Fiesta to fight state complaint on race book rebates

State gaming regulators are preparing to file a formal complaint accusing the Fiesta hotel-casino of violating a 1997 Nevada law prohibiting race and sports books from offering rebates to their best customers.

Other books are being investigated, officials said, but it is too early to tell whether other complaints will be issued.

In a Gaming Control Board hearing Wednesday, regulators questioned Fiesta officials at length about their practice of allegedly letting high rollers bet on races they are sure to win -- but on which other members of the public have no opportunity to bet.

"What they're doing is writing wagers where there's no possibility for patrons to lose them," and limiting the participation to one person, said Board Chairman Bill Bible.

The purpose of these bets is to let the high roller win back about 10 percent of his overall losses, circumventing a law passed last year the prohibits race books from offering rebates, control board officials said.

Fiesta officials said they were operating within the law, and will contest the complaint vigorously.

Until last year, local race books regularly offered their high rollers discounts of 10 to 20 percent on their losses. The discounts were a way to attract high rollers to local books. They worked -- several big bettors were lured from tracks around the country to Las Vegas.

In retaliation, California race tracks demanded higher dissemination fees from Nevada books. When Nevada books refused to pay the higher fee, California tracks imposed a black-out on Nevada, preventing their races from being simulcast in local race books.

To end the black-out, the Nevada Legislature passed a law prohibiting rebates.

The gaming board is accusing Fiesta race book officials of structuring a special bet that is almost impossible to lose -- such as letting a wager be placed on a "field" of seven horses -- and making it available only to people who bet $5,000 a day. The purpose of these special bets was to circumvent the rebate prohibition, said officials for both the gaming board and the Fiesta.

"They attempted to create activity which would be permissible under that statute the way it was written," to retain large race book customers, said Preston Howard, a Fiesta attorney.

The Fiesta started offering the special bets after studying what other race books were doing, and determining that the bets were legal, officials said. The Fiesta will fully contest any board action, officials said.

Bible clearly sees the bets as a violation.

"You basically started doing incorrectly what you could no longer do correctly," Bible said.

The board will likely seek substantial sanctions against the Fiesta race book, including a fine equal to the book's profit from any affected high rollers, and an additional penalty, Bible said.

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