Nevada Gaming Commission’s logic wavers on its waivers

Ralph Waldo Emerson wrote that, “A foolish consistency is the hobgoblin of little minds.” Yet people trying to do business in Nevada prefer consistency when it comes to regulations.

The commissioners, all gubernatorial appointees, have showed inconsistency in their reasoning on the issue of when to grant waivers.

A growing split between commissioners is also becoming more pointed and obvious.

In September 2011, Miz Lola’s was granted a waiver by Commissioners Randolph Townsend, Tony Alamo and Joe Brown. Chairman Pete Bernhard had represented the applicant in a land transaction, so he abstained. John Moran was absent.

This Miz Lola’s was shy of the 2,000 square feet of public space requirement designed to eliminate slot parlors. It only had 1,713 square feet. Plus, it didn’t have a restaurant, which is now mandatory. However, its application was submitted a year before the new regulations.

This waiver made perfect sense.

In March 2012, Jim Marsh, a car dealer and prominent Republican, sought a waiver for regulations for his Bug Bar in Tonopah. No kitchen and not large enough. The vote for the waiver was unanimous and again sensible.

However, on May 17, the most ridiculous hearing involved this weighty matter: Should the Velveteen Rabbit lounge have four slots or five?

I’m not joking.

The lounge expected to open by late October has a space lease contract with Eagle Rock Gaming. The slot company would install five machines and would pay sisters Pam and Christina Dylang a flat fee of $1,500 a month.

The Dylangs took advantage of a city of Las Vegas redevelopment program in the Arts District, where they would be allowed to start an urban lounge without paying a $20,000 liquor license.

But to put in five slot machines, they needed state regulation waivers because they didn’t have a kitchen and their site was also shy of 2,000 square feet. Just like the Bug Bar.

The Velveteen Rabbit had also started its application before the new regulations passed. Just like Miz Lola’s. Waiver approvals should have taken minutes.

“This is not a slot arcade. … It is supposed to be a hip, artsy place for people to enjoy a drink before or after shows or before or after art exhibits. There will be live music at times. There will be art exhibitions at times,” said attorney Scott Scherer, a former Gaming Control Board member.

Alamo couldn’t support five slot machines, just four. Joining him were Townsend and Moran.

Moran worried there might be “a string of five or six of these urban lounges together, and all of a sudden we have a mini slot arcade in an area competing with nonrestricted longtime licensees.”

Bernhard and Brown had no problem with granting the waiver for five slots.

“I don’t have as much heartburn on the four machines,” Alamo said.

Five would set a precedent; maybe someone would ask for six next. Horrors.

Alamo moved to grant the sisters four machines, a number which doesn’t mandate the 2,000 square feet, and to waive the restaurant requirement.

The loss of one slot machine would mean a revenue loss to the Dylags of $4,600 a year.

Then it got a tad testy.

Bernhard asked Alamo, “What are the grounds for granting a waiver of the restaurant requirement?”

Alamo answered, “Well, Mr. Chairman, I really don’t have to debate that with you.”

Bernhard responded that under the regulation’s language (crafted primarily by Alamo) the commission needed to identify a public policy reason for the waiver.

Not answering the question, Alamo called for the vote.

The lawyer dismissed Alamo’s concerns about future applicants seeking eight or nine machines, saying he saw no reason to deny the Velveteen Rabbit five slots because of a future what-if, when every waiver is considered separately.

Bernard continued his public slap down of Alamo: “It would be bad regulatory policy and a bad precedent to set that any applicant that comes before us can be denied a request for a waiver based on the fear that some municipality might do something different in the future.”

As I previously reported, when Dotty’s Gaming & Spirits asked for two site waivers in July, one was granted because requiring a nine-seat bar for a Dotty’s in Reno would create problem for wheelchairs. The second waiver for the operation in Mesquite, which would seem to parallel the Bug Bar in Tonopah, was held so that Alamo, a doctor, could work with Dotty’s to design a floor plan to include a nine-seat bar.

The Velveteen Rabbit is in Las Vegas Councilman Bob Coffin’s district, and he said the commissioners’ debate over one slot is hurting downtown redevelopment. “It’s ridiculous. It’s hairsplitting.”

“I’m amazed at the inflexibility of some of these commissioners,” Coffin said. “There are a couple of fanatics on the commission.”

Can’t wait to see what reasoning, or lack of reasoning, will be revealed when the Mesquite Dotty’s comes back to the Gaming Commission, and whether it’s consistent with what they’ve done before.

Jane Ann Morrison’s column appears Monday, Thursday and Saturday. Email her at Jane@reviewjournal.com or call her at 702-383-0275. She also blogs at lvrj.com/blogs/Morrison.