Mandalay Bay parent company fined after drug, prostitution sting

MGM Resorts International, parent company of the Mandalay Bay hotel and casino in Las Vegas, has agreed to a $500,000 fine after a sting found that an upscale lounge’s employees provided drugs and prostitutes to undercover cops in 2012.

Nevada state regulators on Wednesday released details of the 2012 undercover sting at the House of Blues Foundation Room, a lounge located on the 43rd floor of the Mandalay Bay. The lounge is operated by the House of Blues, a tenant in the hotel.

Over a two-month period beginning in June 2012, Las Vegas police officers went undercover at the lounge. Employees, including hosts, bottle runners and security personnel, provided at least four prostitutes, cocaine and Ecstasy to the undercover cops.

The complaint provides details on the sting as it unfolded over several weeks. On one night in late July, undercover officers were introduced to two prostitutes who agreed to have sex with at least one of the them. They also bought an “8-ball” of cocaine, or one-eighth of an ounce.

Later that same night, the group of undercover officers also asked for marijuana but were told that they would have to wait until the lounge closed for the night.

At that point, the undercover officers asked for a private room to have sex. A security officer escorted them to a private room where they waited 10 minutes to make it appear as though they had sexual relations.

“Mandalay Bay’s failure to prevent such activities from occurring on its premises constitutes conduct which reflects...on the repute of the state of Nevada and acts as a detriment to... the gaming industry,” the complaint said.

In a statement, the company said that it had fired all employees involved in the sting.

“While these activities took place outside our knowledge, we acknowledge our responsibility, as landlords, to monitor all nightclub and ultra-lounge operators at our resorts,” a spokesman said in a statement. “The intolerable activities discovered by investigators are obviously completely contrary to the type of luxury resort our company strives to run.”

The company said it has also increased its compliance and training procedures.

The fine still awaits final approval at the next Gaming Control Board meeting.