Sam Nazarian Operates Trendy Nightclubs in Los Angeles and Miami
Los Angeles nightclub mogul Sam Nazarian won unanimous approval by the Nevada Gaming Commission for a gambling license on Thursday. The license was won on appeal in a 4-0 vote, after it had previously been stripped following shocking revelations of misconduct.
After an early December meeting, Nazarian had to step back from his Las Vegas business interests. He also needed an attitude adjustment–or perhaps better preparation for the Q&A process–before talking to the commissioners a second time. At the appeals hearing, he convinced the panel members to grant him a limited license.
Sam Nazarian’s Profile
The 39-year old Sam Nazarian became wealthy and famous for his nightclubs in Los Angeles and South Beach. Those clubs attracted the wealthy, the elite, and the famous of LA and Miami. Earlier this year, Nazarian decided to expand into the Las Vegas market by opening the SLS Las Vegas Hotel.
When the club operator’s past was explored, though, the Gaming Commission found a pattern of instability. Sam Nazarian had a recent history of cocaine usage. Even worse, he had paid $3 million to a convicted felon, who had convictions for drug possession and money laundering. Some of the money went to Death Row Records founder, the notorious Suge Knight.
Money Laundering Is Problematic
The worst revelation may have been the connections to money laundering. In a city once tied to organized crime and still under constant federal auditing, money laundering is not an association a casino owner wants to have.
When questioned by the Gaming Commission earlier this month about the payments, Nazarian characterized them as “extortion”. On Tuesday this week, Nazarian handed control of his Las Vegas holdings over to his principal investor, Stockbridge Capital.
Stockbridge Executive Managing Director Terry Fancher said, “We have made a collective decision to change the operating structure for the property.”
LA Club Owner Makes Promises
Nazarian says he did some soul searching after his first discussion with the Gaming Commission. In the weeks since, he appears to have gained the composure to assure the commission he’ll be a stable force when he eventually returns to the Las Vegas scene. In the meantime, his business partners will operate the business.
In the appeals hearing, Nazarian told the Nevada Gaming Commission, “Not only will I not embarrass, but I’ll make you proud. I need to take some time for myself after 39 years.”
He went on to say that he was uncertain whether he had an addiction or not, but he would explore the possibilities and get treatment if he did. Such discussions are likely to be very uncomfortable for a glitzy business owner used to fawning praise and easy acceptance. If so, then the words of the Nevada Gaming Commission might have stung the 39-year old.
Commissioner Comments to Nazarian
Commissioner Randolph Townsend warned Nazarian that any future misconduct would be “a pox on all of us.” He also told the nightclub owner, “If this goes forward, don’t let us down.”
According to reporters, three commissioners were ready to deny Nazarian a license after his first appearance before their panel. He appeared evasive before Gaming Control Board hearing earlier in December. This time around, it was a more convincing performance. He appeared contrite, sincere, and humble.
Still, commissioners felt the need to lecture Nazarian on the code of conduct. Commissioner Joseph Brown told him, “I hope you’ve learned that this isn’t L.A. or Miami. Gaming is a totally different ballgame.”
Whether those words will be heard is another matter entirely. Despite the slogan “What Happens in Vegas, Stays in Vegas” and despite the reputation for wildness earned in yesteryear, Las Vegas is in many ways now a corporate and family town. Wild antics and flamboyance that might make one a success in Los Angeles is a liability in Las Vegas–at least among the business community.
