02/27/2004 12:00AM

Big fine a warning to casinos


The only "fixes" that gaming regulators want to hear about are those by technicians repairing slot machines for further use.

But, on Wednesday, one of Las Vegas's biggest mega-resort operators came to a settlement with the Nevada Gaming Control Board for fixing giveaway prizes for their high rollers.

Stemming from a 2002 complaint by the gaming board, The Venetian hotel casino agreed to pay a whopping $1 million fine for fixing promotional contests to favor selected high rollers at the resort. The complaint cited 12 counts, ranging from rigging a Mercedes-Benz prize to awarding gaming chips with denominations of $10,000 and $20,000. Other counts covered the failure to file the proper cash transaction reports, improper voiding of markers, accounting violations involving disbursement of promotional funds, and the purchase of seven cases of wine - valued at $15,000 per case - from a Mexican patron.

Of the 12 counts, The Venetian did not admit to two. However, the major count that shakes the very foundation of Las Vegas is the contest fixing. That, most industry officials said, was the compelling reason for the huge fine.

It is a $1 million message that Nevada gaming regulators will not stand for any action by any casino company allowing improprieties to affect the integrity of the games or giveaways.

Although The Venetian reported the incidents to the control board immediately upon uncovering the scam, regulators still hold the license operator responsible for its employees and their actions on behalf of the casinos.

Two senior executives and a pair of "rogue" employees appear to be at the root of the violations. Lengthy investigations revealed that the employees were attempting - on their own - to keep a high roller happy with the Mercedes "win" after he had lost about $5 million at the casino. Experts believe that fixing the car giveaway was unnecessary - they could have just given the gambler the automobile. Cheating other customers in the charade while pacifying a high roller seems pointless and foolish.

All four employees have been terminated. They were immediately suspended after the scheme was identified.

David Friedman, a top aide to Sheldon Adelson - whose parent company, Las Vegas Sands Inc., owns The Venetian - reported the company's position on the action in a Las Vegas Review-Journal story.

"These incidents were unfortunate and should never have occurred," Friedman said. "However, The Venetian's compliance programs are effective," he added, referring to the internal investigations that led to the discovery of wrongdoing.

Although the system does work and Nevada regulators handed down a serious penalty, Gaming Control Board chairman Dennis Neilander warned Nevada's major industry that such a violation is the worst of any kind. The rigging or fixing of any game in the Silver State, he said, "would tend to undermine the public's confidence" in the industry.

Considering all that is at stake, one angry high roller is certainly a small price to pay.