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Counterfeit booze, crooked contests sink credibility

Nevada Appeal Staff Reports

by John L. Smith

There’s a reason I don’t eat at many gourmet restaurants.

It’s not just the eye-popping prices or my suspect table manners. It’s not all the confusing forks on the place setting or the fancy French phrases on the menu.

It’s the nagging sense that somewhere just out of earshot someone is having a good laugh at my substantial expense. It’s the uneasy feeling someone is getting something over on me by charging a day’s pay for a puny steak and an exorbitantly priced bottle of wine.

It’s only a gourmet restaurant’s reputation and credibility that separates it from being perceived as a culinary carnival sideshow where waiters run up customers’ credit cards like juice bar strippers.

The new Las Vegas is a lot like a gourmet room.

All that separates it from being perceived as a crooked midway and a sucker’s paradise is its reputation for square dealing and its credibility in the marketplace.

So, is Las Vegas on the square with its customers?

That’s the troubling question raised by last week’s admission by management at The Venetian that employees had rigged a high roller giveaway. The resort agreed to pay $1 million to the state to resolve a list of complaints.

David Friedman, assistant to company Chairman Sheldon Adelson, was given the unenviable task of authoring The Venetian’s official statement.

“The Venetian would like to thank the Nevada Gaming Control Board for its efforts to work constructively and professionally with The Venetian on this matter,” Friedman said. “The Board provided invaluable assistance to The Venetian in conducting a thorough investigation and has once again shown that the people of Nevada can place their trust in the state’s gaming regulators.

“The Venetian takes great pride in its strict adherence to its internal compliance policies and the gaming regulations of the state of Nevada and in upholding the public confidence and trust in the gaming industry.”

With rhetorical finesse like that, Friedman could be a U.S. senator some day. By coincidence, Friedman retired from the company last week to pursue other business interests. Four employees, including two unnamed senior executives, were terminated in the wake of the investigation.

Buried in The Venetian settlement are two complaints that focused on the purchase of seven $15,000 cases of wine through unorthodox channels. A well-placed gaming industry source with knowledge of The Venetian investigation said there was evidence labels were switched on bottles and that the wine, priced in excess of $1,000 a bottle, was counterfeit. Some of the wine was tracked to one of the resort’s gourmet restaurants.

What next, flog a flank steak and call it fillet?

In the company’s official statement, Friedman said The Venetian discovered and immediately reported the promotional drawing scam more than two years ago.

Two years?

Murder investigations take less time.

The company’s lawyers wisely rolled together an eclectic and growing list of regulatory complaints against the resort and made a bargain-basement settlement: $1 million in fines and investigative costs. The attorneys should get bonuses for their efforts.

Such a payment might sound like a lot to squares and rubes, but it was a pittance. The late Imperial Palace owner Ralph Engelstad paid a $1.5 million fine for holding a Hitler-themed party.

MGM Mirage was fined $5 million after an employee failed to file thousands of federal currency transaction reports.

In neither case were the casinos accused of rigging a contest or suspected of passing off a counterfeit product.

“These incidents were unfortunate and should never have occurred,” Friedman wrote. “However, The Venetian’s response to each situation demonstrated that The Venetian’s compliance programs are effective and work efficiently as designed.”

Do The Venetian’s problems end there?

Their remaining executives had better hope so.

All that separates Las Vegas from a grifter’s carnival is its precious credibility.

If they blow it, the next check they pay will be pricey even by new Las Vegas standards.

John L. Smith’s column appears Fridays in the Nevada Appeal. E-mail him at Smith@reviewjournal.com or call (702) 383-0295.