5 million, as rates averaged $136/night … Players Club card room in Ventura, California, is coming back from a long hiatus with a new location. The Ventura County Fairgrounds’ Derby Club is the venue, offering more elbow room—but less F&B service … Want to play in a Peninsula Pacific Entertainment casino built on a landfill? Rose Gaming Resort in Dumfries, Virginia, will be just the place. The $389 million project broke waste, causing one local to lament, “People worked every day and raised their families on the income that they earned by taking someone else’s waste and putting it in the ground.” It’s not PPE’s problem: The company is safely headquartered in California.

Quote of the Day: “If I walk into a casino today, it’s like reading an article that’s written in all caps with exclamation marks after every sentence. It’s just so overwhelming and confusing, and there’s no choreographic experience for the player. It’s flat. There needs to be this undulation, this roller-coaster ride of quiet and excitement and quiet and excitement.”—slot machine innovator John Acres.