Some say gaming law is as much as an art as it is a science. If so, the Nevada law firm of Lionel Sawyer & Collins is the Louvre and Ellen Whittemore, the Mona Lisa. Her clients run the gamut of the huge gaming corporations from MGM Mirage to the Onyx Group of companies (led by former MGM president Alex Yemenidjian), which has taken over the Las Vegas Tropicana.
Prior to joining the firm, she was Nevada’s supervising deputy attorney general for the gaming division. Whittemore is the primary author of three Nevada gaming regulations. She successfully prosecuted individuals who were then included in the “Black Book” exclusion list, and was lead counsel in the case that established that gaming devices could not display “near misses” to slot customers. Whittemore spoke with Global Gaming Business Publisher Roger Gros at her Las Vegas offices in June.
GGB: Through the years, Lionel Sawyer & Collins has become the “go-to” law firm in Nevada. Does that put a little extra pressure on you when you appear before a gaming commission or in court?
Whittemore: I think it does. I think we have very high standards at this law firm, and they were established by our founding partner, Sam Lionel, who, now in his 90s, is still probably one of the best litigators in this state. Of course, Grant Sawyer was the governor who really established the current system of gaming control. Those are big footsteps to follow. And of course you have Bob Faiss, who was just acknowledged dean of gaming law. So we tend to be selective in the matters that we appear on. We understand that our obligation is not just to our clients, but also to the state of Nevada, so it does put a little pressure on you.
As gaming counsel, we have a responsibility to effectively advocate for our clients, but I also think we have a responsibility to dissuade those who might be not be suitable for licensing from even filing that application in the first place.
Right out of law school, you got into the public sector and eventually became deputy attorney general. Do you think that helped you, being on that side of the fence, now that you’re working for clients with the state?
I think it’s absolutely invaluable. I was a supervising deputy attorney general representing the Gaming Control Board and the Nevada Gaming Commission, and that is experience you don’t get coming to a law firm. A lot of gaming law is instinct. A lot of it is understanding that although the statute might on its face say something, that historically there’s been a different interpretation.
The Nevada gaming industry is enduring some difficult times right now. What kinds of challenges does that present to a gaming attorney?
There are any number of our clients that have been putting their financial houses in order. So you’re involved in their discussions with their lenders for restructuring some of the debt they have, to help them face the challenges of these economic times. We also have been approached by and represent a number of lenders who never thought they’d be in a position where they might consider going through the licensing process themselves. So there are challenges as a result of the economy, but there are also a number of opportunities for many people.
Do you have to bring in some people with financial expertise? Traditionally in gaming, that financial expertise was important, but it wasn’t as important as it is these days.
Clearly, my clients have. From my perspective, we make sure that whatever restructuring or whatever investments people make, they are those kinds of restructuring and investments that are going to satisfy the regulatory objectives. But clearly, you see a number of the companies on the Strip retaining exceptional financial advisers.
There’s a proposal out there that will raise the threshold of investment in a public casino company from 15 percent to 25 percent before you’re forced to get a license. Do you think this is going to go through, and if it does, will it change the face of Las Vegas to a certain extent?
This proposal would increase the amount that an institutional investor may own without having to go through licensing. There’s also discussion to open up the categories of types of entities that would qualify as an institutional investor. I think that may open up some additional sources of capital, but one of the primary goals of the gaming regulatory authorities is to ensure that individuals who haven’t been licensed do not exercise excessive control over a Nevada licensee. So although there may be an increase in the percentage that these types of entities can own, they’re still limited in how much they can do without being licensed.
I know you represent MGM Mirage, so I’m not going to ask you any specifics about this, but the New Jersey Division of Gaming Enforcement
recently declared Pansy Ho to be an unsuitable partner for MGM. Does this represent a different kind of regulatory philosophy, or did they discover something that Nevada didn’t know when the gaming board approved Pansy?
I represented MGM as it was approved by the Nevada Gaming Control Board and the Nevada Gaming Commission to have that involvement with Pansy Ho. I’m not aware of any information that was developed by the New Jersey Division of Gaming Enforcement that was not known to the Nevada Gaming Control Board and the Gaming Commission. Frankly, I’m at a loss to explain the differing views of the same factual predicate.
Will MGM Mirage defend the relationship before the New Jersey Casino Control Commission?
I can clearly say that MGM Mirage does not agree with the findings made by the Division of Gaming Enforcement or the recommendations made by that division, and looks forward to having the opportunity to present its position to the Casino Control Commission.