Certain privately owned casinos, such as the Cosmopolitan and SLS Las Vegas, will no longer have to report their earnings publicly because of a new regulation passed today by the Nevada Gaming Commission.
The rule applies to casinos owned by private entities that previously had to file regular reports with the Securities and Exchange Commission, even though no public stock was being traded back and forth. The affected casinos will still have to privately report their financial information to Nevada gaming regulators.
In taking away the public reporting requirement, the commission agreed that it had essentially proven to be an unnecessary burden.
Attorney Frank Schreck said that when the commission first considered opening the doors for private equity ownership of casinos, SEC registration was a selling point because it theoretically provided another layer of regulatory oversight. But given that the firms do not have publicly tradable stock, they do not actually get much SEC scrutiny, Schreck said.
Furthermore, the requirement has been expensive to keep up with and has forced some individual casinos to report proprietary information that their competitors do not have to disclose, Schreck argued. He said that taking away the requirement will also reduce some of the burden on the regulators’ side.
The change affects the likes of the Cosmopolitan, which is owned by Blackstone Group, and the SLS, which is owned by Stockbridge Capital.
Commission Chairman Tony Alamo said he was comfortable with the new rule because the Gaming Control Board, the state’s first tier of gaming regulation, would still get the same information it did before.
“You’re not gonna hide stuff from the (board),” Alamo said.
The Culinary Union had opposed the new rule, arguing in a statement that it would “only exacerbate the ‘too-big-to-regulate" problem in Nevada gaming by concealing more information from the public.” The union has tried to get regulators to scrutinize Deutsche Bank, which owns a stake in Station Casinos LLC, because of its connection to a major interest rate scandal. In its statement opposing the regulation, the Culinary said that even the previous licensing structure for large financial institutions had “enabled” Deutsche Bank to avoid Nevada gaming regulators.
After the commission’s meeting today, the control board held a workshop about proposed amendments to another regulation regarding sports wagering. The amendments seek to clarify that sports books can give out merchandise and other goods and services to sports book patrons. They should be considered further by the control board and the commission next month.