NRA mulls state’s
‘grandfather’ clause

Mar 1, 2005 5:52 AM

The powerful Nevada Resort Association (NRA) is considering lobbying for legislation that would alter how gaming licenses are "grandfathered," according to sources close to the Gaming Control Board.

Among the issues that the NRA wants addressed is the exemption to the 200-room hotel requirement that some grandfathered licenses enjoy, and the ability to relocate the license into areas not zoned for casinos.

"The NRA is looking at what we can do to clean up some of these legislative issues that impact gaming," said John Farahi, chairman/chief executive of Monarch Casino & Resort in Reno. "It would help to strengthen the industry and stop us from having conflicts."

Farahi is in conflict with a casino that has been proposed across from the Reno-Sparks Convention Center, just a block from the Monarch hotel. The developers have secured the unrestricted gaming license from the defunct Reno Turf Club, a casino that was demolished to make way for downtown redevelopment.

The original Reno Turf Club had no hotel rooms, and the developers are proposing to build a casino up to 20 times larger than the original, but without any guest rooms.

Farahi said he welcomes the competition, but the new casino owners must enter the market on a level playing field. "You don’t go buy a license to avoid building rooms," Farahi said.

Also under scrutiny by the NRA is where a grandfathered license can be used to build a new casino.

In another case — also in Reno — a developer has proposed building a casino in the Spanish Springs community, which is located outside the downtown area.

But the property first must be rezoned to allow for a casino, which would be licensed through the former Old Reno Casino, another casualty of redevelopment.

Some existing casino operators are opposed to a so-called neighborhood casino so far from the downtown tourist district, especially under a grandfathered license.

On this issue, state regulators have said the jurisdiction lies with local governing bodies, such as planning commissions and city councils.

"The state statute provides a mechanism that allows a licensee to attain grandfather rights in the event of a government taking," said Dennis Neilander, chairman of the Gaming Control Board. "But the way the statute reads is that if the license is moved, it is subject to any local approvals. We’ve always considered the ongoing license to be subject to any ongoing local requirements."

Whether these issues — how and where to build a casino under a grandfathered license — warrant changes in state law is uncertain, experts say.

"There are a couple of agendas being discussed," said Stephen Park, an attorney involved in the opposition to the proposed Reno casinos. "One has to do with the existing exemption (the grandfather clause). We would go back and amend that statute."

Peek offered no timetable for the introduction of any new legislation.

But changes to the Nevada Revised Statutes are notoriously difficult to navigate through the legislature, which convened three weeks ago.

For instance, last week a bill was introduced that would establish a statewide lottery designed to help fund education in Nevada.

It was the 23rd time since 1975 that a lottery has been proposed for the state.