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MGM settles complaint of drugs and prostitution at Mandalay Bay

Even when a business is not directly involved in criminal activity, Nevada authorities may seek to hold it responsible for crimes that take place on its property. Businesses that are large and open to the public, such as casinos on the Strip, may struggle to keep themselves clean of prostitution and illegal drugs. But as they say, in many cases an ounce of prevention is worth a pound of cure.

Executives at Mandalay Bay may be thinking of this old saying, after the company settled a complaint against it made by the Nevada Gaming Control Board. The casino’s owner, MGM Resorts International, has agreed to pay a $500,000 fine, in exchange for the five-count complaint to be dropped. Authorities said that MGM allowed prostitution and drug sales to go on at one of Mandalay Bay’s lounge rooms.

According to the Control Board, in the summer of 2012, undercover officers repeatedly went to the House of Blues Foundation Room at the top of Mandalay Bay. They asked employees for cocaine, ecstasy and prostitutes. Various employees provided for these requests, according to the complaint.

MGM has fired six employees mentioned in the complaint. In addition to the $500,000 fine, the casino will pay $17,000 to cover the costs of the investigation.

Without knowing for sure why MGM settled the complaint, it could be that it received legal advice that the cost of continuing the litigation was not worth the risk of further penalties. This could be counted in bad publicity, as well as financial costs. A commercial litigation attorney should always considers his or her client’s best interests when giving legal advice.

Las Vegas Sun, “Mandalay Bay agrees to settle prostitution, drug allegations,” Cy Ryan, March 12, 2014

John P. Aldrich
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