A member of the Nevada Gaming Control Board sees the effort by an investment arm of powerful Goldman Sachs Group Inc. as putting the "camel’s nose under the tent" and lessening the regulators’ authority.
But, his two associates — Chairman Dennis Neilander and member Mark Clayton — dismissed the concern as "very minimal" and saw the Wall Street investment as important to the state’s gambling industry.
To member Bobby Siller, a retired FBI agent, permitting Whitehall Fund to place three of its executives on the board of the Las Vegas Hilton following the investment of $60 million in Colony Resorts LVH Acquisitions LLC, challenges the board’s authority.
"What this is about is control," said Siller. He feared that this would open the door to other major private equity investors who would seek to avoid going through the licensing process.
Whitehall Fund is used by Goldman Sachs for investments.
The policy change will be acted upon at the June 22 meeting of the Nevada Gaming Commission.
If the policy change were not approved, investors such as Whitehall or its parent, Goldman Sachs, would be required to go through the licensing process the same as other gaming license seekers.
That "just wouldn’t do," argued powerful gaming attorney Frank Schreck. He said the investors were not concerned they would not qualify for a license but objected "because the process is so cumbersome, so broad." License seekers have been known to wait months while gaming board investigators completed background checks.
Schreck called the suggested policy change a "win-win for the state." He said it would make available to the gaming industry a huge source of financing.
Colony Capital, the privately-owned operator of hotels and casinos throughout the country, purchased the Las Vegas Hilton in 2004 for $280 million. It was at that time that the company received the $60 million investment from Whitehall Fund.
Set to represent Whitehall Fund on the Las Vegas Hilton board of directors are Stuart Rothenberg, Brahm Cramer and Jonathan Langer.