Nev. regulators give Reno casino fragile lifeline | NevadaAppeal.com
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Nev. regulators give Reno casino fragile lifeline

(AP) – State gambling regulators Thursday gave a Reno casino a temporary and fragile lifeline to keep its license, and imposed daily monitoring and financial conditions that it must meet to stay open.

After a four-hour hearing, the Nevada Gaming Commission approved, then immediately stayed, an order suspending the license of Siena Hotel Spa Casino for not maintaining adequate bankrolls to pay winnings to gamblers.

Under the order, the Siena must retain $230,000 – or an amount determined by formula based on its casino operations, whichever is higher. Otherwise, it will face immediate closure by Gaming Control Board agents. Agents will monitor cash daily.

Additionally, the commission ordered all casino tax and fee obligations totaling $153,000 to be paid by July 22.

It’s the first time any commissioners or regulators could remember that the state has moved to shut down a club for not having adequate money on hand. Most casinos in financial trouble seek bankruptcy protection, which allows them to remain open under supervision while debts are restructured.

But Siena owner Barney Ng told the commission he thought filing for bankruptcy would cast a stigma and sound the “death knell” of the property.

Garrett Gordon, a lawyer for the Siena, said the owner and management began negotiations this week with owners of the Club Cal Neva, another downtown property, to take over its casino operations, but talks so far are only preliminary.

The Gaming Control Board, the enforcement arm of the commission, sought an order suspending the Siena’s license on two grounds – for falling three months behind on taxes and fees, and for not maintaining minimum cash to pay winnings.

Under state law, a nonrestricted license is automatically deemed surrendered if tax obligations are three months delinquent. On Friday, however, Siena officials delivered a $38,000 check to cover one month of past taxes, just beating that deadline and avoiding automatic license surrender.

Commissioners were unwilling to consider proposals allowing the Siena to remain open that didn’t include payment of back taxes.

If the Siena can’t pay taxes or make payroll, it’s “not in the public interest to keep that establishment open,” Commissioner John Moran said, speaking from Las Vegas. “I have a problem with that.”

Gordon and Siena officials said all employees are being paid.

The commission’s vote was unanimous, with one member absent. But Commissioner Randolph Townsend and Chairman Peter Bernhard were concerned that allowing the casino to remain open in such dire financial health would jeopardize public trust in Nevada’s gambling industry and be unfair to other license holders.

“This just doesn’t fly,” Bernhard said. “Yeah, you’ve done some things in the past week, but it’s too little too late.”

In early June, the casino closed its table games and laid off about 35 people. About 300 people work at the 214-room property along the banks of the Truckee River.

Last week, the Reno-Sparks Convention & Visitors Authority finance committee gave the Siena a year to pay four months of delinquent room taxes totaling $140,000 and keep its lodging license.

The casino also owes $400,000 to NV Energy, and under a separate agreement must pay $50,000 every two weeks to keep the lights on.

Siena general manager Clyde Callicott blamed the property’s delinquencies on previous management. He said he inherited debts and a default notice in December on a $50 million loan from Bar-K Inc. of Lafayette, Calif.