Sexual harassment: 3 areas of concern

Mar 13, 2018 3:00 AM

After the news came out that the Nevada Gaming Control Board (NGCB) was going to take a harder line regarding sexual harassment I received a few questions from a few confused and concerned domestic and international marketing executives who were trying to figure out, without going to their in-house counsel or compliance officers, what an NGCB crackdown might really mean to them with regards to three unique but relatively common topics – strip clubs, in-room massages and hostess clubs.

While I redirected them to their in-house counsel, they did raise interesting questions.

Strip Clubs: While most of us have heard about taxi drivers getting a little something from the strip clubs for encouraging their passengers to go to certain clubs, most people are not aware that a few clubs are willing to be generous with casino marketing executives who steer free-spending casino customers to their clubs; or that such generosity can run from 5% to 20% of the customers expenditures.

Oddly enough there is nothing illegal about paying someone to steer business to a strip club as long as it is properly disclosed and permitted within the regulatory guidelines; ethically and morally challenging yes, but not illegal.

To avoid harassment claims though, the executives involved should avoid asking or directing their staff members to make the arrangements. In these cases though, and if it were my casino, I would be ripping the executive(s) for taking the casino guest somewhere else to spend their time and money as I would much rather both be spent in the casino.

In-Room Massages: While the streets of Las Vegas are often littered with flyers, handouts and free magazines featuring in-room entertainers or in-room massages, casino hosts are frequently asked by their high-end guests to arrange an in-room massage for them. Some of these requests are quite legitimate and some are not, which basically makes that type of request of the casino host the equivalent of pandering, and is probably very illegal.

In the past, having fired or accepted the resignations from some casino hosts caught in such actions, I do not have much sympathy, and expect the casinos, if not on their own, will be stimulated by the NGCB to curb such behavior. Though not harassment in the traditional sense, it certainly lends to an environment and blurs the lines where the lines should be clearly defined.

Hostess Clubs: Though not as well known in the U.S. as they are throughout Asia, hostess clubs are very commonly used by some casino marketing executives in the process of wining and dining casino customers.

The clubs generally provide young ladies to sit with male guests and encourage them to drink, dance, sing karaoke and eat. The more girls that sit with the guest, the more drinks poured, and the more food eaten the more the club makes. Sadly, often for a fee to the club, the girls will leave with the customers.

In a lot of countries these clubs are fully legal and in other countries where prostitution is illegal, they simply say the girls are escorting the customers. These clubs are so popular they also exist in reverse where women customers are entertained by young men under the same rules.

It be interesting to see if the NGCB or NGC even addresses this topic, as it is a normal and customary business entertainment practice and usually quite legal in their home countries while yet disconcerting by U.S sensibilities.

However, if regulators are going to now become moralistic about sexual harassment and exploitation, it would only follow that they should take exception with this form of customer entertainment. I suspect, though, as the hostess club form of entertainment is usually reserved for very high-end customers, the regulators will try and avoid addressing the topic altogether, and those casino marketing executives using hostess clubs will start burying the activity deeper by getting receipts from the club for “banquets” or very expensive “dinner parties” rather than the actual services provided.

Surprisingly for the gaming companies, their risk of sexual harassment is probably less in the use of hostess clubs than if management requires their marketing staff(s) to take customers to such clubs, as the staff could then claim a form of harassment.

While there is really no way of knowing for certain until the Nevada Gaming Commission finally adopts a policy and gives clear guidance to the NGCB and industry about depth and breadth of the standards to be imposed on casino licensees, the smart operators should be looking ahead and revisiting their stances on certain activities and educating their staffs accordingly.