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The Nevada Gaming Commission (NGC) has unanimously approved a gaming license for the San Manuel Gaming and Hospitality Authority (SMGHA), a subsidiary of the San Manuel Band of Mission Indians, to acquire the Palms casino from Red Rock Resorts for $650m.
The approval followed a one-hour long hearing on Thursday and comes two weeks after the Nevada Gaming Control Board (NGCB) recommended approval.
With a gaming license in hand, San Manuel executives expect the transaction to close Friday.
The Highland, California-based tribe will become the first Native American tribe to own and operate a casino in Las Vegas. The Mohegan tribe of Connecticut manages the casino at Virgin Hotel Las Vegas with J.C. Hospitality operating the hotel.
Hard Rock International, which is owned by the Seminole Tribe of Florida, announced on Monday that it was buying the operations of the Mirage from MGM Resorts International for $650m, a move that will similarly require a gaming license. At least one other tribe is understood to be considering a Las Vegas investment as well.
“We are grateful for this opportunity to share our long-standing tradition of hospitality with Las Vegas and execute our vision for this iconic resort, starting by welcoming back former and current Palms employees,” SMGHA chairwoman Latisha Casas said in a statement after the hearing.
“Together, we will create history,” Casas added.
San Manuel operates the Yaamava’ Resort & Casino on tribal land in Highland, which is located about 60 miles east of downtown Los Angeles and is the largest tribal casino in California.
Laurens Vosloo, CEO of the SMGHA, told the commission the tribal-owned entity was prepared for a rebound in the gaming market that “we have seen over the last six months.” Vosloo added that the $650m property was “priced below replacement cost.”
The SMGHA acquired $750m in loans to purchase the property from Red Rock Resorts, setting aside $100m for working capital and opening costs.
Palms general manager Cynthia Kiser Murphey told the commission that some minor upgrades are needed on the building that has been closed for almost two years. Murphey said the company plans to reopen the Palms in Spring 2022.
Red Rock Resorts, parent company of Station Casinos, acquired the hotel-casino in 2016 for $321.5m and spent $690m redeveloping the property, which remained closed following Nevada’s 78-day shutdown due to the coronavirus pandemic between March 18 and June 4, 2020.
Murphey also told the commission that Caesars Entertainment-owned William Hill US has been contracted to operate sportsbook at the property. The gaming company is currently in the licensing process and executives were hopeful the sportsbook would be operational when the Palms reopens.
Remote ID Verification Approved
After the NGC approved San Manuel’s gaming license, the control board held its second workshop on a proposed regulatory change that would enable remote verification of casino wagering accounts, but not for sports betting and pari-mutuel accounts.
Deputy attorney general Michael Somps told the NGCB that that after reviewing federal anti-money laundering documents he did not see any conflict with federal law should the control board decide to move forward with the regulatory change.
It took the three-member control board less than 30 minutes on Thursday to approve the change.
Board member Phil Katsaros said the move to remote verification encourages the use of technology, something gaming regulators have wanted to encourage.
“This in no way discourages visitation,” Katsaros said. “You still have to go into the casino and game in any event. It no way jeopardizes, sacrifices or short cuts any of our regulatory oversight.”
Sightline Payments initially petitioned regulators in September 2020 to make the regulatory changes that would allow casinos to verify the identity and fund wagering accounts of players without them having to appear in the casino.
The proposed regulatory change is expected to go before the five-member commission for final approval early next year. Current law allows customers to set up and fund cashless accounts remotely, but they must appear in person to verify their identity with a casino employee.
“Sightline applauds today’s … decision to recommend a regulatory change that would allow digital identity verification for on-premises casino wagering in line with current [federal] guidance for remote identity verification at casinos,” Sightline Payments co-CEO Omer Sattar said in a statement following the hearing.
Sattar said the recommendation is a further step toward modernizing Nevada’s cashless infrastructure.
Attorney Marc Rubinstein, who represents Station Casinos and Red Rock Resorts, had warned regulators during its first meeting and in written comments that Sightline’s proposal could violate federal anti-money laundering (AML) laws.
On Thursday, Rubinstein expressed support for the measure.
“We think by coupling the government-issued ID with the alternative method of verification we are comfortable that there is no longer an issue with federal law,” said Rubinstein, managing partner with Reid Rubinstein & Bogatz in Las Vegas.
According to the proposal approved on Thursday, except for sport-betting wagering accounts, “the identity of the patron is otherwise confirmed remotely through the patron providing a [valid] government issued picture identification credential couple with an identity verification method that enables the licensee to form a reasonable belief that it knows the true identity of the patron.”
“Such identity verification methods include, without limitation, dynamic knowledge-based authentication (KBA), or other method acceptable to the chair,” the proposal reads. With KBA, customers would be prompted to answer personal security questions to verify their identity.
