LAS VEGAS (AP) - The company that owns the Palms Casino Resort said it will pay US$1 million (S$1.2 million) in fines after employees of casino nightclubs accepted payments to supply prostitutes, cocaine and pain pills in a series of stings last year.
The Nevada Gaming Control Board detailed the shady dealings in a complaint filed on Friday, and the owner of the Palms, FP Holdings LP, said it would pay the penalty for failing to prevent the illegal transactions.
Among other offences, the complaint said employees of NM Ventures and NM Ventures II, which operates the nightclubs, offered to sell undercover agents ecstasy, the prescription painkiller oxycodone, and US$18,000 worth of cocaine last March.
In one sting, a bottle runner at Rain nightclub agreed to track down prostitutes for a patron. After failing to find the women, the runner reached into a front pocket and produced US$100 of cocaine for the undercover agent.
A Moon nightclub host responded to an undercover agent who asked for "party favours" by offering up "US$100 of blow."
The commission worked with Metro Police on the stings. Police held off on making arrests during the operation, but some are now imminent, according to Lieutenant Dave Logue of the department's criminal intelligence section.
Authorities said they targeted the Palms because they suspected its nightclubs. The last comparable operation took place at the Hard Rock Hotel & Casino three years ago, Lt Logue said.
Casino bosses were "concerned and disappointed" to learn of the activities apparently rampant at their nightclubs, Palms spokesman Alex Acuna said in a statement.
"We are resolved to address these problems comprehensively and decisively," he said.
At the time of the sting, the subsidiaries that ran the nightclubs were only partially owned by the Palms. "They're now fully owned (subsidiaries) so we have a lot more oversight and visibility into the organisation," Mr Acuna told The Associated Press.
He said the Palms is also implementing mandatory drug testing, setting up a whistle-blower system and making changes in its security department to discourage employees from straying outside the law to meet customers' requests.
The casino just west of the Las Vegas Strip is also installing "amnesty boxes" at club entrances, where patrons can dump drugs before entering the casino without fear of legal repercussions.
The US$1-million fine must be approved by the Nevada Gaming Commission. The Palms has also agreed to pay US$78,000 for investigation expenses.