The Culinary Union’s latest attempt to exert pressure on Station Casinos seeks to bring a complex international finance scandal before state gaming regulators.
The union, which represents about 55,000 casino workers in Nevada, wants regulators to investigate whether high-profile misconduct has rendered a major bank unfit to retain its ownership stake in Station, the locals gaming giant that operates such casinos as Red Rock Resort, Green Valley Ranch and Palace Station.
In a recent letter to the chairmen of the state Gaming Control Board and Gaming Commission, the union asked regulators to hold a hearing about Deutsche Bank because of the bank’s involvement in rigging certain interest rates that are a key component of global financial markets.
Earlier this year, Deutsche Bank agreed to pay $2.5 billion in penalties to settle charges that it manipulated the London Interbank Offered Rate, or Libor, a benchmark interest rate that affects a wide range of financial loans and contracts, including mortgages and student loans.
Through a subsidiary, Deutsche Bank controls a 25 percent equity stake in Station. The bank acquired its stake as a result of Station’s bankruptcy proceedings several years ago, according to Bloomberg, which first reported the letter.
The union’s letter says it is “gravely concerned” about Deutsche Bank’s role in Station and refers to the bank as an “international outlaw.”
"We ask the board to immediately start a review as to whether it is consistent with Nevada’s gaming laws for an investor with this record to have a significant ownership stake in the holder of an unrestricted gaming license,” Culinary Research Director Maya Holmes wrote in the June 17 letter. “Furthermore, given the facts of repeated improper conduct by Deutsche Bank, the failures of the bank’s internal controls and lackadaisical culture regarding compliance, we urge the (Gaming Control Board) to call the bank and its executives forth for suitability hearings.”
Spokespeople for Deutsche Bank and Station Casinos declined to comment.
Gaming Control Board Chairman A.G. Burnett said the board is investigating the union’s allegations but hasn’t reached any conclusions yet.
The letter joins a lengthy list of instances in which the union has targeted Station in some fashion. For years, the Culinary has clashed with Station over unsuccessful attempts to organize employees at the casino company — a fight which most recently led the union to picket Palace Station on Friday.
The Culinary has also lately opposed an “irresponsible” water fountain planned for the headquarters of the Ultimate Fighting Championship, whose parent company is controlled by Station owners Frank and Lorenzo Fertitta.
While Station obviously stands to be affected by the union’s efforts, the letter spends most of its energy criticizing Deutsche Bank, not the casino company.
Noting that regulators have “spent decades diligently preserving the integrity of betting and honesty in reporting” by casinos, the letter asks them to investigate whether the bank and its “key principals” are suitable to be involved with the ownership of Station’s 19 properties.
The letter also asks if Deutsche Bank’s role in Station is consistent with the state’s “standard of strict adherence to federal law.” And it invokes a state law that says the gaming industry’s “continued growth and success” relies on “public confidence and trust … that gaming is free from criminal and corruptive elements.”
Station isn’t Deutsche Bank’s only connection to Las Vegas. The bank owned the Cosmopolitan until last year, when it sold the upscale Strip resort to Blackstone Group for $1.73 billion.