When Gov. Fred Balzar signed a bill on March 19, 1931, to re-legalize casino gambling in Nevada following a 21-year ban, it was on condition that gaming be "wide open." In other words, casinos were prohibited from excluding anyone of legal age from any wagering area, meaning that any gambling could only be conducted in full public view. This provision was intended to ensure public confidence in the fairness of the industry and to prevent cheating, or any other nefarious activities, on the part of either the casinos or their patrons. This openness was deemed to be fundamental to the success of casino gambling and in spite of the advent of eye-in-the-sky surveillance technology, Gaming Control agents, and other safeguards, any gaming that wasn’t open to public scrutiny remained outlawed until the 21st century.
It was only after much debate and lobbying on the part of the casino industry that, in 2001, the state’s traditional wide-open rule was successfully challenged and so-called "international gaming salons," i.e., private gambling rooms for high rollers, were legalized. It was argued that this move was the only way for Nevada to compete successfully for the business of the whales, who were favoring other gaming jurisdictions both domestically and abroad on account of the less restrictive regulations that permitted publicity-shy high-stakes players to gamble away from the public gaze.
An international gaming salon license is granted only to those casinos that can genuinely cite the biggest gamblers as being among their clientele; the minimum wager in a private salon is $500 and the player must have $500,000 in cash and/or credit line. Hence, it’s no surprise that in 2002, with much fanfare, the first casino to apply for and be granted a license was MGM Grand, home to the famous Mansion suites and a favorite with the international whale crowd. Caesars and Mandalay Bay followed shortly thereafter.
And then there was a deafening silence.
Instead of the huge influx of multi-millionaires that the casinos had promised Gaming Control, an article in the Las Vegas Review-Journal on Jan. 6, 2004, revealed that the Strip’s three private casinos had won only $3.5 million since the first one opened in Aug. 2002, and that between March 1 and Nov. 30, 2003, not one high-rolling gambler had played in any of them.
The most likely reason cited for the unexpected flop was the amount of red tape and the strict rules surrounding private play in Nevada, which include logging in all players and live video-surveillance feeds to the Gaming Control Board, in addition to the mandated minimum bet level. The more relaxed approach in jurisdictions like London, Macau, Australia, and California has continued to see Nevada casinos struggling to compete. When representatives from Caesars Palace and Mandalay Bay approached the GCB in November of last year to request approval to continue operating their private gaming salons, they found themselves chastised by distinctly nonplussed Board members, who asked exactly what they’d been doing to attract the promised action. The licenses were renewed, but only grudgingly, and at the close of 2004 the prospects were not looking too promising for the future of private gaming in Nevada.
Fast forward a year and things seem to be looking rosier. A recent article by business columnist Jeff Simpson in the Las Vegas Sun (11/27/05) revealed that salon usage was up fivefold from the previous year’s rate, thanks largely to new private rooms at the Venetian and Wynn resorts and better marketing of the existing facilities at MGM Grand, Caesars, and Mandalay Bay. The Venetian in particular was singled out for praise by the GCB for its approach, which includes capitalizing on ties with the resort’s sister property in Macau to market directly to high-end Asian players and keeping the salons exclusive at all times: When the private rooms are not in use they will either be closed or will revert to lounges.
