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October 31, 2014

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Mandalay Bay agrees to settle prostitution, drug allegations

Image

Courtesy of The Foundation Room

The Foundation Room at Mandalay Bay.

Updated Thursday, March 13, 2014 | 8:35 a.m.

CARSON CITY — Mandalay Bay has agreed to pay a $500,000 fine to settle a complaint that employees at the House of Blues Foundation Room provided drugs and prostitutes to undercover agents in 2012.

A five-count complaint by the state Gaming Control Board, released Tuesday, said at least 10 employees and at least five non-employees provided drugs and prostitutes and set up an area for sexual activity to take place.

The alleged activity took place over a two-month period and involved hosts, servers and security officers.

Six employees involved in the complaint have been fired, according to MGM Resorts International, owner of Mandalay Bay. According to the settlement, Mandalay Bay leases the venue to a third party.

Mandalay Bay has agreed to pay an additional $17,000 to cover the costs of the undercover investigation by gaming agents and Metro Police.

MGM Resorts also said additional security personnel have been retained.

The complaint, prepared by Deputy Attorney General Edward Magae and signed by the three members of the Control Board, asked the state Gaming Commission to impose fines and take action against Mandalay Bay.

The activity allegedly took place in the Foundation Room ultra lounge, known for its views of the Strip near the top of Mandalay Bay.

The board said it sent letters in 2006, 2009 and 2012 and offered training to Las Vegas casinos to prevent such activity. It said there was a rise in these activities in nightclubs, ultra lounges and other places within casino properties.

The alleged activity at Mandalay Bay started on June 8, 2012, when an undercover officer bought 2.8 grams of cocaine from a host of the Blue Room. On July 6, another 2.7 grams of cocaine was bought by the undercover agent from the same host. And the agent later bought 1.8 grams of ecstasy pills at a secluded place.

A server also provided drugs to the agents, according to the complaint. On July 27, a group of undercover officers went to the Blue Room and asked for narcotics and prostitutes. The server came back with two women; two additional prostitutes were later introduced to the group of agents, according to the complaint.

Agents asked two security officers to get drugs and provide a room for sexual intercourse. The complaint said the agents remained in the private room for about 10 minutes to give the appearance that they had engaged in sex.

There were more undercover sales in August 2012.

The names of the hosts, servers and security officers were not disclosed in the complaint.

The complaint said the failure of Mandalay Bay to prevent this illegal activity “tends to reflect on the repute of the state of Nevada and acts as a detriment to, or the development of, the gaming industry.”

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