CIRI hit by Nevada gambling rules
The Nevada Gaming Control Board has delayed a vote on CIRI’s request for a waiver from Nevada rules that could exclude some Native shareholders from receiving casino profits.
Under Nevada regulations aimed at weeding Mafia influences out of the state’s gambling industry, anyone who has a criminal record or is incarcerated can be barred from sharing in casino revenue.
Some of CIRI’s nearly 7,000 shareholders fall into that category. Thus they could be excluded from receiving profits, in the form of a dividend, from the Ritz-Carlton casino unless Nevada regulators grant a waiver, according to CIRI and Nevada officials.
The Anchorage-based company and its partners hope to open the casino early next year.
Mark Kroloff, CIRI’s chief operating officer, said the waiver is necessary because all shareholders must be treated equally under the Alaska Native Claims Settlement Act, which created Native corporations in 1971.
Although CIRI has invested in another hotel-casino at Lake Las Vegas, the company has not sought state permission to share in the gaming profits. It acts as a landlord at the Hyatt Regency, and another company runs the casino, Kroloff said.
At the new Mediterranean-style Ritz-Carlton resort, CIRI would co-own the casino and hotel. The casino would be larger and more lucrative than the Hyatt’s, and that’s why CIRI wants a stake.
Kroloff said the snag with Nevada gaming officials largely stems from their lack of familiarity with Native corporations, which are privately held outside the scrutiny of the Securities and Exchange Commission.
"This corporation doesn’t fit within the traditional framework,’’ Dennis Neilander, chairman of Nevada’s gaming control board, told the Anchorage Daily News. "The way our laws are written is to accommodate the normal corporation.’’
Gaming officials and CIRI staff are investigating the relevant laws and searching for possible solutions.
One alternative might be for CIRI board members and officers to undergo criminal background checks and be licensed by the Nevada Gaming Commission, Neilander said.
CIRI has committed to investing $40 million in the construction and ownership of the hotel, according to the company’s annual report. It also plans to invest $24 million in the casino. CIRI’s partners in the development are Transcontinental Properties and investors Sid and Lee Bass.