(Michael Chamberlain/Nevada News Bureau) – Like a monster on the silver screen Stations Casinos is on a rampage through its smaller competitors. The gaming behemoth is crushing all in its path not through the marketplace, using the power of its competitive might, but instead by flexing its political and legal muscle.
Earlier this year, Stations and its colleagues in the Nevada Resort Association convinced the Clark County Commission and then the Nevada Gaming Commission to change their rules and declare the successful business model of Dotty’s to be illegal. Stations’s next target is a casino that hasn’t even operated in nearly ten years but is trying to fire back up again.
Stations is suing the City of Henderson and the Roadhouse casino at the corner of Sunset and Boulder Highway. The gaming industry’s equivalent of Godzilla is claiming the Roadhouse lost its nonrestricted gaming license in 2006 and, once again, even Stations own representatives admit that competition is one reason Stations is going after them.
The journey started in 1988 for the Roadhouse casino, named by owner Robert McMackin after the neighborhood “roadhouse” bars – often converted homes – that dotted the roads between the small towns along the Wisconsin-Illinois border near where McMackin, now 84, grew up. By 1995 it was fully operational and remained so until 2002.
Everyone acknowledges it was grandfathered in when the State of Nevada changed the requirements for obtaining a nonrestricted gaming license in 1992 to include, among other things, a hotel with at least 200 rooms. Even as Stations representatives contend this lawsuit is about assuring a level playing field, several casinos that are part of the Stations family were also grandfathered in under the same provision as the Roadhouse, including some within the City of Henderson.
In order to maintain its status while in dormancy, every two years the Roadhouse must renew its gaming license with the State. This requires extending its Conditional Use Permit (CUP) with the City of Henderson and opening for at least eight hours one day, which itself entails no small amount of effort and expense. Both the State and the City must approve this exercise each time – the Roadhouse must obtain a Temporary Use Permit from Henderson and pass a City inspection.
In 2006 the City of Henderson attempted to deny the Roadhouse an extension of its CUP. Stations contends this means the Roadhouse lost its CUP at this time, which also would mean the loss of its grandfathered gaming license.
However, the State of Nevada granted an extension of the Roadhouse’s nonrestricted gaming license two years later and Henderson issued Temporary Use Permits for its one-day opening in 2008 and 2010. In addition, an assistant attorney for the City wrote a letter in 2010 stating, “[A]fter after researching the matter and briefing the City Attorney on all issues, it seems the original use permit for this site is still in existence.”
Stations appears to be grasping at any straw it can to get rid of potential competitors.
Rather than address the Roadhouse’s gaming license with the State of Nevada, which is the ultimate authority on whether a company is qualified to operate as a gaming establishment in Nevada, Stations chose to address its Use Permit with the City of Henderson.
Rather than contest the Roadhouse’s status at any of the numerous previous occasions it had to appear before the City or the State, Stations waited until the Roadhouse obtained a rather routine approval of a plan to renovate the property in preparation for a reopening.
The lawsuit is “like a cloud over the property,” according to McMackin. Until it is resolved, the renovation and reopening are on hold, as are the construction investment and jobs along with the 80-90 permanent jobs at the Roadhouse.
As for McMackin, even as he continues to fight, he says, “At 84 years of age, it kind of catches up with you.”
The free enterprise system is about competing in the marketplace, where the best ideas, the best plans and the best execution should prevail. But all too often, the big and powerful prefer to use their political influence to crush the competition. Once again, Stations is using its political and legal muscle to make itself the only game in town.
(Michael Chamberlain is Executive Director of Nevada Business Coalition.)